#dishonoured cheque

Karnataka High Court ruled that an insurance policy remains valid under Section 64VB of the Insurance Act if the premium was paid in cash, even if a subsequent cheque was dishonoured. The Court relied on United India Insurance v. Lakshmamma and enhanced compensation from ₹86.15 lakh to ₹1.92 crore with 6% interest, reinforcing insurer liability in motor accident claims despite payment discrepancies.

Himachal Pradesh High Court rules that cheques issued as security for a debt fall within the ambit of Section 138 NI Act if dishonoured due to insufficient funds. The court affirmed conviction, emphasizing that the accused failed to rebut the statutory presumption of liability, setting a precedent for similar cases involving security cheques.

Madras High Court holds that a cheque issued as security for a sale agreement, not in discharge of a debt, cannot form the basis of a Section 138 NI Act prosecution.