|Karnataka High Court
Section 138 NI Act | Investment Agreement with Profit-Sharing Terms Creates Legally Enforceable Debt : Karnataka HC
Karnataka High Court rules that an investment agreement with profit-sharing terms constitutes a legally enforceable debt under Section 138 of the Negotiable Instruments Act, making issued cheques liable for dishonour. The judgment clarifies that financial arrangements beyond traditional loans can trigger criminal liability for bounced cheques, impacting investors and entrepreneurs alike.