#security cheque

The court held that a guarantor's security cheque is not automatically exempt from Section 138 prosecution merely because it was given as collateral; the existence of an enforceable debt must be tested at trial. This clarifies that guarantors cannot escape cheque bounce proceedings at the threshold without a full evidentiary inquiry into the underlying liability.

Bombay HC grants interim protection under Section 9, directing deposit of Rs.2,14,99,523 with 18% interest and asset disclosure within seven days. Court relies on repeated MOU admissions of liability and dishonoured security cheques, preserving prima facie case for secured creditor.

Allahabad High Court rules that interim compensation under Section 143A of the Negotiable Instruments Act is payable even if the cheque was issued as security, reinforcing the statutory framework over procedural objections. The judgment underscores trial courts' discretion to award compensation regardless of the cheque's underlying purpose, impacting debt recovery and commercial litigation strategies.

The Himachal Pradesh High Court affirms that a cheque issued as security for a debt attracts criminal liability under Section 138 of the Negotiable Instruments Act upon dishonour, provided the statutory presumption of liability under Section 139 is not rebutted by credible evidence. This ruling reinforces that the burden of proof lies squarely on the accused to demonstrate the absence of a legally enforceable debt, impacting lenders and borrowers alike in commercial and personal credit arrangements.

The Himachal Pradesh High Court has ruled that a cheque issued as security for a loan is not immune from prosecution under Section 138 of the Negotiable Instruments Act, provided the underlying debt remains unpaid and statutory notice is properly served. This removes legal ambiguity for banks and lenders relying on security cheques, reinforcing that intent to defraud is not required - only the dishonour of a legally enforceable liability.

Himachal Pradesh High Court rules that a cheque issued as security for a financial obligation triggers Section 138 NI Act liability upon dishonour, unless the accused rebuts the statutory presumption of a lawful debt with credible evidence. Failure to lead evidence renders the defence unsustainable, reinforcing strict compliance with negotiable instrument obligations.

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.

MP High Court rules that a cheque issued as security for a third party's liability, without a legally enforceable debt against the accused, does not constitute an offence under Section 138 of the Negotiable Instruments Act. The judgment clarifies that mere issuance of a security cheque, absent compliance with statutory conditions, cannot sustain criminal proceedings.

Delhi High Court holds that mere assertion of cheques as security is insufficient; statutory presumption under Section 139 NI Act stands rebutted only by cogent, documented evidence.

Punjab and Haryana High Court holds that security cheques issued for commercial liability can trigger Section 138 NI Act prosecution; presumption of debt applies if signature is admitted.