Criminal liability -- Subsisting debt – For a criminal liability to be made out u/s 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheques -- View that issuance of cheques towards advance payment at the time of signing contract has to be considered as subsisting liability and dishonour of such cheques amounts to an offence under Section 138 of the N.I. Act is not acceptable -- If a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier, the cheque cannot be said to have been drawn for an existing debt or liability.
(SC) Decided on: 07.04.2014
