Offence u/s 138 of NI Act -- Cheques undoubtedly represent the outstanding liability -- Dishonour of cheque issued for discharge of later liability is clearly covered by the statute in question.

(SC) Decided on: 19.09.2016

Offence u/s 138 of NI Act -- Crucial question to determine applicability of Section 138 of the Act is whether the cheque represents discharge of existing enforceable debt or liability or whether it represents advance payment without there being subsisting debt or liability.

(SC) Decided on: 19.09.2016

Offence u/s 138 of NI Act – Quashing of Complaint -- Reference to the complaint shows that as per the case of the complainant, the cheques which were subject matter of the said complaint were towards the partial repayment of the dues under the loan agreement – While dealing with a quashing petition, the Court has ordinarily to proceed on the basis of averments in the complaint -- Defence of the accused cannot be considered at this stage -- Court considering the prayer for quashing does not adjudicate upon a disputed question of fact.

(SC) Decided on: 19.09.2016

Though the word “security” is used in the agreement, the said expression refers to the cheques being towards repayment of installments -- Repayment becomes due under the agreement, the moment the loan is advanced and the installment falls due -- Disbursement of loan was prior to the date of the cheques -- Once the loan was disbursed and installments have fallen due on the date of the cheque as per the agreement, dishonour of such cheques would fall under Section 138 of the Act.

(SC) Decided on: 19.09.2016

Cheque bounce case -- Whether a post-dated cheque is for “discharge of debt or liability” depends on the nature of the transaction -- If on the date of the cheque liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise.

(SC) Decided on: 19.09.2016