Security cheque defence rejected where admitted dishonour, proved notice, and evidence established repayment liability under cheque dishonour law.
Conviction under Section 138 of the Negotiable Instruments Act was sustained where the evidence showed that the complainant had advanced money, the accused acknowledged receipt in the defence agreement, and the cheques were admitted, timely presented, and dishonoured for insufficiency of funds. The statutory notice was proved and the defence raised no effective rebuttal to the claim that the cheques were issued towards repayment of a legally enforceable liability. The plea that the cheques were only security cheques was rejected because it did not displace the documentary and oral evidence. The concurrent findings of the courts below were found free from illegality or infirmity, so no interference in revision was warranted.
Issues: Whether the conviction under Section 138 of the Negotiable Instruments Act was liable to be set aside on the plea that the cheques were issued only as security under the agreement and not towards discharge of a legally enforceable liability.
Analysis: The evidence established that the complainant had advanced money to the accused and that the accused had acknowledged receipt of the amount in the agreement relied upon by the defence itself. The cheques were admitted to have been issued by the accused, were presented in time, and were dishonoured for insufficiency of funds. The statutory notice was proved and there was no effective rebuttal to the complainant's version. The defence that the cheques were only security did not displace the documentary and oral evidence showing that they were issued towards repayment of the amount received. The concurrent findings of the courts below were found to be based on proper appreciation of evidence, and no illegality or infirmity was shown warranting interference in revision.
Conclusion: The conviction under Section 138 of the Negotiable Instruments Act was upheld and the defence of security cheque was rejected.
TaxTMI 
AI Drafter ✕
TaxTMI 
