https://www.taxtmi.com/caselaws?id=279422 A cheque issued as advance payment under a supply contract can represent a legally enforceable liability for purposes of Section 138 of the Negotiable Instruments Act, because the purchaser becomes bound to make the contractual payment even before goods are supplied. Once the seller acts on the cheques and procures or manufactures the goods, the liability is fastened and the cheque is treated as issued against that liability. Issues such as ultimate proof of liability or the effect of stop-payment instructions are matters for trial and do not warrant interference at the summoning stage. en-us Fri, 27 Aug 2010 00:00:00 +0530 Sat, 16 Mar 2019 15:20:01 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=279422 A cheque issued as advance payment under a supply contract can represent a legally enforceable liability for purposes of Section 138 of the Negotiable Instruments Act, because the purchaser becomes bound to make the contractual payment even before goods are supplied. Once the seller acts on the cheques and procures or manufactures the goods, the liability is fastened and the cheque is treated as issued against that liability. Issues such as ultimate proof of liability or the effect of stop-payment instructions are matters for trial and do not warrant interference at the summoning stage. Case-Laws Indian Laws Fri, 27 Aug 2010 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=279422