https://www.taxtmi.com/caselaws?id=304877 A cheque taken only as security before any legally enforceable debt arises does not, by itself, attract criminal liability under Section 138 of the Negotiable Instruments Act when contemporaneous documents rebut the statutory presumptions under Sections 118 and 139. On the facts noted, letters and a bond executed with the advance showed the cheques were received as security, not in discharge of an existing liability, so dishonour was not actionable under Section 138. The discussion also states that directors are not liable merely because of their office or family association; prosecution requires proof that they were in charge of and responsible for the company's day-to-day business. The acquittal was affirmed. en-us Fri, 23 Dec 2005 00:00:00 +0530 Wed, 02 Nov 2022 14:49:14 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=304877 A cheque taken only as security before any legally enforceable debt arises does not, by itself, attract criminal liability under Section 138 of the Negotiable Instruments Act when contemporaneous documents rebut the statutory presumptions under Sections 118 and 139. On the facts noted, letters and a bond executed with the advance showed the cheques were received as security, not in discharge of an existing liability, so dishonour was not actionable under Section 138. The discussion also states that directors are not liable merely because of their office or family association; prosecution requires proof that they were in charge of and responsible for the company's day-to-day business. The acquittal was affirmed. Case-Laws Indian Laws Fri, 23 Dec 2005 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=304877