...that the learned Judge of the High Court had in fact committed an error in arriving at the conclusion that the cheque issued by the respondent No. 2 was towards ‘security’ and that the same could not...passed by the High Court calls for interference.7. To contend that the cheque issued towards discharge of the loan and presented for recovery of the same cannot be construed as issued for ‘security’ has...the order of the High Court that a cheque issued towards security cannot attract the provision of Section 138 of N.I. Act is erroneous and the reference made by the High Court to the decision...

...statutory notice issued under Section 138 is not valid. It is an omnibus notice since it did not recognise the part-payment that was made.7.3. The cheque was a security..., 2021 SCC OnLine SC 1002, this Court observed that if a cheque is issued as security and if the debt is not repaid in any other form before the due date or if there is no...understanding or agreement between the parties to defer the repayment, the cheque would mature for presentation : (SCC paras 21-22)“21. A cheque issued as security pursuant to a...

...: (2005 All LJ 1810) Allahabad High Court that:“Plea taken that cheque was only issued as security — Held, while exercising power under Section 482 Cr.... P.C only on basis of pleadings of parties, it cannot be held that blank cheque was given as security-Whether cheque was issued under guarantee or with understanding with parites that as soon...that the applicants have given any consent to opposite party no. 2. The said cheque was in possession of opposite party no. 2 for collateral security. The said transaction had not only attracted the...

...liability.”3. It is on the basis of the provision as above, the High Court came to a conclusion that when a cheque was issued as security, no complaint...provisions laid down in Section 138 of the Negotiable Instruments Act is crystal clear that when a cheque has been issued as a security, no complaint will lie under Section 138 of the...will lie under Section 138 of the Act since the cheque issued cannot be said to be for the purpose of discharging any debt or liability. In justification of the said conclusion the High Court...

...in response to the legal notice. It was stated that the cheque that was issued was only for the purpose of Security and not for encashment.9. On 2 November 2017, a...the repayment and the loan is not repaid, the cheque which is issued as security would mature for presentation. The Court observed:“17. A cheque issued as security pursuant...the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee...

...dishonoured on presentation. Statutory notice is issued and private complaint is filed.2. It is the defence contention that the cheque is issued only as a security and not for...and issuance of cheque as a security for repayment of debt is illusory in law. Any cheque whether issued towards repayment of debt or liability as a security if dishonoured, the drawer of a cheque...cheque, even if it is issued as security for repayment it is very much a negotiable instrument and with implied instruction for deferred presentation on future date, if the debt is unpaid as per the...

...count that the respondent had issued the cheque in favour of the complainant which was merely by way of amount towards security which was meant to be encashed only if milk was not supplied. Explaining...been issued by him only by way of security. As a counterblast, the complainant presented the cheque for encashment merely to settle scores with the respondent/milk supplier.4...also assailed the finding of the High Court which recorded that the cheque was issued by way of security of some transaction of milk which took place between the respondent-accused and the father of...

...cheque in this case was not issued in discharge of any liability but was handed over only as a security and therefore, the...under cl. 5. It is not the case that any fresh cheque was issued towards security as mentioned in clause 5. Therefore, the fact remains that only one cheque was issued on 27.12.1995 as security for...contain any reference to the period of agreement. From the admitted case of the parties, it is clear that the cheque that was issued by the petitioner was as security for the advance received. According...

..., that cheque was issued without consideration, the cheque was issued as security, the cheque though issued by the petitioner was not from his own account but from some other account, the petitioner was...ground that petitioner had various defences like - the petitioner was not the Director of the company at the time when cheque was issued or when cheque was dishonoured; the petitioner was not...objectives of the proceedings of section 138 of n.i act is that cheques should not be used by persons as a tool of dishonesty and once a cheque is issued by a person, it must be honoured and if it is not...

...the kury amount was collected by the revision petitioner. Even though the revision petitioner had a contention that the cheque in question was issued as a blank signed cheque as security at the time of...alleged to have been issued towards outstanding dues in business dealing, if the account books are not produced by the complainant, the contention of the accused that the cheque was issued as security...discharge of existing enforceable debt or liability or not. Therefore, if the transaction is a business transaction and the accused takes a contention that the cheque was issued as a security or the...

...agreement dated 25.12.2015 will itself prove that the said cheque was issued as a security, that the story created by the respondent alleging cause of action stating that the cheque was issued on...issued as security can also attract the offence under Section 138 of NI Act and that there cannot be hard and fast rule that a cheque which is issued as security can never be presented by the drawee of...the cheque and the relevant passages are extracted hereunder: "16. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless...

...brevity). The petitioner had raised a defence that the cheque in question had been issued as security for due performance of the contract and was not issued in discharge of a debt or a legal liability...true that a cheque offered as security is not issued in discharge of a debt or a legal liability, the view of this court has been that in the event that the cheque becomes enforceable on the default...of the accused issuing such cheque in the performance of a contract, it would make no difference that the cheque is issued as a security or in discharge of a debt or a legal liability. However, in the...

...since cheque in question was issued by way of security, therefore, the court below should not have directed applicant to deposit 20% of the cheque amount by way of interim compensation. It is further...admitted issuance of cheque. The only defence of applicant is that the cheque was issued not in discharge of any legal liability but it was issued by way of security. 5.... Now, the moot question for consideration is as to whether cheque issued by way of security would be covered under Section 138 of the Negotiable Instruments Act or not? 6...

...in the facts of that case simply because in that case also loan was advanced. It was noticed specifically therein, as was the admitted case of the parties, that the cheque was issued as “security” for...689 The question for consideration is whether in the facts of the present case, the dishonour of a post-dated cheque given for repayment of loan instalment which is also described as “security” in...issued, no debt or liability was due. Thus, dishonour of post-dated cheques given by way of security did not fall under Section 138 of the Act. Reliance was placed on Clause 3.1(iii) of the...

...cheque given by him to Respondent 2 by way of security. The second cheque was issued in February 1992 and the same had been given for the purpose of discounting.4. The...it is held that existence of debt in respect of large part of the said amount has not been proved. The appellant clearly said that nothing is due and the cheque was issued by way of security. The said...cash and issued another cheque being dated 17-8-1992 drawn on Ernakulam Broadway Branch of Vijaya Bank for a sum of Rs 2,95,033. The said cheque being Exhibit P-3 was presented for encashment on 18-8...

...purpose of cross- examination. The record summoned, is record pertaining to the earlier business transactions which only show that the cheque issued was security cheque but.... According to petitioner the cheque in question, was given as a security cheque. However, for the purpose of laying out foundation of summoning the record, the petitioner is...

...counsel for the petitioner restricted the challenge only to one point. According to him, cheque was not issued in discharge of any debt or liability and as the cheque was issued as security deposit...be invoked. It is now well settled legal position that if the cheque is issued only as security for performance of certain contract or an agreement and not towards the discharge of any debt or other...amount has not been proved. The appellants clearly said that nothing is due and the cheque was issued by way of security. The said defence has been accepted as probable. If the defence is acceptable...

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...of the drawer's bank that there is a material alteration. Further, as contended by the accused, the finding of the trial Court is that cheque was issued towards security. Might be that the cheque was...issued towards security, but the cheque can be utilised for encashment is case of breach of contract or default on behalf of the accused.6. In the circumstances, appeal is allowed...by the complainant that the said alterations were made by the accused. It has also opined that the cheque must have been given towards security by the accused. Apart from that, as regards return of...

...learned counsel for the applicant is that the cheque in question was issued as security cheque and not in discharge of any liability. Therefore, the impugned proceeding is bad in the eyes of law...opposite party No.2 by the applicant in discharge of his liability for certain amount of money, therefore, it cannot be said that the cheque in question was issued as security cheque. However, the.... 4. Considering the submission of learned counsel for the parties and on perusal of record, it appears that there is specific case in the complaint that the cheque in question was handed over to...