How good is the ‘security cheque’ defence in 138/cheque bounce cases ?

Q. I had given the cheque as security, however, the same has been filled-in and presented by my friend/partner. How do I defend this ? 

This is still a grey area as per law. The Supreme Court has in a number of cases ruled that if the cheque is given in anticipation of receipt of goods and the goods are not delivered. The security cheque cannot be presented since it is not given for an existing liability, but a liability that is to arise in future. However, in other cases of deferred payment, or where goods are merely not upto specification, this defence has not been too successful. The Delhi High Court in a recent case has held that, in such cases, the liability is to be seen on the date of presentation of cheque and not the handing over of the cheque. However, even in those cases, there might be valid defences like goods being not upto specification (provided prompt notice is given in this regard), and liability being less than the security cheque amount.

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One thought on “How good is the ‘security cheque’ defence in 138/cheque bounce cases ?

  1. Hello sir We are struck in 498A and other with all dowry act that are false now other party demand us huge amount for return all the charge.Because my son doing job in abroad .My lawyer as well her also trying to take more money for closing the case still the case is not reach in court plz advice me if we closing the case what should be take pracaution at given amount .we are very innocent due to indian act we are in problem .plz help me .I am 64 yr widow lady belong a respective family back ground . thanks Mrs goswami

    On Tue, Apr 4, 2017 at 1:49 AM, Bharat Chugh on the Laws of India wrote:

    > TheJurist posted: “Q. I had given the cheque as security, however, the > same has been filled-in and presented by my friend/partner. How do I defend > this ? This is still a grey area as per law. The Supreme Court has in a > number of cases ruled that if the cheque is given in ” >

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