Sequirity cheque

Security cheque myth has been porpogated in legal media but it has not legal value since the relted judgments are presented in distored manner.

If there is no legal liability than only secuirty cheque pleas is acceptable.

A security cheque is issued to the drawee as security or suriety, for using in case the drawer fails to meet the future obligations arising during the course of the business transactions.Hence no offence is committed for dishonour of the security cheque u/s 138 NI ACT.

U can get citations at indiakanoon.org

Sucurity cheques are enforceable if it is givesn on account of liabity see the folloowing law pont.

S.138-Dishonour of cheque –Security cheque- It can fasten liability on the drawer – Security cheque can be legally and validly utilized towards the discharging of the liability of the drawer – A security cheque is an acknowledgment of liability on the part of the drawer that the cheque holder may use the security cheque as an alternate mode of discharging his/ its liability. Cr.CC 2013(2) P& H 829.

S.138-Dishonour of cheque – cheque issued as security towards loan advance – Held, when cheque is issued as security then not only the aspect as to the cheque given as and by way of security is to be seen but what is also to be seen is whether it has been issued in discharge of debt or liability – Accused failed to show that there was no enforceable debt or liability – Accused failed to give reply to the notice – Trial court misdirected itself in considering the evidence on record – Order of acquittal set aside – Accused convicted for offence u/s 138 of the Act and sentenced to imprisonment till rising of the court- Accused directed to pay double the amount of dishonored cheque. Cr.CC 2013(2) Bombay 288.