Supreme Court has set aside quashing order in respect of cheque bouncing case and observed that handing over of the cheques by way of security per se would not extricate the accused from the discharge of liability arising from such cheques.
A bench of Justice Khanwilkar and Justice Maheshwari has passed the order in the case titled as M/S WOMB LABORATORIES PVT LTD vs VIJAY AHUJA on 11.09.2019.
The High Court had quashed the case. It had mainly referred to the assertion in the complaint that the security cheques were demanded in response to which the accused had issued three signed blank cheques and stated if the amount is not returned within two years then by presenting the cheques the same may be encashed. This assertion was assumed by the High Court to mean that the cheques were given only by way of security. Having said that, the High Court proceeded to hold that the “security” offered was not for the discharge of any debt or any liability.
When the matter reached the Supreme Court, it observed "In our opinion, the High Court has muddled the entire issue. The averment in the complaint does indicate that the signed cheques were handed over by the accused to the complainant. The cheques were given by way of security, is a matter of defence. Further, it was not for the discharge of any debt or any liability is also a matter of defence. The relevant facts to countenance the defence will have to be proved - that such security could not be treated as debt or other liability of the accused. That would be a triable issue. We say so because, handing over of the cheques by way of security per se would not extricate the accused from the discharge of liability arising from such cheques".
Supreme Court then held "Suffice it to observe, the impugned judgment of the High Court cannot stand the test of judicial scrutiny. The same is, therefore, set aside".
Read the Order here:
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