dishoner of cheque
Is Dishonour of Cheque given as security deemed as an offence under Section 138 of the Negotiable Instruments Act?
Where a cheque has been given only as a security and not as repayment of a loan, whether an offence under Section 138 of Negotiable Instruments Act is made out for dishonour of cheque when this cheque is dishonoured?
By  Anonymous  |  28 Sep 2016  |  Upvotes: 0  | 

1 Answer(s)

Ravindra Purohit
Advocate

As per Section 139 of Negotiable Instrument Act, it is presumed that cheque was issued for settlement of debt. However,the burden lies on the accused to prove that such cheque was given only as a security and not for discharge of a debt or other liability.Once the accused is able to prove it, he shall be entitled to acquittal from the offence of dishonour of cheque.

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