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2012 (5) TMI 508 - HC - Indian LawsNegotiable Instruments Act – Blank Cheque - dishonor of cheque - co-extensive liability of the guarantor and the principle debtor - petitioner contended that guarantor cannot be prosecuted under section 138 of the Act without taking any action against the principal borrower. Blank cheques had been handed over by the petitioner to the respondent No. 1 towards security which have been misused - Held that:- Petitioner has not denied his signatures on the cheques. Once he has admitted his signatures on the cheque he cannot escape his liability on the ground that the same has not been filled in by him. When a blank cheque is signed and handed over, it means that the person signing it has given implied authority to the holder of the cheque, to fill up the blank which he has left. A person issuing a blank cheque is supposed to understand the consequences of doing so. He cannot escape his liability only on the ground that blank cheques had been issued. - petition is dismissed Bare perusal of the provision clearly shows that the section commences with the words "Where any cheque". The use of word "any" assumes significance here. It shows that for whatever reason if a cheque is drawn on an account maintained by the drawer with its bank, in favour of any person for the discharge of "any debt" or other liability, the ingredients of offence under section 138 of the Act gets attracted in case cheque is returned dishonoured for insufficiency of funds and the cheque amount is not paid within the statutory period despite service of notice.
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