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2017 (4) TMI 70 - HC - Indian LawsOffence under Section 138 of the Negotiable Instruments Act - dishonour of the cheque - Held that:- The dictum laid down by the Supreme Court in Sampelly Satyanarayana Rao (2016 (9) TMI 867 - SUPREME COURT) makes the position of law abundantly clear that the crucial question to determine the applicability of Section 138 of the Negotiable Instruments Act is, whether the cheque represents discharge of existing enforceable debt or liability or whether it represents advance payment without there being any subsisting debt or liability. In the year 2011, when the blank signed cheque was handed over by the accused to the company, indisputably, there was no liability existing on that date. If such is the position, then have no other option but to hold that the cheque in question was nothing but a security without any subsisting debt or liability as on the date of handing over of the cheque. The liability to pay an amount of ₹ 76 lac and odd could be said to have been incurred by the accused over a period of time in the course of the business transactions. In such circumstances referred to above, the proceedings of the Criminal Case pending before the court of the learned Metropolitan Magistrate, Surat, are hereby ordered to be quashed. Rule made absolute.
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