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2020 (1) TMI 412 - SC - Indian LawsDishonor of Cheque - section 138 of NI Act - cheque was issued in discharge of any debt or liability of the company or not - HELD THAT:- In the instant case, the respondent clearly had a liability. As observed above, there was an earlier adjudication which led to the conviction of the respondent accused. Thus there was adjudication of liability of the respondent accused. While the appeal was pending, the matter was settled in the Lok Adalat in acknowledgment of liability of the accused respondent to the appellant complainant - The cheque issued pursuant to the order of the Lok Adalat, was also dishonoured. This clearly gave rise to afresh cause of action under Section 138 of the Negotiable Instruments Act. Every award of the Lok Adalat is, as held in K.N. Govindan Kutty Menon's case [2011 (11) TMI 783 - SUPREME COURT], deemed to be decree of a civil court and executable as a legally enforceable debt. The dishonour of the cheque gave rise to a cause of action under Section 138 of the Negotiable Instruments Act. The impugned judgment and order is misconceived. Appeal allowed - decided in favor of appellant.
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