TMI Blog2012 (5) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-2010 to which he has pleaded not guilty and claimed trial. Trial is in progress. At this stage, petitioner has filed the present petition. 4. It was alleged in the complaint that respondent No. 1 had extended credit facility to Mr. Sanjay S/o Sukhbir in order to enable him to purchase one Eicher vehicle bearing No. HR-55-B-4273. Loan agreement was executed between the parties. Petitioner stood as guarantor for due compliance of terms and conditions as contained under the agreement. Petitioner issued two cheques in favour of respondent No. 1 bearing No. 205370 and 205369 both dated 7-8-2007 for Rs. 6 lakhs and Rs. 4 lakhs respectively, both drawn on UTI Bank Limited, Khan Market Branch, New Delhi. On presentation the cheques were retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embargo in the matter of application of the provisions of section 138 of the Act. At this stage, relevant it would be to refer to section 138 of the Act, which reads as under :-- "Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "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. The legislature has been careful enough to record not only discharge in whole or in part of "any debt" but the same includes "other liability" as well. Supreme Court in ICDS Ltd. v. Beena Shabeer [2002] 39 SCL 305 has held that the words "any cheque" and "other liability" occurring in section 138 are the two key expressions which stand as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of the statute. These expressions leave no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The issue as regards the co-extensive liability of the guarantor and the principle debtor, in our view, is totally out of the purview of section 138 of the Act, neither the same calls for any discussion therein. The language of the Statute depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embargo in the matter of application of the provisions of section 138 of the Act: 'Any cheque' and 'other liability' are the two key expressions which stands as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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