TMI Blog2017 (10) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... duction of Sections 138 and 141 of the Negotiable Instruments Act. Cheques were issued by the petitioner as a security - It is of the view that as the cheques were issued as a security, there is no legal bar in presenting the cheques for launching the prosecution after complying with the requisite procedures in the event of dishonour. What would be required is as to whether the cheques were presented for the outstanding liability or not. The very purpose for which the cheques issued, whether dated or undated, is only for the purpose of presenting them whenever there is a default on the part of the borrower. While that being so, it cannot be said that the cheques given by way of security are only an empty exercise and that the lender has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pathy and another vs. Mac Industries Ltd.), stating that the cheques, which have been issued and obtained as security, utilised by the complainant at the time when the dispute aroses, cannot attract Section 138 of Negotiable Instruments Act. 3. Controverting the arguments putforth, the learned counsel for the respondent submitted that both the judgments relied upon by the learned counsel for the petitioners cannot be countenanced, in view of various other judgments of this Court as well as the Supreme Court. Saying so, the learned counsel relied upon the judgment reported in MANU/SC/0201/1999 (M/s.Bilakchand Gyanchand Co. vs. A.Chinnaswami) and submitted that the proceedings initiated by the complainant against the Director of the Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnaswami, this Court held that a complaint under section 138 of Act was not liable to be quashed on the ground that the notice as contemplated by Section 138 of the Act was addressed to the Director of the Company as its office address not to the company itself. The view was reiterated in Rajneesh Aggarwal v. Amit J.Bhalla. These decisions indicate that too technical an approach on the sufficiency of notice and the contents of the complaint is not warranted in the context of the purpose sought to be achieved by the introduction of Sections 138 and 141 of the Act 6. From the decision referred to above, it is clear that notice issued in the name of Managing Director, who has not only signed in the cheque in the capacity of Director but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated cheques towards repayment of installments of principal of loan amount in accordance with agreed repayment schedule and installments of interest payable thereon. ...... ...... 10. We have given due consideration to the submission advanced on behalf of the Appellant as well as the observations of this Court in Indus Airways (supra) (Indus Airways Private Limited Vs. Magnum Aviation Private Limited-MANU/SC/0288/2014 = 2014 (12) SCC 539) ), with reference to the explanation to Section 138 of Act and the expression for discharge of any debt or other liability occurring in Section 138 of the Act. We are of the view that the question whether a post-dated cheque is for discharge of debt or liability depends on the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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