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Author Topic: M/S Shreya Agro Services Pvt. Ltd. v. Chandrakumar S.B  (Read 1340 times)

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Offline advgaurav.sharma

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M/S Shreya Agro Services Pvt. Ltd. v. Chandrakumar S.B
« on: July 31, 2013, 03:11:55 AM »
where appellant company was supplying the products on credit to dealers. The respondent –accused is one of the dealers of the appellant. Cheque issued by dealer was dishonoured but it was admitted that company has issued circular instructions to all its dealers to deposit signed blank cheques as a security for credit supply. The object of such insistence is to see that, if there is default on the part of dealer; the company would fill up the cheque showing the amount due as on that day payable by the dealer as a measure for effective recovery of dues, Karnataka High Court held:
 
The very scheme of procedure adopted shows that cheques are not issued in respect of any current existing ascertained liability. The word “for discharge of any debt or other liability” in Section 138 of the Negotiable Instruments Act should be interpreted to mean current and existing liability or past ascertained liabilities. The cheque issued in respect of future liabilities not in existence as on the date of cheque would not attract prosecution u/s 138 of Negotiable Instruments Act.”
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