Summon u/s 138

Querist : Anonymous (Querist) 08 April 2010 This query is : Resolved
I had taken a personal loan from Citibank. At the time of taking the personal loan I had given 8 blank cheques as security and the EMI was to be debited to my account every month.

Citibank has recently deposited one of these blank cheques which got dishonoured. Now I have received summons from the Court.

Recently I read in the papers that the Bombay High Court on 19.02.10 in Ramkrishna Urban Coop Society vs Rajendra Verma has ruled that Section 138 is not applicable to such cheques.

Please can some one guide me.

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A V Vishal (Expert) 08 April 2010
The cheques issued by you are not security cheques hence you are liable for prosecution u/s. 138

B K Raghavendra Rao (Expert) 09 April 2010
The cheques issued by you are towards payment but issued in advance. They are not for security. You are liable to be tried for prosecution.

Querist : Anonymous (Querist) 10 April 2010
The said cheques are only deposited on dishonour of ECS Payments, hence it is for the purpose of security.

If it is for payment, issued in advance then why does the bank deposit the same only on dishonour of ECS Payments