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NI ACT -KRISHNA JANARDHAN BHAT


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s.138 would not be attracted especially in view of the judgement of the Hon'ble Supreme court in the case of Krishna Janardan Bhat which give primacy as to the purpose for which the cheque was drawn or received. To attract 138 cheque should have been drawn or received for discharge of debt or obligation. In case of Security cheque at the time of drawing or receipt of the cheque there was no debt which was liable for "discharge". Operating word is "discharge". Discharge means satisfy. Since at the time of drawing or receiving "security cheque" debt was not liable or due for discharge, it cannot be said the cheque was drawn or received in discharge. Of course the security cheque was drawn with reference to or in relation to a debt of liability but it cannot be said to be drawn in "discharge" and if that is correct s.138 would not be attracted at all. I hold this view with conviction despite number of supreme court and the high judgement to the contrary with regard to "security cheque #doc

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  on 12 November 2009
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