I.C.D.S LTD. versus BEENA SHABEER AND ANR.

I.C.D.S LTD. versus BEENA SHABEER AND ANR.

A complaint under Section 138 of the Negotiable Instruments Act is maintainable against a guarantor who issues a cheque towards discharge of any debt or liability, including as part payment, and the statute's language supports this broad application; the High Court erred in quashing the complaint.

Parties
Appellant: I.C.D.S. LTD.; Respondent: Beena Shabeer; Principal Debtor: Beena Shabeer's husband
Jurisdiction
India
Judgment Date
12 August 2002
Procedural Posture
Civil Appeal / Appeal Against Order of the Kerala High Court Quashing Criminal Complaint Under Section 138 of Negotiable Instruments Act
Outcome
Appeal allowed; High Court judgment quashed; complaint under Section 138 restored.
Legal Topics
Negotiable Instruments, Cheques as Security, Guarantor Liability, Dishonour of Cheque
Criminal Law Commercial Law Negotiable Instruments Cheques as Security Guarantor Liability Dishonour of Cheque

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Parties

I.C.D.S. LTD.

Appellant

Beena Shabeer

Respondent

Beena Shabeer's husband

Principal Debtor

Procedural Posture

Civil Appeal / Appeal Against Order of the Kerala High Court Quashing Criminal Complaint Under Section 138 of Negotiable Instruments Act

Legal Issues

  1. 1 Maintainability of complaint under Section 138 of the Negotiable Instruments Act against a guarantor when cheque is issued as security
  2. 2 Scope of Section 138 regarding cheques issued for discharge of debt or other liability

Ratio Decidendi

A complaint under Section 138 of the Negotiable Instruments Act is maintainable against a guarantor who issues a cheque towards discharge of any debt or liability, including as part payment, and the statute's language supports this broad application; the High Court erred in quashing the complaint.

Court Disposition

Appeal allowed; High Court judgment quashed; complaint under Section 138 restored.

Orders

  • The order of the learned Single Judge stands quashed.
  • Proceeding in ST No.141/1999 on the file of the Additional Chief Judicial Magistrate's Court, Thiruvananthapuram restored.