Cheque issued pursuant to settlement agreement presumed to be for discharge of debt: Supreme Court

The Court set aside a judgment of the Madras High Court which had quashed a Section 138 criminal complaint on the ground that the cheques could not be deemed to be issued for discharge of a debt or liability.
Cheque Bouncing
Cheque Bouncing

The Supreme Court has held that a cheque issued pursuant to a deed of settlement between parties will be presumed to have been issued towards discharge of a debt or liability under Section 138 of the Negotiable Instruments Act (NI Act), which fastens criminal liability in cheque bounce cases (M/s Gimpex Private Limited v. Manoj Goel).

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