Dilemma Of A Security Cheque

Ritesh Yadav, B.Com. LL.B (Hons.), Institute of Law, Nirma University

ABSTRACT

Cheques are not an alien concept to the Indian republic and law, however one sub part of it – the security cheque has had quite a complex legal relation. Whenever parties enter into a transaction involving long term implications, most of the time the parties opt for something as a security. Reason being for example there are 2 parties – Party A and Party B, now Party A takes loan from Party B, and Party A issues a security cheque to B, so that if he defaults on his payment, Party B can present this cheque to the bank to get the defaulted amount. This cheque is known as a security cheque, now the main point of contention which this article tries to answer is whether or not dishonor of a security cheque amounts to an offence, Since there have been many contradictory as well as supporting judgements for the same, making this topic quite a legal rollercoaster.