HC RULING ON BOUNCED CHEQUES RATTLES TRADERS
The Bombay High Court judgement that the drawer of a bounced cheque cannot be prosecuted if the
instrument was issued only as a security has thrown traders into a tizzy. Suppliers who were used to
granting credit for series of transactions against a single cheque are now unsure of how good this security is. Debtors on their part while issuing the cheque are making it in the covering letter that the cheque is being issued as a security and not to meet any debt obligation. According to news reports, the judgement was issued by Justice PR Borkar on a petition filed by Ahmednagar-based Ramkrishna Urban Co- operative Credit Society against a debtor.
instrument was issued only as a security has thrown traders into a tizzy. Suppliers who were used to
granting credit for series of transactions against a single cheque are now unsure of how good this security is. Debtors on their part while issuing the cheque are making it in the covering letter that the cheque is being issued as a security and not to meet any debt obligation. According to news reports, the judgement was issued by Justice PR Borkar on a petition filed by Ahmednagar-based Ramkrishna Urban Co- operative Credit Society against a debtor.
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