The Supreme Court of India has made a significant prima facie observation that cheque dishonour proceedings under Section 138 of the Negotiable Instruments Act, 1881, cannot be initiated for liabilities arising from illegal or unenforceable debts. This landmark observation, delivered by a bench comprising Justices Aravind Kumar and Joymalya Bagchi, could potentially reshape the landscape of cheque dishonour prosecutions in India. Golden scales of justice on law books with a wooden gavel, symbolizing legal authority and fairness Background of the Case The case of K.K.D. Pandian v. S. Tamilselvi arose from an appeal challenging a Madras High Court (Madurai Bench) order that acquitted the respondent-accused in a cheque dishonour case. The High Court had determined that since the cheque was issued towards repayment of an illegal debt, prosecution under Section 138 of the Negotiable Instruments Act was not maintainable. The complainant challenged t...
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