PROCEEDINGS UNDER SEC.138 OF NEGOTIABLE INSTRUMENTS ACT MAINTAINABLE ONLY AGAINST ENFORCEABLE DEBT AND NOT SECURITY: GUJARAT HIGH COURT The bench of Justice Gita Gopi of Gujarat High Court stated that the proceedings under Section 138 of the Negotiable Instruments Act, 1881 should be made only in respect of enforceable debt. In the present case the applicant engaged in the manufacture of cast iron, got into business with the respondent. However, due to certain defects in the products supplied by respondent to the applicant-company, the Company had to encounter returns from other industries and thereby suffered loss. As a result, the respondent filed a summary suit against the company for recovery of Rs. 1, 12, 26, 500 for the goods delivered. The Civil Court ruled in favour of the respondent, upon which an appeal was filed in the High Court, which granted interim relief to the appellant but directed them to deposit Rs 43, 46, 061 as security. The Company failed to make a deposit; therefore, the respondent got a warrant of attachment against the company, there upon the Company subsequently granted 11 cheques to the respondent, one of which was to be kept as security. The cheque got bounced and the respondent issued notice to the applicant-company under Section 138 of the NI Act. The bench observed that the respondent should have returned the cheque to the applicant-company instead of depositing, as it was given as a security. The proceedings under NI Act were gross miscarriage of justice and abuse of the process of Court. Accordingly, the application was allowed and the bench set-aside criminal case against the applicant. Reddy and Reddy Law Firm is well experienced in the field of litigation and has successfully represented clients in civil, commercial and criminal litigation proceedings before the relevant Indian courts.