Understanding Security Cheque Misuse – What If You’re Falsely Accused?

In many cheque bounce cases, a security cheque is presented as if it was issued for repayment of a loan. However, in reality, the cheque may have been given only as security and not against any existing debt.

Misuse of such cheques is a common issue and forms the basis of defense in almost 80% of cheque bounce cases.

This article explains Scenario-2: Security Cheque Not Given in Lieu of Debt, and how you can defend yourself if someone misuses a security cheque you gave them in trust.

What is a Security Cheque?

A security cheque is a cheque that you give to someone as a backup or for future assurance, not for any immediate payment. It is not meant to be deposited unless certain conditions are met.

But sometimes, the person misuses that cheque and deposits it even when you don’t owe any money.

Your Defense: Cheque Given Only as Security

If you’re facing such a situation, your defense is simple:

“I gave this cheque as security, not because I owed any money. The complainant has misused it.”

Cross-Examination Questions to Ask the Complainant

To prove that the cheque was misused, your lawyer can ask the following questions in court:

1. How many years have you been dealing with the accused (you)?

This helps to understand the background of your relationship.

2. How do you normally settle accounts?

If payments were always done in cash, online, or with proper invoices, this can show that the cheque was not part of regular settlement.

3. Do you usually take security cheques from others?

If yes, it proves they use this method as routine — and not for loans.

4. Do you maintain a proper statement of accounts?

This will help check if there’s any record of you owing money.

5. Can you show the full account statement?

This will reveal if there is any pending amount equal to the cheque.

6. On the date the cheque was deposited, did the accused owe you this amount?

If not, it proves that the cheque was misused and no debt existed.

Additional Questions That Can Be Asked:

• Is it true that Ashok ji (the accused) had taken a loan from you before this incident?

• Do you usually help your friends by giving them loans?

• If yes, do you always take cheques as a condition?

These questions test the truthfulness of the complainant and whether the cheque in question was really meant for repayment or just a security measure.

Legal Insight

• A cheque bounce case under Section 138 of the Negotiable Instruments Act requires that the cheque must be issued for a legally enforceable debt.

• If there is no debt, and the cheque was given just as a security, then Section 138 may not apply.

• The burden is on the complainant to prove that the cheque was issued for actual payment.

Suggestion for Accused (You)

• Clearly explain the purpose of the cheque.

• Say that the cheque was only a security cheque.

• Highlight that no money was owed at the time the cheque was deposited.

• Ask for account statements, agreements, or any written proof.

 Final Thoughts

If you have given someone a cheque just as security and they deposit it unfairly, it is your legal right to defend yourself. Courts look at the intention behind issuing the cheque, and if there’s no debt, the case may not stand.

Always speak the truth and back it up with clear facts. If you’re in such a situation, consult a legal expert to guide you through the process.

Contact Legal Light Consulting – LLC Lawyer
India’s Trusted Legal Partner for Cheque Bounce & NRI Matters
📧 Email: contact@legallightconsulting.com
🌐 Website: www.legallightconsulting.com

Disclaimer: This article is for educational and informational purposes only. It does not constitute legal advice. For professional help, please consult a licensed attorney. Reading this article does not create an attorney-client relationship.