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High court should not go into factual aspect of dispute

A high court cannot go into the factual aspects of a dispute over stop-payment of cheques and they should be tested during the trial, the Supreme Court stated in the judgment, HMT Watches Ltd vs M A Abida. The latter was a re-distribution stockist of the firm and she issued 57 cheques which bounced. The company filed complaints under the Negotiable Instruments Act. She argued that the cheques were given as security and therefore there was no liability, the main ingredient in Section 138 of the Act. Moreover, the cheques were stopped not because of insufficiency of fund. The Kerala High Court accepted her arguments and quashed the complaints. The firm appealed to the Supreme Court which stated that the high court had exceeded its jurisdiction by analysing disputed facts. It asked the trial court to proceed with the criminal complaint.

 Article referred: http://www.business-standard.com/article/opinion/caution-on-injunctions-against-banks-115032900673_1.html

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