Musaraf Hossain Khan vs Bhagheeratha Engg. Ltd. & Ors

The Supreme Court held that the dishonor of cheques issued under a contract for supply of goods constitutes an offence under Section 138 of the Negotiable Instruments Act, 1881. The Court emphasized that the issuance of post-dated cheques creates a liability, and the failure to honor them leads to penal consequences. The Court dismissed the respondents' writ petition challenging the complaint, affirming that the Chief Judicial Magistrate had properly taken cognizance of the offence, and directed the continuation of proceedings against the respondents.