Cheque marked as guarantee can still trigger section 138 liability when facts show repayment of a loan debt.

A cheque described as a "guarantee" or security instrument may still attract criminal liability under section 138 of the Negotiable Instruments Act, 1881 where the surrounding facts show that it was issued for repayment of a loan or other legally enforceable debt. The complaint must be read as a whole, and a stray expression does not defeat the existence of liability if the transaction evidences an advance of money with an assurance of repayment by cheque. The statutory presumption under section 139 applies unless rebutted, and a court must not misread the complaint or ignore that presumption.

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Issues: Whether the cheque was issued in discharge of a legally enforceable debt or liability so as to attract section 138 of the Negotiable Instruments Act, 1881.

Analysis: The accused relied on the use of the word "guarantee" in the prior complaint to contend that the cheque was only a security instrument and not issued towards repayment of a debt. The Court held that the complaint, read as a whole, clearly showed that money had been advanced as a loan on the assurance of repayment through the cheque, and the mere use of the word "guarantee" did not negate the existence of a legally enforceable liability. The Court also held that the trial court had misread the complaint and failed to apply the statutory presumption under section 139 of the Negotiable Instruments Act, 1881.

Conclusion: The cheque was issued for the due discharge of a legally enforceable debt or liability, and the acquittal could not be sustained. The accused was liable to be convicted under section 138 of the Negotiable Instruments Act, 1881.

Ratio Decidendi: A cheque described as a guarantee or security does not cease to be one issued in discharge of a legally enforceable debt or liability where the surrounding facts show that it was obtained for repayment of a loan, and the presumption under section 139 operates unless rebutted.

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