Section 138 cheque disputes: territorial jurisdiction and security-cheque defences cannot be rejected at the quashing stage.

In a section 138 prosecution, specific averments that the cheque was issued and handed over at New Delhi supported territorial jurisdiction, because jurisdiction may arise where any component act of the offence occurs; the Delhi courts' jurisdiction objection was rejected. The plea that the cheque was issued only as security, rather than toward discharge of liability, raised a disputed question of fact requiring evidence and could not be ined at the quashing stage; that plea also did not justify quashing. The petition for quashing was therefore rejected and the complaint was left to proceed to trial.

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Issues: (i) Whether the complaint under section 138 of the Negotiable Instruments Act, 1881 and the summoning order were liable to be quashed for want of territorial jurisdiction of the Delhi courts; (ii) Whether the plea that the cheque was issued only as security, and not towards discharge of liability, justified quashing at the threshold.

Issue (i): Whether the complaint under section 138 of the Negotiable Instruments Act, 1881 and the summoning order were liable to be quashed for want of territorial jurisdiction of the Delhi courts.

Analysis: The complaint contained a specific averment that the cheque was issued and handed over at New Delhi. For an offence under section 138, the relevant acts include drawing of the cheque, presentation, dishonour, notice, and failure to pay, and jurisdiction may lie where any of those component acts occurs. At the quashing stage, the pleaded averments cannot be ignored merely because they are disputed by the accused.

Conclusion: The territorial jurisdiction objection was rejected.

Issue (ii): Whether the plea that the cheque was issued only as security, and not towards discharge of liability, justified quashing at the threshold.

Analysis: The complaint specifically asserted that the cheque was issued towards part payment of liability. The defence that it was only a security cheque raised a disputed question of fact requiring proof during trial, and could not be finally determined in proceedings for quashing.

Conclusion: The security cheque plea did not warrant quashing.

Final Conclusion: The petition for quashing was rejected, leaving the complaint under section 138 to proceed to trial.

Ratio Decidendi: In a prosecution under section 138 of the Negotiable Instruments Act, 1881, specific averments in the complaint as to where the cheque was issued and the nature of liability cannot be discarded at the quashing stage, and disputed factual defences such as a security-cheque plea must ordinarily be tried on evidence.

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