Security cheque under Section 138 requires proof of existing liability; acquittal stands where no such debt is shown.

A cheque issued only as security does not attract Section 138 of the Negotiable Instruments Act, 1881 unless an existing debt or liability is proved. On the facts stated, the complaint itself treated the cheque as security against alleged shortage of rice, but the evidence did not establish any shortage or subsisting liability when the cheque was issued. The record supported the view that the stock position remained intact. As the trial court's appreciation of evidence was not shown to be perverse or illegal, and two views were possible, the acquittal was left undisturbed and leave to appeal was declined.

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Issues: Whether leave to appeal against acquittal should be granted in a complaint under Section 138 of the Negotiable Instruments Act, 1881 where the cheque was issued as security and no existing debt or liability was proved.

Analysis: The complaint itself described the cheque as having been issued by way of security against shortage of rice. The evidence did not establish any shortage in stock or any subsisting liability on the date of issuance of the cheque. On the contrary, the material on record supported the finding that the stock position remained intact. A cheque issued only as security does not attract Section 138 of the Negotiable Instruments Act, 1881 unless it is shown to have been issued in discharge of an existing debt or liability. The trial court had appreciated the evidence properly and the order of acquittal could not be disturbed in the absence of patent illegality or perversity. Where two views are possible, the view favouring acquittal must prevail.

Conclusion: Leave to appeal was rightly declined and the acquittal was upheld.

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