Cheque-based advances fall outside the money-lending bar, so Section 138 complaints cannot be dismissed on that ground.

Section 3 of the Punjab Registration of Money-lender's Act, 1938 bars recovery actions by an unregistered and unlicensed money-lender, but the Act's definition of loan excludes an advance made on the basis of a negotiable instrument other than a promissory note. Where the advance was made through cheques, the statutory bar did not apply because cheques are negotiable instruments. Complaints under Section 138 of the Negotiable Instruments Act, 1881 therefore could not be dismissed solely on the ground that the lender was unregistered under the money-lending statute.

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Issues: Whether complaints under Section 138 of the Negotiable Instruments Act, 1881 were barred by Section 3 of the Punjab Registration of Money-lender's Act, 1938 when the loan was advanced on the basis of cheques.

Analysis: Section 3 of the Punjab Registration of Money-lender's Act, 1938 bars suits or applications for recovery of loans by an unregistered and unlicensed money-lender. However, the definition of loan under Section 2(8) excludes an advance made on the basis of a negotiable instrument other than a promissory note. Since the advance in these cases was made through cheques, which are negotiable instruments, the statutory bar did not apply. The dismissal of the complaints solely on the ground of the money-lending statute was therefore erroneous.

Conclusion: The bar under the Punjab Registration of Money-lender's Act, 1938 was not attracted, and the complaints under Section 138 of the Negotiable Instruments Act, 1881 could not be dismissed on that ground.

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