Cheque dishonour complaint cannot be dismissed only for alleged unlicensed money lending; merits must be examined

A complaint under Section 138 of the Negotiable Instruments Act could not be rejected solely on the preliminary ground that the complainant was allegedly a money lender without licence, because the trial Magistrate had not examined whether the statutory ingredients of the offence were otherwise made out. The merits of the cheque dishonour complaint required consideration, so the dismissal was set aside and the matter remanded to the Magistrate for a fresh decision after hearing both parties.

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Issues: Whether dismissal of a complaint under Section 138 of the Negotiable Instruments Act, 1881 on the ground that the complainant was a money lender without licence was sustainable, and whether the matter should be decided on merits.

Analysis: The dismissal was founded mainly on the view that the complainant was engaged in money lending without registration under the Punjab Registration of Money-Lender's Act, 1938. The Court held that the trial Magistrate had not examined whether the ingredients of Section 138 of the Negotiable Instruments Act, 1881 were otherwise established. Since the complaint had been rejected on a preliminary ground without a merits-based determination, that approach could not be sustained at this stage.

Conclusion: The dismissal was set aside and the matter was remanded to the Magistrate for fresh decision on merits after hearing the parties.

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