Cheque dishonour liability established through statutory presumption; money-lending licence absence did not bar prosecution.

A cheque dishonour prosecution succeeds where the cheque, supporting document and complainant's evidence establish that it was issued towards an existing legally enforceable debt, and the statutory presumption under Section 139 of the Negotiable Instruments Act, 1881 is not rebutted by a credible defence. A plea that the complainant lacked a money-lending licence under the Bengal Money-Lenders Act, 1940 does not, by itself, bar criminal proceedings where liability is otherwise proved; the Act's licensing restrictions were treated as regulatory rather than a complete defence to Section 138 liability. The acquittal was set aside, and conviction, sentence and compensation followed.

---

---

Issues: (i) Whether the cheque was issued in discharge of an existing legally enforceable liability and attracted Section 138 of the Negotiable Instruments Act, 1881; (ii) whether the absence of a money-lending licence barred the complaint under the Bengal Money-Lenders Act, 1940.

Issue (i): Whether the cheque was issued in discharge of an existing legally enforceable liability and attracted Section 138 of the Negotiable Instruments Act, 1881.

Analysis: The cheque, the supporting written document and the complainant's evidence were treated as sufficient to show that the cheque was not a mere security instrument but was issued towards an existing liability. The accused's explanation under Section 313 of the Code of Criminal Procedure, 1973 was found inconsistent and not credible. The statutory presumption under Section 139 of the Negotiable Instruments Act, 1881 was applied, and the record was held to establish the foundational facts required for liability under Section 138.

Conclusion: The cheque was held to have been issued in discharge of a legally enforceable debt, and the ingredients of Section 138 were satisfied.

Issue (ii): Whether the absence of a money-lending licence barred the complaint under the Bengal Money-Lenders Act, 1940.

Analysis: Sections 8 and 13 of the Bengal Money-Lenders Act, 1940 were construed as regulatory provisions. The absence of production of a licence was held not to create a complete bar to enforcement in the present criminal proceeding. The Court held that the statutory restriction governing civil recovery by a money-lender could not defeat prosecution on a cheque dishonour case where the liability was otherwise established.

Conclusion: The complaint was not barred by the Bengal Money-Lenders Act, 1940, and the defence based on absence of licence failed.

Final Conclusion: The acquittal was set aside, the accused was convicted for cheque dishonour, and compensation and sentence were imposed.

Ratio Decidendi: A cheque dishonour prosecution under Section 138 of the Negotiable Instruments Act, 1881 succeeds where the cheque is proved to have been issued towards a legally enforceable debt, and a regulatory money-lending statute does not by itself bar such prosecution merely because the complainant could not produce a licence.

---