Cheque liability under the Negotiable Instruments Act must be tested at trial when disputed facts and prima facie materials exist.

In a Section 482 CrPC challenge to a Section 138 NI Act prosecution, the HC held that the question whether the cheque was issued in discharge of a legally enforceable debt depended on prima facie materials and disputed facts arising from the sale transaction. The complaint alleged that the cheque represented part payment of the balance sale consideration, so the issue could not be conclusively decided at the cognizance stage. The Court treated the liability question as one for evidence at trial and held that quashing was not warranted on that ground, leaving the accused to raise all factual objections before the trial court.

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Issues: Whether the criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881 should be quashed under Section 482 of the Code of Criminal Procedure, 1973 on the ground that the cheque was not issued in discharge of a legally enforceable debt and that the question was not maintainable at the stage of cognizance.

Analysis: The complaint disclosed that the accused had given an assurance in connection with the sale transaction and had issued the cheque towards part payment of the balance sale consideration. The existence of liability and the purpose for which the cheque was issued were found to involve prima facie materials and issues of fact. Whether the cheque was issued in discharge of debt was held to be a matter for evidence to be decided at trial, and not a ground for quashing in proceedings under Section 482 of the Code of Criminal Procedure, 1973.

Conclusion: The petition for quashing was not maintainable on the facts and the criminal complaint was allowed to proceed; the petitioner's objections were left to be raised before the trial court.

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