Section 138 cheque presumption upheld as quashing failed on disputed facts and acknowledged liability under the lease arrangement.

A challenge to a summoning order and criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 was not fit for quashing under Section 482 CrPC because the dispute raised contested facts and mixed questions of fact and law. The cheque was stated to represent a deferred instalment of the security deposit under the lease deed, and the liability was acknowledged at the inception of the contractual arrangement; on the admitted terms, it was not shown to be for unliquidated damages or a mere advance payment. The statutory presumption under Section 139 applied once issuance of the cheque was shown, and the petitioners failed to rebut it. The prosecution was allowed to proceed.

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Issues: Whether the summoning order and criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 deserved to be quashed in exercise of inherent powers under Section 482 of the Code of Criminal Procedure, 1973 on the plea that the cheque did not represent a legally enforceable debt or liability.

Analysis: The challenge turned on disputed facts and mixed questions of fact and law, which were not suitable for determination in proceedings under Section 482 of the Code of Criminal Procedure, 1973. The cheque was issued towards the deferred instalment of the security deposit under the lease deed, and the liability in that regard was acknowledged at the inception of the contractual arrangement. On the admitted terms, the cheque was not for unliquidated damages or a mere advance payment. The statutory presumption under Section 139 of the Negotiable Instruments Act, 1881 applied once issuance of the cheque was shown, and the burden lay on the petitioners to rebut it. The materials relied on by the petitioners did not justify interference at the threshold.

Conclusion: The petitioners failed to make out a case for quashing, and the criminal prosecution was allowed to proceed.

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