Prima facie cheque dishonour case bars mini trial at discharge stage in Section 138 prosecution

In a prosecution under Section 138 of the Negotiable Instruments Act, the High Court found that the complaint disclosed a prima facie case where the cheque was alleged to have been issued against an existing liability, dishonoured for insufficient funds, followed by notice and non-payment. The accused's claim that the cheque had been lost or stolen was treated as a defence requiring proof at trial, particularly because the accused admitted the cheque signature and had not informed the bank or sought stop-payment. At the discharge stage, the Court held that a mini trial was impermissible and upheld the rejection of discharge and the revisional order.

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Issues: Whether the order rejecting discharge and the revisional order upholding it called for interference in a prosecution under Section 138 of the Negotiable Instruments Act, 1881, and whether a prima facie case was made out so as to preclude a mini trial at the discharge stage.

Analysis: The complaint alleged issuance of a cheque towards an existing liability, dishonour for insufficiency of funds, service of notice, and non-payment thereafter. The applicant's defence that the cheque had been lost or stolen was considered but found to be a matter requiring proof at trial, especially since the applicant had admitted his signatures on the cheque and had not informed the bank about the alleged loss or sought stop-payment. At the stage of discharge, the Court held, the materials disclosed a prima facie case and the truth of the defence could not be assessed by conducting a mini trial.

Conclusion: The rejection of the discharge application and the revisional order were upheld, as no infirmity was found and the prosecution under Section 138 was held maintainable at the threshold.

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