Section 138 cheque dishonour complaint survives quashing where security-cheque and debt defences raise disputed questions of fact.

A complaint under Section 138 of the Negotiable Instruments Act was not quashed under Section 482 CrPC because the cheque was alleged to have been issued by the accused and was dishonoured for insufficiency of funds, disclosing a prima facie case. The defence that the cheque was only security, that no legally enforceable debt existed, and that the lease arrangement and possession issues defeated liability raised disputed questions of fact requiring evidence. Those contentions could not be conclusively decided in quashing proceedings and had to be tested at trial. The prosecution was therefore permitted to continue.

---

---

Issues: Whether the 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 ground that the cheque was issued as security and the dispute turned on contested questions of fact.

Analysis: The complaint disclosed that the cheque had been issued by the applicant and was dishonoured for insufficiency of funds. The defence that the cheque was meant only as security, that the lease agreement was not produced, that possession had been allegedly taken away earlier, and that no legally enforceable debt existed, all raised disputed questions of fact. Such factual controversies require evidence and cannot be conclusively adjudicated in a petition for quashing. The material on record showed a prima facie monetary transaction and signature on the cheque, and the truth of the defence could be examined by the trial court in accordance with law.

Conclusion: The prayer to quash the complaint was rejected, and the prosecution under Section 138 of the Negotiable Instruments Act, 1881 was permitted to continue.

---