Security cheque defence cannot quash a Section 138 complaint when disputed settlement issues require evidence at trial.

Where cheque issuance is admitted, the statutory presumption under Section 139 of the Negotiable Instruments Act supports the complaint, and allegations that the cheque was only a security instrument or that the liability was fully settled raise disputed questions of fact. Such disputes require evidence and cannot be resolved in the exercise of inherent jurisdiction under Section 482 of the Code of Criminal Procedure. The High Court therefore declined to quash the Section 138 prosecution at the threshold and allowed the complaint to proceed to trial.

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Issues: Whether the criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 could be quashed under Section 482 of the Code of Criminal Procedure, 1973 on the basis of the defence that the cheque was issued only as security and that the liability had already been fully settled.

Analysis: The cheque issuance was admitted, and the complaint was supported by the statutory presumption under Section 139 of the Negotiable Instruments Act, 1881. The defence of full and final settlement through a third party, and the contention that the cheque was a security cheque, raised disputed questions of fact. Such disputed factual issues require evidence and cannot be adjudicated in exercise of inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973. On the materials placed, no ground was made out for quashing the prosecution at the threshold.

Conclusion: The petition for quashing was rejected and the complaint was allowed to proceed to trial.

Final Conclusion: Interference at the pre-trial stage was declined because the controversy turned on factual disputes that must be resolved by evidence before the trial court.

Ratio Decidendi: Where issuance of the cheque is admitted and the defence raises disputed factual questions such as security cheque or alleged settlement, the complaint under Section 138 of the Negotiable Instruments Act, 1881 should not be quashed under Section 482 of the Code of Criminal Procedure, 1973 at the threshold.

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