Security cheque disputes and outstanding liability questions are matters for trial, not quashing of a cheque dishonour complaint.

Where issuance of the cheque, the underlying borrowal, dishonour, and statutory notice were admitted, disputes over whether the cheque was given as a security cheque, whether it was later filled for a higher amount, and whether the outstanding liability was lower were treated as questions of fact for trial. The Court held that such disputed issues, including the effect of SARFAESI proceedings and NPA-related interest calculations, did not justify quashing the prosecution under Section 138 of the Negotiable Instruments Act at the Section 482 CrPC stage. The complaint was therefore allowed to proceed.

---

---

Issues: Whether a prosecution under Section 138 of the Negotiable Instruments Act, 1881 could be quashed on the grounds that the cheque was issued as a security cheque, was filled up later for an allegedly higher amount, and that SARFAESI proceedings and NPA classification affected the enforceability of the liability.

Analysis: The borrowal, issuance of the cheque, dishonour, and statutory notice were not in dispute. The defence that the cheque was handed over undated as security and that only a lesser sum remained payable raised disputed questions of fact. The Court noted that the complainant's notice and the petitioner's subsequent letter acknowledging liability supported the existence of a live claim, while the RBI circular on interest application after NPA classification did not bar the bank from maintaining the account or recording interest in the manner indicated in the circular. The Court held that whether the cheque amount exceeded the actual liability, and whether the cheque was issued only as security, were matters for trial and not for determination in proceedings under Section 482 of the Code of Criminal Procedure, 1973. The pendency of SARFAESI proceedings and the existence of secured assets did not furnish a ground to quash the prosecution.

Conclusion: The prosecution under Section 138 of the Negotiable Instruments Act, 1881 was not liable to be quashed, and the petition was rejected.

Ratio Decidendi: Where issuance of the cheque and the underlying transaction are admitted, disputes regarding security cheque character, quantum of outstanding liability, and interest calculations ordinarily present questions of fact for trial and do not justify quashing a complaint under Section 138 of the Negotiable Instruments Act, 1881.

---