Security cheque liability under Section 138: enforceable debt and partner responsibility can sustain prosecution.

A cheque issued against an ascertained liability does not escape Section 138 of the Negotiable Instruments Act merely because it is described as a security cheque. On the pleaded facts, the complaint and promissory note showed a loan transaction with interest, so the debt was treated as legally enforceable and the Section 138 complaint was not liable to be quashed under Section 482 CrPC. The objection that one partner had not signed the cheque also failed because the complaint specifically averred that the applicants were partners responsible for the firm's business, bringing them within Section 141 of the Act.

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Issues: Whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 was liable to be quashed under Section 482 of the Code of Criminal Procedure, 1973 on the grounds that the cheque was issued as security, the debt was not legally enforceable, and one accused partner had not signed the cheque.

Analysis: The allegations in the complaint and the accompanying promissory note showed that the complainant had advanced a loan of Rs. 34,50,000/- with interest and that the amount was not given for any fixed period. On the pleaded facts, the cheque could not be treated as one issued towards a debt that was not legally enforceable. The plea that the cheques were given merely as security was rejected in view of the transaction pleaded between the parties and the settled principle that dishonour of a cheque issued in respect of an ascertained liability can attract Section 138 of the Negotiable Instruments Act, 1881. The objection based on the non-signing of the third applicant also failed because the complaint contained specific averments that the applicants were partners of the firm and Section 141 of the Negotiable Instruments Act, 1881 permits prosecution of persons responsible for the conduct of the business of the firm.

Conclusion: The complaint was not liable to be quashed, and the application under Section 482 of the Code of Criminal Procedure, 1973 was rejected.

Ratio Decidendi: A cheque issued in relation to an ascertained liability does not escape Section 138 of the Negotiable Instruments Act, 1881 merely because it is described as a security cheque, and partners who are shown to be responsible for the firm's business can be proceeded against under Section 141 of that Act even if they did not sign the cheque.

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