Security cheque disputes under the Negotiable Instruments Act cannot usually be resolved in quashing proceedings when facts are contested.

A cheque issued as security can still attract liability under the Negotiable Instruments Act if the underlying debt remains unpaid on the due date. Allegations that the cheque was blank, misused, or that the liability had already been discharged raised disputed questions of fact requiring evidence, so they could not be decided in inherent jurisdiction under Section 482 CrPC. The complaint and summoning proceedings were therefore not quashed, and the petitioner was left to pursue those defences before the trial court.

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Issues: Whether the complaint and summoning proceedings under the Negotiable Instruments Act could be quashed in exercise of inherent jurisdiction on the pleas that the cheque was issued as security, was blank, and the underlying liability had already been discharged.

Analysis: The petition invoked the narrow scope of inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973. The Court held that the defence raised by the petitioner, including the assertion that the cheque was only a security cheque, that the amount stood repaid, and that the cheque had been misused, involved disputed questions of fact requiring evidence. It relied on the settled position that a cheque issued as security in a financial transaction may still mature for presentation and attract Section 138 of the Negotiable Instruments Act, 1881 if the debt remains unpaid on the due date. The Court also noted that issues such as closure of account, payment having been made, and alleged misuse of the cheque are matters to be established before the trial court, not in quashing proceedings.

Conclusion: The complaint and the summoning proceedings were not liable to be quashed and the petitioner's defence was left to be pursued before the trial court.

Ratio Decidendi: A cheque issued as security can attract Section 138 of the Negotiable Instruments Act, 1881 if the underlying liability remains unpaid, and disputed defences of repayment or misuse ordinarily cannot be adjudicated in proceedings under Section 482 of the Code of Criminal Procedure, 1973.

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