Security cheque under Section 138: acquittal upheld where enforceable debt was not proved and presumptions were rebutted.

An appeal against acquittal under Section 138 of the Negotiable Instruments Act failed because the cheque was not shown to have been issued towards an existing enforceable debt or liability. The contract did not refer to the cheque, the instrument was treated as security, and the complainant gave inconsistent accounts about how it was obtained. Non-examination of the person said to have delivered the cheque justified an adverse inference, and the cheque was presented before the report relied on to show defective goods, so liability had not crystallised by presentation or dishonour. The trial court's view was a possible one and was not perverse or legally untenable, so interference was refused.

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Issues: Whether the acquittal in a prosecution under Section 138 of the Negotiable Instruments Act required interference on the ground that the cheque was issued towards an enforceable debt or liability and that the statutory presumptions stood unrebutted.

Analysis: The contract between the parties did not refer to the cheque, and the cheque was treated as a security instrument unconnected with any admitted or crystallised liability. The complainant took inconsistent stands regarding the manner in which the cheque came into possession, and the non-examination of the person said to have handed over the cheque justified an adverse inference. The cheque was presented before the report relied upon to establish inferior quality of goods, so the complainant had not shown that any liability had crystallised by the date of presentation or dishonour. In an appeal against acquittal, interference is warranted only when the trial court's view is perverse or legally untenable, and the view taken below was a possible one supported by the record.

Conclusion: The acquittal was not liable to be interfered with, and the cheque was not shown to have been issued against an existing enforceable debt or liability.

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