JUDGMENT :

The issue involved in this appeal is in a very narrow compass.

A complaint filed by the present appellant under Section 138 of the Negotiable Instruments Act stands dismissed by the learned Judicial Magistrate, 1st Class, Court No.3, Mandi, H.P., vide judgment 26.04.2010, passed in Criminal Complaint No.18-III/2006, titled as Gurbachan Singh Versus Kamli Devi, on the ground that as the cheque subject matter of the complaint stood issued as a ‘security cheque’, therefore, said cheque i.e. the security cheque did not attract the provisions of Section 138 of the Negotiable Instruments Act.

2. Brief facts, necessary for the adjudication of the present appeal are as under :-

As per the appellant/complainant, the respondent/accused took a loan of Rs.55,000/- from him and in lieu of the same, she handed over a cheque for an amount of Rs.55,000/-, drawn upon Punjab National Bank, Pandoh, Tehsil Sadar, Distti.Mandi, H.P., in his favour on 28.12.2005. The amount of Rs.55,000/- was borrowed in the 3rd week of October, 2005. It is further the case of the complainant that when said cheque was handed over for its collection to the bank concerned, the same was dishonoured on the ground of insufficiency of funds. Thereafter, a statutory notice was issued to the respondent/accused for payment of the said amount, but as the accused did not heed to the said notice, complaint stood filed under Section 138 of the Negotiable Instruments Act. This complaint has been dismissed by the learned Trial Court vide judgment dated 26.04.2010, primarily on the ground that as the cheque was issued by way of security, therefore, such like cheques do not attract the provisions of Section 138 of the Negotiable Instruments Act.

3. Mr. G.R. Palsra, learned counsel for the appellant has argued that the judgment passed by the learned Trial Court is not sustainable in the eyes of law as it has been clearly laid down by Hon’ble Supreme Court of India that even dishonouring of such cheques which are issued by way of security, do attract the provisions of Section 138 of the Negotiable Instruments Act. He has placed reliance on the judgment of Hon’ble Supreme Court in (2016) 3 Supreme Court Cases 1, titled as Don Ayengia Versus State of Assam and Another, in which Hon’ble Supreme Court has been pleased to hold in Para12 thereof as under:

“12. The difficulty arises only because the promissory note uses the words “security” qua the cheques. This would ordinarily and in the context in which the cheques were given imply that once the amount of rupees ten lakhs was paid, the cheques shall have to be returned. There would be no reason for their retention by the complainant or for their presentation. In case, however, the amount was not paid within the period stipulated, the cheques were liable to be presented for otherwise there was no logic or reason for their having been issued and handed over in the first instance. If nonpayment of the agreed debt/liability within the time specified also did not entitle the holder to present the cheques for payment, the issuance and delivery of any such cheques would be meaningless and futile, if not absurd.”

4. Accordingly, learned counsel for the appellant has submitted that as the judgment passed by learned Trial Court below is in-conflict with the law of land as has been laid down by Hon’ble Supreme Court of India, therefore, the present appeal be allowed.

5. Defending the order passed by the learned Court below, Ms. Monika, learned Legal Aid Counsel appearing for the respondent has argued that as the cheque was issued just as a security and otherwise also as the borrowed amount stood paid back by the accused to the complainant, the filing of the complaint was nothing, but an act of harassment on the part of the complainant and the complaint accordingly stands rightly rejected by the learned Trial Court below. She has argued that the onus to demonstrate that the cheque was issued in lieu of some loan etc. taken from the complainant by