Yes, in certain cases. A cheque issued by a guarantor as security may fall under Section 138 of the NI Act if it was issued in discharge of a legally enforceable debt or liability.

???? Key Points:
• If the cheque is only a security and not for repayment, Section 138 may not apply.
• But if the cheque is presented after default by the principal debtor and used to recover dues, it can be treated as a discharge of liability, making Section 138 applicable.

⚖️ Case Reference:
• Indus Airways v. Magnum Aviation (2014): Held that cheques given only as security do not attract Section 138 unless they are for a legally enforceable debt.

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In short: A guarantor’s cheque can attract Section 138, but only if it’s used for discharging a legally enforceable liability, not merely as security.

If a cheque issued by a guarantor as security bounces due to insufficient funds, it can fall under Section 138 of the Negotiable Instruments (NI) Act because this section covers dishonor of cheques due to lack of funds or may be some other reasons, and the guarantor could be held liable for the offense.

Section 138 of the Negotiable Instruments Act deals with the dishonour of cheques. If a cheque is dishonoured due to reasons like insufficient funds or account closure, the person who issued the cheque (the drawer) can be penalised under this section.

Even if a cheque is given as "security" for a loan or obligation, it can still be presented for payment once the underlying debt becomes due. If the cheque is dishonoured at that time, the drawer can face legal consequences under Section 138.