A blank cheque, lacking essential details at the time of delivery, is not a valid cheque under Section 138 of the Negotiable Instruments Act, and using such a cheque to coerce payment constitutes an abuse of the provisions of the Act.

( 1 ) THIS is an appeal filed by the complainant in C. C. No. 286/91 on the file of XI Metropolitan Magistrate, Secunderabad acquitting respondents 1 and 2 of offence under Section 138 of the Negotiable Instruments Act.

( 2 ) THE case of the appellant as disclosed from the complaint filed by him is in brief as follows : The respondents 1 and 2 borrowed a sum of Rs. 1,00,000. 00 from the appellant for purpose of their business, promising to repay the same within a short time. Respondents 1 and 2 became liable in a sum of Rs. 1,18,337/- in respect of the said transaction and issued a cheque drawn on karur Vysya Bank, Rastrapathi Road, Secunderabad for the said amount with an understanding to present the said cheque on 15-1-91.

( 3 ) THE appellant-complainant presented said the cheque on 15-1-91, but it was returned for want of sufficient funds. The appellant then contacted the respondents on telephone and demanded for payment of the amount for which the cheque was issued. Then the respondents promised to arrange for payment in a short time. So, the appellant waited for two months and again presented the cheque for encashment on 19-3-91, but it was again returned for want of sufficient funds. The Appellant then sent a notice Dt. 27-3-91 calling upon the respondents to pay the amount within 15 days and threatening to prefer a complaint in the event of their failure to pay the amount within that time. The said notice was received by the respondents-accused and a reply was sent on 11-4-91 raising some pleas which are extraneous and irrelevant and admitting the liability. Hence, the complaint for offence under section 138 of the Negotiable Instruments Act (hereinafter referred to as the Act ).

( 4 ) DURING trial, the appellant-complainant examined himself as P. W. 1. Both the accused examined themselves as D. Ws 1 and 2 and in addition to that some documents were marked on either side. From the evidence adduced during trial, it is clear that the transaction in respect of which the complaint is filed had taken place under the following circumstances : The first accused is a partnership firm. The second respondent and his son who represents the partnership firm are partners of the firm. The firm was carrying on business in chemicals. Respondents 1 and 2 approached the appellant for a loan and the appellant agreed to advance loan and gave a cheque for Rs. 96,500. 00 drawn by "balaji Mahadev Male" in favour of the respondents. Respondents 1 and 2 executed a pronote for Rs. 1,00,000. 00 in favour of the appellant agreeing to repay the same with interest at 20% per annum. At that lime, the complainant got an account opened in the name of the respondents in Karur Vysya Bank and the cheque for Rs. 96,500. 00 was adjusted towards that account. It was stipulated that, respondents 1 and 2 should pay interest every month to the appellant-complainant. The appellant also took a blank signed cheque from respondents 1 and 2 as security for payment of interest every month. It was understood that if the respondents fail to pay interest as stipulated, the appellant can present the cheque in the Bank for the amount due by that date under the pronote. The respondents paid the interest of Rs. 1,667. 00 every month for about 8 months. Thereafter, they stopped payment. By 15-1-91 a sum of Rs. 18,337. 00 was due from the respondents towards interest. So, the appellant-complainant filled up the blanks in the cheque as if it was issued for a sum of Rs. 1,18,337. 00 being the total amount due under the pronote after giving credit to the payment already made and presented the cheque for encashment. It was returned stating that there was no sufficient funds. Two months later, it was again presented. Again, it was returned with a similar endorsement. Then the appellant gave a notice to respondents demanding payment of the amount within 15 days and threatening to file a complaint in the event of their failure to pay the amount within that time.