The complainant and the accused are same in both the cases. Both the cases relate to the transactions of a cheque, therefore, the appeal as well as the revision petition are clubbed and this common judgment is delivered.

Crl. Appeal No. 1581 of 1999

2. Criminal Appeal No. 1581 of 1999 is preferred by the complainant in C.C.No. 1 of 1995 on the file of the V Additional Munsif Magistrate, Guntur. The appellant filed a private complaint against the first respondent (accused) for the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the Act'). The learned Magistrate after considering the evidence adduced by the complainant found the accused guilty of the offence, convicted and sentenced him to undergo rigorous imprisonment for one year for the offence under Section 138 of the Act, through judgment dated 9-1-1997. The accused, being aggrieved by the conviction and the sentence imposed by the learned Magistrate, preferred Criminal Appeal No. 12 of 1997 on the file of the 1 Additional Sessions Judge, Guntur. The learned Sessions Judge, through judgment dated 23-7-1999, set aside the conviction and the sentence imposed by the learned Magistrate for the offence under Section 138 read with 142 of the Act and allowed the appeal. The complainant, being aggrieved by the judgment of the learned Sessions Judge, preferred this appeal challenging its validity and legality.

3. The case of the prosecution leading to the complainant preferring this appeal is briefly as follows.

4. On 5-6-1992 the accused borrowed Rs. 60,000/- from the complainant for purchase of a house site and executed a demand promissory note in his favour agreeing to repay the same with interest at the rate of 24% per annum either to him or his order on demand. The accused failed to repay the amount to the complainant despite repeated demands and also failed to give reply to the legal notice dated 17-5-1994. Subsequently, the accused gave a crossed cheque for Rs.90,000/- on 10-11-1994 in favour of the complainant drawn on Vysya Bank Limited, Arundelpet, Guntur, towards part payment of the debt. The complainant presented the said cheques to Vysya Bank Limited, Arundelpet, Guntur, through his Banker, State Bank of Hyderabad, Kothapet Branch, Guntur, and it was returned with an endorsement 'account closed'. The complainant issued a notice to the 'accused on 24-11-1994 intimating the dishonour of cheques and demanding payment of the amount due to him. The accused having received the notice gave a false reply. The accused without keeping the funds in his account issued EX.P-1 cheque in favour of the complainant and cheated him, therefore, the accused is liable for punishment under Section 138 of the Act.

5. The accused took a defence that he borrowed Rs. 5,000/- only from Southern Finance Company, Guntur in the year 1991. The said company being managed by the complainant obtained his signatures on blank promissory notes, blank papers and two blank cheques as collateral security for payment of the amount of Rs.5,000/- and kept them in the custody of the complainant. The said amount of Rs.5,000/- was paid by the complainant to him after getting the cheque for an amount of Rs.12,000/- encashed from the banker of the complainant and took away the balance amount of Rs.7,000/- to give an impression that the accused drew Rs.12,000/- by way of cheque. The accused repaid the entire amount due to the said Southern Finance Company, Guntur, together with interest, as agreed and demanded for return of the blank promissory notes, one blank paper and two blank cheques. Though the complainant promised to return, failed to do so. The complainant taking advantage of the possession of the blank promissory notes, blank paper and two blank cheques, created EX.P-1 cheque bearing No.0697889 and managed to get an endorsement 'account closed' and tiled a complaint with a view to cause wrongful loss to the accused and to have wrongful gain for himself. The further defence of