U. Durga Prasad Rao, J.

1. Aggrieved by the judgment dated 24.04.2009 in C.C. No. 343 of 2004 passed by the learned XIV Additional Chief Metropolitan Magistrate, Hyderabad acquitting the accused for the offence under Section 138 of Negotiable Instruments Act, 1881 (for short "N.I Act"), the complainant preferred the instant Criminal Appeal.

2. On factual side, the case of Complainant Company is that it is engaged in manufacture and sale of bulk drugs, finished formulations etc., in India and abroad. Whereas A.1 is the public limited company carrying business in purchase and sale of active pharmaceutical ingredients (products), A.2 is its Managing Director. A.1 Company was appointed as Commercial Del credere agent of complainant for one year from 01.04.2003 for sale of complainant's products to customers in Northern India. The further case of complainant is that it supplied products from time to time on credit against the invoices and A.1 was due a sum of Rs. 69,03,380/-. A.1 issued 14 cheques all dated 06.01.2004 towards part discharge of the debt. A.2 signed on the cheques on behalf of A.1 drawn on Standard Chartered Bank, Hyderabad. The complainant deposited the cheques for collection through their bankers Standard Chartered Bank, Raj Bhavan Road, Hyderabad. However, all the cheques were returned dishonoured with endorsement "payment stopped by drawer". Hence, the complainant issued a registered legal notice dated 17/21.01.2004 to A.1 demanding payment of the amounts covered by the cheques. For which, A.1 issued reply notice dated 02.02.2004 with false allegations. Hence, the complainant filed the private complaint in C.C. No. 343 of 2004 in respect of two cheques bearing Nos. 792483 and 792484 dated 06.01.2004 for Rs. 7,68,834/- and Rs. 78,980/- respectively, out of 14 cheques.

3. The judgment shows that during trial, P.Ws. 1 and 2 were examined and Exs. P.1 to P.17 were marked on behalf of complainant. D.W. 1 was examined and Exs. D.1 to D.23 were marked on behalf of accused.

4. The defence plea is that as per agreement dated 01.04.2003 entered into by both parties, the complainant was obligated to supply drugs to accused as per the orders placed from time to time and in order to secure the interest of complainant, the accused given several undated but signed cheques which were to be presented for encashment on instructions from the accused. In fact as per such instructions dated 28.11.2003, the complainant deposited three cheques worth Rs. 8,32,920/- on 29.11.2003 and got them encashed. While so, unfortunately disputes arose between parties leading to termination of agreement dated 01.04.2003 as per the letter of the complainant dated 12.12.2003. In the said letter, the complainant also made a claim for Rs. 1,65,95,873/-. Rebutting the said claim, the accused in his reply letter dated 22.12.2003 requested complainant to send a statement of account for ascertaining the actual amount due if any and for settlement of the claim. However, no such statement of account was forwarded by the complainant and in the absence of reconciled outstanding amount, the accused was not willing to pay any further amount. Most importantly, the further contention of the accused was that in his reply letter dated 22.12.2003, the accused advised complainant not to deposit any further cheques which were duly signed and lying with the complainant till the dispute was resolved but the complainant presented those cheques for encashment contrary to the instructions issued by the accused. He contended that there was no failure on his part to arrange funds but he was ready to discharge liabilities, provided accounts were reconciled as demanded in his letter dated 22.12.2003. The further plea of the accused is that the complainant was guilty of presenting the cheques lying in trust with him contrary to the instructions given by the accused.

5. The judgment would show that the trial Court accepted the defence plea on the following observations:

"i)There