IMPORTANT POINT
The complainant must establish a legally enforceable debt and prove the offence under Section 138 of the NI Act beyond reasonable doubt.

JUDGMENT

1. The unsuccessful complainant in Calendar Case No.101 of 2002, on the file of the Court of III Additional Judicial Magistrate of First Class, Kakinada, East Godavari District (for short, 'the learned Magistrate'), filed the present Appeal impugning the judgment, dated 20.06.2007, wherein the learned Magistrate found the respondent/accused not guilty of the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short, 'the NI Act') and accordingly acquitted him under Section 255(1) Cr.P.C.

2. The parties to this Criminal Appeal will hereinafter be referred to as described before the trial Court, for the sake of convenience.

3. The case of the complainant, in brief, according to the averments in the complaint is that accused joined as subscriber in one of the Chits conducted by complainant in Chit Group No.KCS-1C/11 on 11.10.1999 for the chit value of Rs.1,00,000/- payable in 25 monthly installments at the rate of Rs.4,000/- p.m. commencing from 18.07.1999 and terminating by 18.07.2001. It is alleged that accused paid some installments, participated in auction held on 19.12.1999 and became highest bidder. He agreed to forego a sum of Rs.36,500/- and received prize money of Rs.63,500/- from the complainant but he did not pay the installments to the complainant in spite of repeated requests and demands except some installments up to 11.05.2000. It is further alleged that on the demand of complainant officials, accused issued a cheque on 31.08.2001 for Rs.70,000/- drawn on Andhra Bank, Main Branch, Kakinada towards part payment of chit due to the complainant. Complainant presented the said cheque in Andhra Bank, Main Branch, Kakinada on 24.09.2001 for encashment but it was dishonoured with an endorsement 'Exceeds Arrangement'. Complainant got issued legal notice on 05.10.2001 calling upon the accused to make payment due under the cheque. On receipt of notice, the accused approached the complainant company and requested it not to file a case and took away the dishonoured cheque and issued another cheque dated 31.12.2001 for Rs.75,000/- drawn on Andhra Bank, Main Branch, Kakinada towards part payment and assured the complainant people that it will be honoured. Believing the words, complainant people presented the said cheque in Andhra Bank, Kakinada on 03.01.2002 for encashment but it was also dishonoured on 03.01.2002 with an endorsement of 'Exceeds Arrangement'. Again, the complainant issued notice to the accused on 11.01.2002. It was received by the accused on 16.01.2002, but the accused never paid the amount nor sent any reply. Hence, the complaint to prosecute the accused for issuing a cheque without having sufficient funds in his account.

4. The learned Magistrate took the case on file under Section 138 of the NI Act.

5. After following the procedure under Section 207 Cr.P.C and on appearance of the accused, copies of case documents were furnished to him under Section 207 Cr.P.C. The accused was examined under Section 251 Cr.P.C. for which he denied the offence, pleaded not guilty and claimed to be tried.

6. The complainant, to bring home the guilt against the accused, examined the Manager of the complainant Company as PW.1 and got marked Exs.P-1 to P.10.

7. After closure of the evidence of prosecution, accused was examined under Section 313 Cr.P.C. for which he denied the incriminating circumstances appearing against him. He examined himself as DW.1.

8. The learned Magistrate on hearing both sides and after considering the oral and documentary evidence on record, found the accused not guilty of the charge for the offence under Section 138 of the NI Act.

9. Felt aggrieved of the same, the unsuccessful complainant is before this Court as appellant.

10. Now, in deciding this Criminal Appeal, the points that arise for consideration are:

1. Whether the complainant before the learned III Additional Judicial Magistrate of First Class, Kakinada proved that the accused issued Ex.P-1 - cheque towards discharge of a lega