Jawad Rahim J.

This appeal is by the complainant against the judgment in Cri. A. No. 724 of 2002, dated 7-11-2003 setting aside the conviction of the respondent-accused recorded by the Trial Court in CC No. 35132 of 2000, dated 22-11-2002.

2. Heard.

3. The case papers reveal that the appellant-Siddappa initiated prosecution against the respondent-K. Nanjappa for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short, ‘the Act’) on the basis that there was financial transaction between the parties. The respondent had requested financial assistance and borrowed a sum of Rs. 80,000/- assuring to repay promptly. However, he defaulted. When the complainant raised demand to repay the amount, the respondent issued cheque on 12-6-2000 for a sum of Rs. 80,000/- assuring encashment. The cheque on presentation was dishonoured vide endorsement dated 16-6-2000 insisting issuance of statutory notice which was also not complied.

4. The learned jurisdictional Magistrate taking cognizance for the offence under Section 138 of the N.I. Act has secured the presence of the respondent-accused and put him on trial, during which the appellant herein examined himself as P.W. 1 and relied on 10 documents. The accused on his part examined himself and three witnesses and relied on three documents.

5. The main defence of the accused is that he was contributing for two chits of Rs. 1,30,000/- each, run by the complainant through his agent one Manjula. He was paying regularly the monthly subscription and became successful in bidding the chit. He became entitled to prize amount of the chit, but when he demanded the money, the appellant obtained from him blank cheque. The cheque is now been misused to claim Rs. 80,000/-. To support his contention he examined three witnesses describing them as the co-members in the chit transaction.

6. The Trial Judge found the evidence so led by the accused was not sufficient but the evidence led by the complainant established ingredients constituting offence punishable under Section 138 of the N.I. Act. Thus, the respondent was convicted with a direction to pay Rs. 82,000/- as the fine amount. Against which he was in appeal before the Sessions Judge and the Appellant Court set aside the order passed by the Trial Court and acquitted the accused. Against it, the complainant is in this appeal.

7. Learned Counsel for the appellant would contend that the learned Trial Judge taking into consideration all aspects relating to the money transaction and also the fact that accused at no time disputed issuance of cheque to the complainant and also about its dishonour, such evidence is placed on record but the Appellate Judge has without considering the effect of such incriminating evidence, erroneously acquitted the respondent.

8. He would draw my attention to exchange of notice between the parties and the reply sent by the accused. He refers to the averments made in the notice to make out a clear case that the respondent at no time disputed that he had financial transaction with the appellant and that in such financial transaction, he has issued the cheque impugned in this case.

9. Per contra, the learned Counsel for the respondent would contend that accused has only admitted of having chit transaction with the complainant and winning the prize chit. He submits that in order to claim the prize amount of the chit, when the accused approached the complainant, the complainant demanded him to sign some documents as also to issue a cheque. He has done the same with other members, who had also lodged police complaint against him. He submits that modus operandi of the complainant was to obtain a negotiable instrument from the members of the chit and then to institute false cases for recovery of the amount. He submits that the appellant is guilty of collecting the money as chit subscription and then enforcing the cheque obtained as security. He submits that criminal cases have been registered and com