1. The appellant has challenged the Judgment and Order acquitting the respondent for the charge under Section 138 of the Negotiable Instruments Act [hereinafter referred to as “the Act” for short] on a trial held by the XX Addl. Chief Metropolitan Magistrate, Bangalore.

2. The facts relevant for the purpose of this appeal are as under:

The appellant is the complainant before the trial Court, whereas the respondents are accused Nos.1 and 2 respectively. The appellant is a company incorporated under the Companies Act, 1956. Likewise, the 1st Company and the 2nd respondent is also a respondent is its Managing Director and was at all material times in-charge and responsible for conducting the business of the said Company. The appellant is engaged in the business of finance of real estate and development and it entered into a Memorandum of Understanding dated 29.08.1995, wherein it was to invest a sum of Rs.6.40 crores in the project of the 1st respondent called as “Green Ville” in Hosur-Sarjapur Road, Bangalore, under the aforesaid Agreement. It had option either to buy house sites, plots or villas or to obtain refund of the amount paid with interest at 27% p.a. if paid before 07.01.1997 and interest at 36% p.a. for payments subsequent to the aforesaid date. A sum of Rs.6.40 crores is said to have been paid to the respondent in 2 instalments i.e., Rs.3.52 crores at the first instance and Rs.2.88 crores later.

The project “Green Ville” was delayed and the 1st respondent is said to have assured to refund the amount received with interest, aggregating to Rs.9.20 crores. The 1st respondent is said to have acknowledged its liability to the extent aforesaid. There was a correspondence and acknowledgement of liability between both the companies in this regard. The 1st respondent company having confirmed its outstanding dues of Rs.9,20,59,032-00 as on 01.03.1997 and having acknowledged its liability subsequently as well, did not refund the aforesaid amount and ultimately towards part payment of the dues, 4 cheques dated 23.09.1999 for Rs.1.25 crores each for total sum of Rs.5 crores were given. The said cheques were drawn on Canara Bank, Bangalore and were issued by the 2nd respondent in his personal capacity on behalf of the 1st respondent. When the said cheques were presented for encashment on 15.03.2002 to the banker, they returned dishonoured on account of “payment stopped”, by accused No.2. An intimation of the dishonour was communicated.

On 18.03.2000, the appellant issued a statutory legal notice under Section 138 of the Act to the 2nd respondent and a notice was also issued to the 1st respondent intimating the dishonour. The 2nd respondent having received the notice said to have given a false, frivolous and untenable reply dated 31.03.2000. The 1st respondent did not reply the notice at all. Later, the respondents are said to have issued a false and untenable letter purporting to be dated 14.03.2000, said to have been posted on 16.03.2000 intimating the appellant about instructions given by them to the bankers to stop the payments on the cheques. As the respondents did not pay the amount under the cheques despite the demand having been made, the appellant was constrained to file a complaint before the trial Court to punish the respondents for the offence punishable under Section 138 of the Act. On these grounds, the appellant filed a complaint in the trial Court, which took cognizance and issued the process.

The respondent/accused having appeared before the trial Court did not plead guilty for the charge under Section 138 of the Act. Therefore, the appellant Company examined P.W.1 and in the evidence, got marked the documents Exs.P1 to 17. After recording the statements of the respondents/accused under Section 313 Cr.P.C., no defence evidence was led. Anyhow, the respondents got marked the documents Exs.D1 to 9 in the cross-examination of P.W.1.

The trial Court after hearing the learned counsel for the parties and on ap