The burden of proof lies with the complainant to establish the outstanding debt for a successful claim under Section 138 of the N.I. Act.

JUDGMENT :

1. This is complainant’s appeal against the judgment and order passed by the trial Court acquitting the accused/respondent of an offence punishable under Section 138 of N.I. Act, 1881 (‘N.I. Act’ for short).

2. Heard the learned counsel appearing for the appellant/complainant and the learned counsel appearing for the respondent/accused.

3. The case of the complainant is that he is running dalali mandi business at APMC Yard, Davanagere dealing as commission agency for agricultural produce brought by the agriculturist to his shop. The accused is an agriculturist having agricultural land at Chikkabidari Village. For the maintenance of his agricultural land, the accused used to borrow money from the complainant for purchase of seeds, manure, pesticides and also for purchase of tractor, reimbursement of tractor loan, agricultural implements, for improvement of his land etc. There was a balance of Rs.5,25,000/which was due from the accused as per ledger balance dated 24.05.2006. When the complainant demanded for payment of the outstanding debt, which was not cleared by the accused inspite of stipulated period, and on demand, the accused started dragging the matter and finally towards payment of the said debt, the accused issued a cheque bearing No.0222 dated 24.05.2006, for a sum of Rs.5,25,000/, drawn on Jilla Valmiki Girijana Pattina Sahakara Sangha Ltd., Davanagere through account No.125 and requested the complainant to present the cheque for encashment. Accordingly, when the said cheque was presented for encashment by the complainant through his collecting banker, Bapuji Cooperative Bank Ltd., HMR Branch, Davanagere on 24.05.2006, the said cheque was returned with an endorsement “Insufficient Fund”. A legal notice dated 05.06.2006 was issued to the accused under certificate of posting and also by registered post with acknowledgment due. However, the accused failed to reply to the notice and failed to pay the amount mentioned in the cheque within the stipulated time. Hence, the accused committed an offence punishable under Section 138 read with Section 142 of the Act.

4. Before the trial Court, the complainant got examined himself as PW.1 and got marked Exs.P1 to P6. The accused got examined as DW.1 and got marked Exs.D1 to D7.

5. The trial Court after considering the oral and documentary evidence, acquitted the accused. Aggrieved by which, the present appeal is preferred.

6. The learned counsel appearing for the appellant has vehemently contended that the issuance of cheque and the signature on it has not been disputed by the accused. As such, the trial Court ought to have drawn a legal presumption in favour of the complainant. The accused has failed to rebut the presumption by adducing any cogent evidence. The appellant has proved the existence of debt, issuance of cheque, dishonouring of cheque in question for insufficient amount. The accused has also failed to reply to the legal notice and failed to honor the cheque by making the payment mentioned therein within the stipulated time. Hence, all the ingredients of Section 138 of N.I. Act has been fulfilled and inspite of that the trial Court on an erroneous consideration acquitted the accused. The learned counsel contends that the reasons assigned by the trial Court are not in accordance with law. Accordingly, he seeks to allow the appeal.

7. Per contra, the learned counsel appearing for the respondent contends that the accused has not disputed the issuance of cheque and also the signature on Ex.P1. However there was no outstanding dues of Rs.5,25,000/as alleged by the complainant. Though the accused was borrowing about Rs.30,000/from the complainant once in every six months for the purpose of purchasing pesticides, seeds and manure etc., for agricultural operations, the accused was clearing the said loan by selling the paddy crops. In the year 1992 due to flood in the Thungabhadra river, the crop cultivated by the accused was destroyed. Hence, he could not clear the