JUDGMENT :- The original complainant who has filed Criminal Case No.1335/1991 under Section 138 of the Negotiable Instruments Act has filed this appeal, as Judicial Magistrate, First Class, Gondia has dismissed the complaint and acquitted the accused.

2. The Judgment of acquittal is based on the finding that the transaction, in question, was by way of security and was not towards the discharge of debt or liability and, therefore, the transaction was beyond the scope of Section 138 of the Negotiable Instruments Act.

3. The Judgment of acquittal is challenged on the ground of being erroneous, illegal and based on considerations not borne on record, and by drawing inferences which are not permissible from the evidence on record.

4. It is seen that the complainant has examined himself, he gave entire account of facts and the background in which for the cheque was given. He has proved the entire transaction and that in the open and current account maintained by him arrears of Rs.51,888/- were recoverable, from the accused which he gave a cheque of Rs.50,000/-. On presentation, the cheque was dishonoured. On 13-07-1991 i.e., after service of statutory notice, the accused paid a sum of Rs.30,000/- by demand draft. In the cross-examination, suggestions were given to the complainant by the accused to the effect that the cheque was given in 1989 by way of security. The suggestion was denied by the complainant. It is seen that the complainant's evidence which was recorded is at Exh.15, and the evidence was closed by filing Exh.35.

5. The statement of accused under Section 313 of Criminal Procedure Code was recorded. The accused also sought to file statement on affidavit. It is seen that no such statement on affidavit is filed.

6. It is seen that in the statement under Section 313 of Criminal Procedure Code, the accused was asked certain questions. He replied admitting that he had transactions, and stated that he had given cheque by way of security in 1989 and denied that towards arrears a sum of Rs.51 ,888/- was recoverable from him. In response to the questions no.6 to 9, the accused has replied as follows:"

Question No.6 : Why the complainant is deposing against you?

Answer I : do not know.

Question No.7 : Do you want to give statement on oath?

NO.

Answer : No

Question No.8 : Do you want to lead defence evidence?

Answer : No

Question No.9 : What else you want to say about the case?"

Answer : In August 1989 complainant demanded Security of cheque for giving me goods on credit so I issued cheque. Case is false.

[Quoted from page 37 of paper book]

7. Upon recording statement under Section 313 of Criminal Procedure Code, case proceeded for oral arguments and thereupon for Judgment.

8. In the body of Judgment Learned Trial Court formulated the following questions. POINTS FINDING (1) Whether complainant proves that cheque No.803870 of the Bank of Maharashtra was issued to him by the Accused on 30-03-1991 for discharge of liability of payment of dues of Rs.51,888/- towards the price of purchase of goods from time to time? Negative.

(2) Whether offence u/s 138 of I Negotiable Instruments Act is proved by the complainant? Negative.

9. The learned Trial Judge upon, what appeared to him on appreciation of evidence, found that the complainant failed to prove that a sum of Rs.51,888/- was due and recoverable, and that the cheque for Rs.50,0001 - was given by way of payment of dues. Learned Trial Judge found the circumstances of three signatures and writing in three different inks on the cheque to be a circumstances giving suspicion. Trial Court further observed and held that: "All these facts compells to accept the theory put forth by the accused that the cheque (Blank) was issued in 1989 only as a 'Security' to continue transactions (Credit) and not towards discharge of debt or liability. Hence, the case goes out of the scope of Sec.138 of Negotiable Instruments Act." [Page 74-75 of Paper Book] and held that the questions framed by

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