IMPORTANT POINT
Section 138 of N.I. Act does not in any way debar a person from taking up another person's liability or insist that cheque should be one drawn to discharge liability of the drawer.

M.R. Hariharan Nair, J.- The petitioner is the accused in C.C. No. 326 of 1992 of the Judicial First Class Magistrate Court-I. Attingal and the appellant in Crl. Appeal No. 330 of 1993 of the Additional Sessions Court. Thiruvananthapuram. He challenges the concurrent findings of the said two courts that he is guilty of the offence under Section 138 of the Negotiable Instruments Act as also the sentence of R.I for one year and fine of Rs. 5000/- (in default R.I. for three months) imposed therefor.

2. In his complaint the present first respondent alleged that he is a financier; that the petitioner borrowed a sum of Rs. 2.70,000/- in two instalments of Rs. 2.05.000/- and Rs. 65.000/- on 11-3-1991 and 15-3-1991 respectively; that towards repayment of the said amount Ext. PI cheque was issued based on an assurance contained in an agreement that the cheque would be returned in case the amount was repaid before 31-3-1992; that on presentment the cheque was dishonoured for want of funds on 24-4-1992 and that inspite of Ext. P6 notice served on the petitioner the amount remained unpaid.

3. During trial, the petitioner conceded that Ext. PI cheque was given to the complainant but took the stand that it was devoid of consideration. According to him what actually happened was that one Sivadasan Chandran received some amount from the complainant and when he failed to repay the same the petitioner intervened and gave his own cheque. The aforesaid Chandran subsequently repaid the amount and there upon return of Ext. P1 cheque was sought for. This was not complied with and the case is filed in this background.

4. The learned counsel for the petitioner submitted that there is nothing to show that the petitioner got any amount from the complainant or that the cheque was issued to cover a legal liability. Actually it was given only as security for the transaction between the complainant and Chandran. This fact is admitted in Ext. P6 notice also. Case law was relied on to show that in case a cheque is issued by way of security no criminal liability could arise from the dishonour pf such cheque.

5.. It is conceded in Ext. P6 that the complainant had agreed with the petitioner that no action would be taken based on Ext. P1 cheque in case the amount due was paid on or before 31-3-1992 and that a separate agreement was executed. The question is whether the execution of such an agreement (not produced in this case) would affect the criminal liability of the petitioner. Yet another aspect to be gone into is whether the contention that there was no legally enforceable debt due from the petitioner on the date of execution of Ext. P1 and whether allegation that actually the petitioner as a mediator issued the cheque to cover up the liability of Chandran exculpates him from liability.

6. It may be mentioned here that even though the contention taken is that Chandran had repaid the amount due to the complainant. no evidence whatsoever is adduced on the point.

7. Point: S. 138 of the Negotiable Instruments Act reads as follows:

"138. Dishonour of cheque for insufficiency etc. of funds in the account. Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge in whole or in part of any debt or other liability is returned by the bank unpaid either because of the amount of money standing to the credit of that account is insufficient to honour the cheque Or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank such person shall be deemed to have committed an, offence and shall without prejudice to any other provision of this Act be punished with imprisonment for a term which may extend to one year or with fine which may extend to twice the amount of the cheque or with both:

Provided that nothing contained in this section shall apply unless-

(a) the cheque has been presented to the bank within a per