IMPORTANT POINT:
Cheque dishonoured on ground of insufficient funds, order of acquittal of accused set aside and matter remanded back to trial Court.

P.S. Narayana, J.—Heard Sri D.V.N. Acharya, Counsel representing the appellant, Sri Mohd. Osman Shaheed, Additional Public Prosecutor and also Sri B.P. Raju, counsel representing R-1 and R-2.

2. Sri D.V.N. Acharya, learned counsel representing the appellant had pointed out that there is no controversy relating to the fact that A 2 had issued the cheques Exs. P 3 and P4. The learned counsel also would submit that there is no serious controversy relating to Exs. P 1 and P2, the promissory notes executed by the accused. The counsel also would submit that it is no doubt true A 1 had not issued any cheque to appellant complainant. However, the counsel would submit that as far as A 2 is concerned, acquittal was recorded on the ground that the complainant had no authorization to represent the complainant/registered partnership firm. This approach of the learned II Additional Judicial Magistrate of First Class of Eluru is erroneous and cannot be sustained. The counsel also placed reliance on Geekay Exim (India) Ltd. and Ors. v. State of Gujarat and Anr.1

3. The learned Additional Public Prosecutor wound contend that in the facts and circumstances of the case, recording acquittal on the ground that complaint is not maintainable as against A2 also on the ground of want of authorization to represent the partnership firm, especially in the light of the fact that P.W. 1 is the Managing partner cannot be sustained.

4. Per contra, Sri B.P. Raju, learned counsel representing R 1 and R2 A1and A2 would submit that A1 did not issue any cheque at all to the complainant and hence the very taking cognizance of the offence under Section 138 of the Negotiable Instruments Act itself is illegal. Hence, the learned Magistrate had recorded reasons while recording an acquittal as against A 1 which cannot be disturbed. The counsel also pointed out that a finding had been recorded that in view of the fact that Exs P1 and P2 were still in force and were legally enforceable as on the said dates, the contention of the accused that there is no legally enforceable debt, cannot be sustained. This view, expressed by the learned Magistrate, also cannot be sustained for the reason that except the evidence of PW1 there is no other evidence in relating to proof of Exs. P1 and P2. Hence, the said finding also cannot be sustained. The learned counsel also would further contend that apart from this aspect of the matter, since the authority of PW1 to represent the partnership firm is itself doubtful, the learned Magistrate came to the conclusion that the complaint is not maintainable as against A2 also and recorded an acquittal and hence the findings are to be confirmed.

5. Heard the counsel on record.

6. The appellant complainant Sri Vasavi Chit funds, Eluru, represented by its Managing Partner had filed the complaint as against A 1 and A 2 under Section 138 of Negotiable Instruments Act, 1881 (hereinafter, in short, referred to as ‘the Act’ for the purpose of convenience). The case of the prosecution is that on 7.12.1993 both the accused executed a promissory note of Rs. 27,000 in favour of the complainant firm in respect of amount due by them. On the demand by the complainant, the second accused gave him three different cheques for Rs. 3,000, Rs. 3,000 and Rs. 4,000 respectively with dates 15.4.1995, 15.6.1995 and 15.8.1995 and the said cheques were issued in the presence of A 1 at their residence at Eluru and they were drawn on Vysya Bank, Hyderabad Branch. After receiving the three cheques, the complainant presented them for collection through Bank of India, Eluru on 21.8.1995. They were returned on 1.9.1995 as unpaid due to insufficient funds in the bank account of A2. On 14.9.1995 the complainant got issued a registered legal notice to both the accused calling upon them to pay the cheque amounts. On 15.9.1995 both the accused received the notices, but failed to pay the said amounts.

7. In support of the prosecution, P.W. 1 was examined Exs. P1 to P10 were marked.