IMPORTANT POINT
Where a cheque issued not for the purpose of discharge of any debt/liability, return of such cheque unpaid will not meet with the penal consequences and the maker of the cheque not liable for prosecution.

Mrs. R. Banumathi J. —This appeal is directed against the Order of acquittal in S.T.C. No. 2445 of 1991 of the learned Judicial Magistrate, Padmanabhapuram. By the Judgment dated April 16, 1992, the first respondent/accused was convicted of the charge under Section 138 of the Negotiable Instruments Act, 1881.

2. Gist of the complaint : The accused borrowed a sum of Rs. 14,000/- from the complainant on August 14, 1991, at Thakkalai, agreeing to repay the entire amount on September 2, 1991. When the complainant demanded the amount on September 2,1991, the accused issued exhibit A.1-cheque, bearing No. 522748 of the State Bank of India, Kalkulam branch for Rs. 14,000/-. Exhibit A.1-cheque was presented for collection on the same day i.e., on September 2, 1991. The cheque was returned unpaid for want of money with the endorsement “funds insufficient”. On September 9,1991, the complainant issued exhibit A.3-notice to the accused. The same was received by the accused on September 24, 1991. But the accused did not pay the amount. Hence, the complaint.

3. To substantiate the averments made in the complaint, in the trial court the complainant examined himself as PW.1. Exhibits P1 to P5 were marked. During the questioning under Section 313 of the Criminal Procedure Code, the accused denied his liability stating that a false case is foisted against him. The first respondent/accused examined himself as D.W. 1.

4. Defence version: The accused admits his signature in exhibits A.1-cheque along with the seal of Kothanallur Town Panchayat. The case of the accused is that he affixed the seal in exhibit A.1-cheque as Panchayat President, Kothanallur. His tenure as President was over on March 2, 1991. But exhibit A.1-cheque is dated September 2,1990. According to the accused, the complainant was running a chit transaction. One Peer Mohammed bid the chit from the complainant. The said Peer Mohammed had not complied with the payment schedule. On the complaint by the complainant, Peer Mohammed was taken to police custody by Inspector of Police, Thakkalai. At that time, to get Peer Mohammed released, at the request of Peer Mohammed and his friends, the accused had talks with the complainant Vijaya Raj. The complainant informed him that if the accused gives cheque security, Peer Mohammed would be released. Accordingly, the accused issued exhibit A.1-cheque on September 2, 1990, on condition not to present it for collection. On that condition, the accused issued exhibit A.1-cheque without date and without filling the drawee’s name.

5. Upon consideration of the evidence, materials and the defence version and referring to the admission of the complainant that he filled the name “Vijaya Raj” and the date in exhibit A.1-chcque, the learned Magistrate acquitted the accused on the following findings :

(i)Exhibit 1-cheque was not issued on September 2, 1991 ;

(ii) Since in exhibit A.1-cheque, the seal of Kothanallur Panchayat President is affixed, presumably it must have been issued prior to March, 2,1991, since the office of the Panchayat President was dissolved prior to March 2, 1991;

(iii)That exhibit A.1-cheque is not supported by consideration.

6. Aggrieved over the Order of acquittal, the complainant/appellant has preferred this appeal.

7. Originally, against the Order of acquittal, a revision was filed as Crl.. R. C. No.342 of 1992, which was permitted to be treated as appeal by the Order of this court in Crl. M. P. No.3199 of 1996 in Crl. R. C. No.343 of 1992 dated October 4, 1996.

8. Assailing the findings, learned counsel for the appellant/complainant submitted that when the complainant was found to be the holder of the cheque, the presumption arises that he is the holder in due course and the presumption against the accused arises under section 139 of the Negotiable Instruments Act. It is further submitted that the accused having issued the cheque, the burden is upon the accused to prove that the cheque was issued only as security for