IMPORTANT POINT
Where the amount of cheque is larger than the amount of debt or liability, dishonour of the cheque would not be an offence.

K. Balakrishnan Nair, J.—This is an appeal against acquittal of the 1st respondent/accused, filed by the complainant, after obtaining leave of this Court.

2. The brief facts of the case are following: The appellant is the complainant in S.T. No. 73/2000, on the files of the Chief Judicial Magistrate’s Court, Alappuzha. The complaint was one under Section 138 of the Negotiable Instruments Act (hereinafter referred to as “the Act”). The 1st respondent issued cheque No.454255 of Lord Krishna Bank, Alappuzha branch dated 4.6.1999 for an amount of Rs.4,61,400 to the appellant to discharge in full a debt due to him. On 9.6.1999, the 1st respondent paid an amount of Rs. 2,26,400 as part payment towards the amount due under the aforementioned cheque. The balance amount due to the appellant-complainant was only Rs.2,35,000. Since the said balance amount was not paid, the appellant presented the cheque through the Central Bank of India, Kottayam on 30.11.1999 for collection. But the cheque was returned dishonoured for insufficiency of funds in the account of the accused with the Lord Krishna Bank, Alappuzha branch. The appellant caused to issue a lawyer notice on 7.12.1999 to the 1st respondent accused, informing him of the dishonour of the cheque and also demanding payment of the balance amount due to him. The notice was returned unclaimed. So, the appellant preferred a complaint before the Chief Judicial Magistrate’s Court under Section 138 of the Act. On summons, the accused appeared and pleaded not guilty, when the particulars of the offence alleged against him were read over to him. So, from the side of the complainant, he and another were examined as PWs. 1 and 2 and Exs. P1 to P9 were marked. The accused was questioned under Section 313 Cr.P.C. He denied the circumstances against him, which appeared in the evidence of the complainant and which were put to him. No witness was examined from his side. During the cross-examination of PW1, suggestions were made to the effect that what was issued was only a blank cheque, it was issued for an amount of Rs. 2,26,400 and the same was paid also.

3. The Trial Court, after considering the evidence on record, found that the accused issued a cheque dated 4.6.1999 to the complainant for an amount of Rs. 4,61,400. Towards the liability, the accused repaid an amount of Rs. 2,26,400. Therefore, the cheque was presented, claiming the full amount. On dishonour, the complainant caused to issue a lawyer notice, Ext. P3 dated 7.12.1999, claiming the balance amount due under the cheque, giving credit for the repaid amount of Rs. 2,26,400. The accused did not accept the notice. It was returned unclaimed. He has chosen not to pay the balance amount due under the cheque, pursuant to the said notice. The Trial Court took the view that since the cheque presented was not for the amount due from the accused, no offence was made out under Section 138 of the Act. Therefore, the accused was acquitted under Section 255 (1) of the Cr. P.C. Hence this appeal.

4. At the time of final hearing of the appeal before the learned Single Judge, the learned counsel for the appellant relied on the decision of a learned Single Judge of this Court in R Gopikuttan Pillai v. Sankara Narayanan Nair.1 That was a case where part payment was made toward the amount due under the cheque. When the cheque was dishonoured, it was held that the offence under Section 138 of the Act was made out. On the other hand, the defence relied on the decision of this Court in Supply House v. Ullas2 in which another learned Single Judge of this Court took a contrary view, where the amount represented by the cheque was larger than the amount due from the drawer. In view of the apparent conflict between the two decisions, the learned Single Judge, who heard the matter, referred it for decision by the Division Bench.

5. We heard the learned counsel on both sides. In this case, the facts of the case were not disputed before us by both sides. So, w