IMPORTANT POINTS
The existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion--Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.

This instant appeal is directed against judgment dated 3rd April, 2008 rendered by the learned Judicial First Class Magistrate-III, Kottarakkara in C.C.No.188/2007 acquitting the accused under Section 138 of the Negotiable Instruments Act, 1881 ('the Act' for short).

2. It is the case of the appellant/complainant (hereinafter referred to as 'complainant') that the respondent/accused (hereinafter referred to as the 'accused') borrowed a sum of Rs.1,25,000/-on 20.3.2006 and issued a cheque drawn on Kollam District Co-operative Bank, Oyoor Branch in the name of the complainant towards repayment of the loan. The complainant presented the said cheque for encashment through Federal Bank, Oyoor Branch. But the cheque was returned unpaid with the endorsement 'funds insufficient'. On 18.5.2006, the complainant issued a legal notice to the accused through his Advocate calling upon the accused to pay the cheque amount. The said notice, sent by registered post duly served on the accused. The accused, however did not reply to the notice nor did he pay the cheque amount to the complainant.

3. The complainant filed a criminal complaint under Section 138 of the Act before the court below. Upon consideration of the complaint, the learned Magistrate is prima facie satisfied that a case is made out against the accused. Hence the learned Magistrate took cognizance of the offence under Section 138 of the Act and the case was taken on file as C.C.No.785/2006 of the Judicial First Class Magistrate Court-II, Kottarakkara. Thereafter, the case was transferred to the Judicial First Class Magistrate Court-III, Kottarakkara where the case was renumbered as C.C.No.188/2007.

4. On service of summons, the accused appeared before the trial court. Particulars of the offence were read over and explained to the accused to which the accused pleaded not guilty. Thereafter, the complainant was examined as PW1 and marked Exts.P1 to P6. After the witnesses for the complainant had been examined and before the accused was called on for his defence, the accused was questioned under Section 313(1)(b) of Cr.P.C. for the purpose of enabling the accused personally to explain any circumstance appearing in the evidence against him. According to him, he had borrowed a sum of Rs.10,000/-from the father of the complainant. He further contended that the said amount was returned. That apart, he contended that the cheque leaves which were given as security were not returned when the amount was paid back. According to him, he had no account with the Kollam District Co-operative Bank and it was the father of the complainant who introduced him in the said Bank for the purpose of opening an account there. In support of his contentions, he produced his pass book and got it marked as Ext.D1. Copy of account opening form, copy of ledger folio, and copy of cheque book issue register were marked as Exts.D2 to D4 respectively.

5. On appreciation of evidence, the learned Magistrate held that execution of the cheque was admitted by the accused and that it was proved by the complainant that the cheque was dishonoured on account of “insufficient funds”. However, the learned Magistrate concluded that the cheques were not issued by the accused for discharge of a debt or liability. The learned Magistrate mainly relied on the oral evidence of PWs1 and 2 and Exts.D1 to D4 and held that the defence pleaded by the accused was more probabilised. DW1 adduced evidence to show that the account with the District Co-operative Bank, Kollam was seen opened on 2.11.2005. Consequently, Ext.D1 pass book was issued. Ext.D4 is the cheque book issue register which would show that two cheque leaves were given to the accused. Ext.D2 account opening form indicates that the accused was introduced by one Babykutty who is the father of the complainant. Yet another witness was examined by the accused as DW2 to show that Rs.10,000/-was borrowed by the accused from the father of the complainant. DW2 stated that after