The central legal point established in the judgment is the requirement for a cheque to be issued in discharge of a legally enforceable debt or liability under Section 138 of the Negotiable Instruments Act.

This appeal is directed against the order of acquittal in S.T.C.No.2445 of 1991 of learned Judicial Magistrate, Padmanabhapuram. By the judgment dated 16.04.1992, 1st Respondent / Accused was convicted of the Charge under Sec.138 Negotiable Instruments Act.

2. Gist of the Complaint. The Accused borrowed a sum of Rs.14,000/- from the Complainant on 14.08.1991 at Thakkalai, agreeing to repay the entire amount on 02.09.1991. When the Complainant demanded the amount on 02.09.1991, the Accused issued Ex.A.1 - Cheque, bearing No.522748 of the State Bank of India, Kalkulam Branch for Rs.14,000/-. Ex.A.1 - Cheque was presented for collection on the same day i.e. on 02.09.1991. The Cheque was returned unpaid for want of money with endorsement ' fund insufficient '. On 09.09.1991, the Complainant issued Ex.A.3 - Notice to the Accused. The same was received by the Accused on 24.09.1991. 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 P.W.1. Exs.P.1 to P.5 were marked. During the questioning under Sec.313 Crl.P.C., the Accused denied his liability stating that a false case is foisted against him. The 1st Respondent / Accused examined himself as D.W.1. Defence version. The Accused admits his signature in Ex.A.1 - Cheque along with the seal of Kothanallur Town Panchayat. Case of the Accused is that he affixed the seal in Ex.A.1 - Cheque as Panchayat President, Kothanallur. His tenure as President was over on 02.03.1991. But Ex.A.1 - cheque is dated 02.09.1991. 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, 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 Ex.A.1 - Cheque on 02.09.1990 on condition not to present it for collection. On that condition, Accused issued Ex.A.1 - Cheque without date and without filling drawee's name.

4. 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 Ex.A.1 - Cheque, the learned Magistrate acquitted the Accused on the following findings;

(i) Ex.A.1 - Cheque was not issued on 02.09.1991;

(ii) Since in Ex.A.1 - Cheque, seal of Kothanallur Panchayat President is affixed, presumably it must have been issued prior to 02.03.1991, since the Office of the Panchayat President was dissolved prior to 02.03.1991;

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

Aggrieved over the order of acquittal, the Complainant / Appellant has preferred this appeal.

5. Originally, against the order of acquittal, 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 04.10.1996.

6. Assailing the findings, the 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 Sec.139 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 the debt of Peer Mohammed and not to be encashed. Learned counsel for the Appellant / Complainant further contended that even if the defence version is accepted, the Accused cannot escape from Sec.138 of the Act, since the Cheque could be issued for di