The main legal point established in the judgment is the interpretation of Sections 138 and 139 of the Negotiable Instruments Act, the presumption in favor of the holder of a cheque, and the objective of promoting the efficacy of banking operations and ensuring credibility in business transactions through banks.

This appeal has been preferred against the judgment in C.C.No.2748 of 1994 on the file of the VII Metropolitan Magistrate, Chennai, dated 35. 2000. The private complaint was preferred under Section 200 of Cr.P.C., by the complainant against the accused for an offence under Section 138 of the Negotiable Instruments Act.

2. The brief facts in the complaint relevant for the purpose of deciding this appeal are as follows:

The complainant is indulged in cement business in the name of Ram Co Cements. The accused used to purchase cement bags from the complainant on credit basis. As per the statement of accounts as on 30.4.1994 a sum of Rs.3,50,250/-was the amount due from the accused to the complainant. To discharge the above said debt the accused had drawn a cheque for Rs.3,50,250/-on 30.4.1994 in the name of the complainant, which on presentation in State Bank of India, Commercial Branch, Chennai, was returned with an endorsement that there was no sufficient funds in the account of the accused. A statutory notice under Section 138 of the Negotiable Instruments Act was issued by the complainant to the accused. The accused had received the notice and sent a letter dated 11. 1995 but not chosen to repay the cheque amount. Hence, the complaint.

3. The said complaint was taken on file by the learned Magistrate after recording the sworn statement of the complainant. On appearance of the accused on summons copies under Section 207 of Cr.P.C., were furnished to the accused and when the offence was explained to the accused he pleaded not guilty. On the side of the complainant P.W.1 to P.W.3 were examined and Ex.P.1 to Ex.P.7 were exhibited.

4. When incriminating circumstances were put to the accused under Section 313 of Cr.P.C., the accused would deny his complicity with the crime.

5. The accused has examined himself as D.W.1 besides examining one Shankaranarayanan as D.W.2 and exhibited Ex.D.1 to Ex.D.8 on his side.

6. After going through the oral and documentary evidence the learned Magistrate had come to the conclusion that the guilt against the accused has not been proved by the complainant beyond any reasonable doubt and accordingly the learned Magistrate has acquitted the accused under Section 255(1) of Cr.P.C., which necessitated the complainant to prefer this appeal.

7. Now the point for determination in this appeal is whether the offence under Section 138 of the Negotiable Instruments Act has been made out against the accused to warrant conviction under the above provision of law?

8. The Point:

8(a) The appeal has been preferred against the acquittal. As per the dictum laid down by the Honourable Apex Court as well as by this Court in various ratios the point to be gone into in an appeal against acquittal is whether the judgment of the trial Court is perverse in nature to warrant interference. Relying on Ex.P.7, letter dated 11. 1995 written by the accused to the complainant, the learned trial judge has held that the entire debt amount has been discharged by the accused under several installments as stated in Ex.P.7. But a perusal of Ex.P.7 will go to show that the accused has given only an undertaking to repay the debt amount in installments ranging from January 1995 to August 1995. The mere fact that the letter of undertaking was given on 11. 1995 under Ex.P.7 will not absolve the accused from his liability.

8(b) The only point to be considered in this case is whether an offence under Section 138 of the Negotiable Installments Act has been made out against the accused or not? To find a person guilty under section 138 of the Negotiable Installments Act the ingredients are, a cheque should have been drawn by a person for payment of any amount of money to another person from that of an account maintained by him in a bank in order to discharge in whole or in part of any debt or other liability and when the said cheque was presented by the payee to the bank for collection it should have been dishonoured by the bank