The main legal point established in the judgment is the requirement to prove that a cheque was drawn to discharge a subsisting liability under Section 138 of the Negotiable Instruments Act.

This appeal has been preferred against the judgment in C.A.No.168 of 2001 on the file of Second Additional Sessions Judge, Erode which had arisen out of a Judgment in C.C.No.632 of 2000 on the file of Court of Judicial Magistrate No.1, Erode.

2. The appellant/complainant had preferred C.C.No.632 of 2000 under Section 138 of Negotiable Instruments Act(hereinafter referred to as N.I.Act) According to the complainant, the accused/respondent had borrowed a sum of Rs.1,50,000/- from the complainant/appellant on 3. 1998 and executed a promissory note and the xerox copy of the same was marked before the trial Court as Ex P1. According to the complainant, upto 12. 1998,the accused has paid the interest at the agreed rate under the original of Ex P1. To discharge the said loan,the accused had drawn a cheque for Rs.1,50,000/-. When the same was presented before the concerned Bank, the same was returned with an endorsement "Account closed". Thereafter, the complainant issued a notice on 29. 2000 under the original of Ex P5 which was received by the accused under Ex P6 acknowledgment. After the receipt of original Ex P5 notice, the accused had drawn Ex P2 cheque for Rs.2,15,000/- dated 19. 2000 and that it is a post dated cheque which was handed over to him on 16. 2000. When the said cheque was presented on 19. 2000, the same was dishonoured on the ground that "insufficient funds" as per Ex P3 and Ex P4 advices. As per Ex P7 statement of account in September 2000,the accused was having only a sum of Rs.1684.50ps in his account. No exhibit was marked on the side of the accused and no oral evidence was also let in on the side of the accused. On the basis of the oral and documentary evidence let in on the side of the complainant, the trial Judge had come to a conclusion that the accused is guilty under Section 138 of N.I.Act and accordingly convicted and sentenced the accused to undergo six months rigorous imprisonment and a fine of Rs.5,000/- with default sentence. Aggrieved by the findings of the learned trial Judge, the accused has preferred an appeal before the first appellate Court in C.A.No.186 of 2001 on the file of Second Additional Sessions Judge, Erode. The first appellate Judge, after considering the submissions made by the learned counsel on both sides and after going through the materials placed before the trial Court, had allowed the appeal thereby setting aside the conviction and sentence imposed by the learned trial Judge in C.C.No.632 of 2000 and acquitted the accused from the charges levelled against him which necessitated the complainant to prefer this appeal.

3. Heard Mr. A.K. Kumarasamy, learned counsel for the appellant and Mr.N.Manoharan, learned counsel for the respondent and considered their rival submissions.

4. Now the point to be decided in this appeal is whether the offence under Section 138 of NI Act has been made out against the accused to warrant conviction under the said provision of law?

5.The point:-

The learned first appellate Judge had set aside the conviction and sentence imposed by the learned trial Judge in C.C.No.632 of 2000 on the following grounds.

a) The cheque amount under Ex P2 ie., Rs.2,15,000/-is not in conformity with the statement of account filed under Ex P11 produced by the complainant and that as per Ex P11, if the interest is calculated for the principal amount of Rs.1,50,000/- due for the period from 12. 1998 to 16. 2000 at the rate of Rs.3,150/- p.m., it comes to Rs.56,700/-and if this interest amount is added to the principal amount of Rs.1,50,000/-, the amount due comes to Rs.2,06,700/-but Ex P2 cheque was drawn by the accused for Rs.2,15,000/- and hence the learned first appellate Judge has held that Ex P2 is not drawn to discharge the subsisting liability.

b) The other reasoning given in the first appellate Judges Judgment for allowing the appeal is that in the cross examination P.W.1 has admitted that the cheque issued on 6. 2000 was bearing cheque No.068920 whereas E