A cheque must be issued in discharge of a legally enforceable debt to attract the penal provisions under Sec.138 of N.I.Act, and the presumption under Sec.139 of N.I.Act is rebuttable. Additionally, the court emphasized the requirement for clear averments of deliberate evasion of service of notice to raise the presumption of constructive notice.

1. Complainant in C.C.415/1993 on the file of Judicial Magistrate, Periyakulam is the Appellant. By the Judgment dated 28.8.1996, the Judicial Magistrate, Periyakulam had acquitted the Respondent/accused under Sec.138 of Negotiable Instruments Act, 1881 (for short ‘N.I.Act’). Aggrieved over the order of acquittal, Complainant has preferred this Appeal.

2. Case of Complainant is that he is doing business of selling auto parts under the name and style M/s.Alim Auto Supplies. The accused and his brother one Kanagaraj are having transport business running two lorries under the name and style “M/s.Angala Easwari & Santhi Lorry Services”. The accused purchased auto parts from the complainant’s shop on credit for both the lorries.

3. As on 20.5.1992, the outstanding credit balance on account of the two lorries was Rs.24,415. Towards discharge of part of the balance amount, the accused issued Ex.P.1-Cheque for Rs.24,400 on 30.9.1992 at Periyakulam drawn on State Bank of India, Theni Branch. The Complainant presented the cheque in Lakshmi Vilas Bank, Periyakulam for collection. The cheque was dishonoured for “insufficient funds”. The same was intimated to the Complainant by his Bank under Ex.P.2 - Memo on 9.12.1992.

4. On 19.12.1992, the accused issued Ex.P.3-lawyer’s notice demanding the amount due on the cheque. The accused intentionally evaded service of the notice and the notice returned to the sender with the endorsement “intimation given; not claimed”. Since the accused evaded the service of notice, it must be deemed to be constructive notice and sufficient service of notice on the accused. The accused failed to pay the cheque amount till 15.1.1993. Hence, the Complaint was filed against the accused under Sec.1 38 of N.I.Act.

5. To substantiate the averments in the Complaint, on behalf of the complainant, complainant examined himself as P.W.1. P.W.2 is the Banker of the complainant. Exs.P-1 to P-6 are marked. No oral evidence was adduced on behalf of Respondent/accused. But Exs.D-1 to D-6 were marked on the side of the accused.

6. The defence is that Ex.P.1-cheque was issued as security for the business transaction of Angala Easwari Lorry alone and there is no legally enforceable debt from the accused. Another lorry by name Santhi Lorry Service is owned and run by the brother of the accused namely, Kanagaraj. Amount payable by the accused was already discharged under Exs.D-4 to D-6 and there is no subsisting debt from the accused. Further case of the defence is that the complainant is not right in clubbing the amount to that of the accused even if there is any amount due from Santhi Lorry.

7. Upon consideration of the evidence and materials, the trial Court found:

(i) while A4-Notice was sent to both accused and his brother Kanagaraj, the said Kanagaraj is not shown as accused in the complaint, which fatally affects the complaint;

(ii) that there is no evidence showing the amount payable by the accused and the complainant failed to establish that Ex.P.1-Cheque was given to prove the legally enforceable debt due from the accused;

(iii) Ex.P.4-statutory notice was returned with an endorsement “intimation given; not claimed” and that the same cannot be construed as constructive notice and there is no sufficient service of notice upon the accused. On the above reasonings, finding that the essential ingredients of Secs.138 and 142 of N.I.Act are not proved, the learned Magistrate acquitted the Respondent/accused.

8. Aggrieved over the order of acquittal, the Complainant has preferred this Appeal.

9. The learned counsel for the Appellant/Complainant submitted that once the cheque is issued, the presumption under Sec.138 of N.I.Act arises and the trial Court erred in finding that there is no legally enforceable debt from the accused. Drawing the attention of the Court to the averments in Ex.P.4 - Notice and the Statement of Accounts maintained by the Complainant, the learned counsel further contended that when the accused