The main legal point established in the judgment is the application and interpretation of Section 138 of the Negotiable Instruments Act in a case involving the dishonour of a cheque.

1. The Respondent herein / complainant had filed C.C.No.73 of 2001, on the file of Judicial Magistrate No.1, Tiruppur, against the revision petitioner herein / accused under Section 138 of Negotiable Instruments Act, stating that the 1st accused is the partnership firm and the 2nd and 3rd accused, who are husband and wife are partners of the firm. It was submitted that both of them had purchased yarn from the complainant's firm and as such, the accused have to pay a sum of Rs.10,53,284/-outstanding. Hence, in order to discharge the said loan, the accused had issued cheque for a sum of Rs.5,26,642/- in order to discharge a portion of the legally enforceable debt. The said cheque was dishonoured. Hence, the above case has been filed against the accused. On the side of the complainant, three witnesses were examined and 22 documents were marked, namely, Resolution of complainant's Company; General power of attorney; Statement of accounts; Cheques which were dishonoured; Bank invoice; Acknowledgment Cards; Advocate notice; Reply notice; Invoice regarding supply of goods; Receipt of yarn confirmation letter; agreement; Bank statement of accused; Copy of the ledger; Bank statement of the complainant; etc.

2. On the side of the respondent, the 2nd accused was examined as RW1 and another witness was examined as RW2. The respondent had marked 6 documents namely three receipts issued by Tamilselvan to the accused; Complaint Copy, which had been lodged before the Tiruppur Police Station and Copy of receipt issued by police station. PW1 had adduced evidence that the complainant's company is a partnership firm and he is the Manager of the company. The 1st accused is a partnership Company and the 2nd and 3rd accused are its partners. The accused are running a spinning mill and they have purchased yarns from the complainant's Company on 18.09.2000 and 20.09.2000 under two invoices for a sum of Rs.10,53,284/-. PW 1 further stated that the accused had issued cheque for a sum of Rs.5,26,642/- dated 27.11.2000, which had been presented for encashment and the same was returned. PW 1, in support of his evidence had marked the above mentioned documents in order to prove that he had observed all legal formalities.

3. PW2, Manager, attached to the Hind Sind Bank had adduced evidence regarding dishonour of cheque. PW3, Bank Manager, attached to Vaishya Bank had also adduced evidence on similar lines of PW 2. The accused after receiving copy of the complaint, had pleaded not guilty and hence, the case had been proceeded with. RW 1, the 2nd accused, Kulandaivelu had adduced evidence that he and the 3rd accused are partners of the 1st accused firm. He deposed that the said cheque had been issued as security for yarn purchase business and that the said cheque was presented without intimation to him. He deposed that he had paid the entire cheque amount in 3 installments for which one Tamilselvan had issued acknowledgment in his letter pad.

4. RW2, accountant had adduced evidence that he was the accountant in the 1st accused firm and he had never seen the complainant. He deposed that there was no transactions with the complainant's firm, but the accused firm had transactions with one Govindasamy, Director of the said complainant's firm. On considering the evidence of both sides and on perusing the documents marked by them, the learned Magistrate had come to a conclusion that all the accused are guilty of offence under Section 138 of Negotiable Instruments Act. Further, each of the 2nd and 3 accused were sentenced to undergo one year Rigorous Imprisonment. Further the learned Magistrate had ordered the accused to pay compensation of a sum of Rs.5,26,642/- to the complainant.

5. Against the said conviction and sentence and compensation, the accused has filed the appeal in C.C.No.382 of 2002, on the file of Additional District and Sessions Judge Cum Fast Track Court No.III, Coimbatore. The learned Judge, after hearing the arguments advanced by the le