The burden of proof rests on the complainant to establish the existence of a legally enforceable liability in cheque dishonor cases under the Negotiable Instruments Act. Failure to prove such liability at trial results in acquittal.

JUDGMENT :

M. NIRMAL KUMAR, J.

1. The appellant as complainant filed a private complaint in C.C.No.130 of 2013 for offence under Section 138 of the Negotiable Instruments Act, 1881 (in short ‘N.I. Act’) against the respondents/accused. The trial Court, by judgment dated 13.10.2016, convicted the respondents and sentenced to undergo six months simple imprisonment and to pay the cheque amount of Rs.28,61,100/- jointly by respondents 1 to 3 as compensation. Aggrieved by the same, the respondents/accused preferred an appeal in Crl. A. No.137 of 2016 before the V Additional District and Sessions Judge, Coimbatore. The learned Sessions Judge, by the judgment dated 13.12.2017, allowed the appeal setting aside the conviction and sentence passed by the trial Court, against which, the complainant had preferred the present appeal.

2. The case of the appellant/complainant is that the complainant is a limited Textile company authorised one Manoharan by Board Resolution dated 19.07.2010 to institute this complaint and prosecute the respondents. The first respondent is a partnership firm and respondents 2 and 3 are its partners. The first respondent placed orders with the appellant for purchase of power loom grey cloth on various dates and the appellant supplied the goods and raised four invoices. Invoice No.12 dated 18.03.2010 for Rs.8,32,143/-, Invoice No.13 dated 19.03.2010 for Rs.8,04,674/-, Invoice No.14 dated 22.03.2010 for Rs.8,84,575/- and Invoice No.15 dated 25.03.2010 for Rs.7,46,208, in total, the grey cloth to the value of Rs.32,67,600/- supplied. After repeated request by the appellant, the respondents issued nine cheques signed by the second and third respondents on behalf of first respondent drawn on IDBI Bank, Tiruppur, which are as follows:

3. The above nine cheques when presented for collection through the appellant’s bank, State Bank of India, Red Fields, Coimbatore on 28.06.2010. The cheques not honoured and returned for the reason ‘Funds Insufficient’ with a bank memo dated 30.06.2010. Thereafter, statutory notice issued on 21.07.2010 calling the respondents to pay the amount of Rs.28,61,100/- being the amount covered by nine cheques. The first and third respondents received notice on 26.07.2010 and the second respondent received on 28.07.2010 and they not repaid the amount but sent reply notice dated 31.07.2010 with false averments. Hence, ignoring the same, complaint filed.

4. During trial, on the side of the complainant, PW1 to PW4 examined. PW1, Accountant of the complainant company, PW2, Bank Manager of complainant’s bank, namely, State Bank of India, PW3, Bank Manager of the Accused, namely, IDBI Bank and PW4, Manager-Accounts in the complainant company. Through them Exs.P1 to P31 marked. On the side of the accused, no witnesses examined and no documents marked. On conclusion of trial, the trial Court convicted the respondents. The Lower Appellate Court allowed the appeal setting aside the conviction and sentence.

5. The learned counsel for the appellant/complainant submitted that in this case the respondents neither denied nine cheques/Exs.P6 to P14 nor the signature found in Exs.P6 to P14. Thus the statutory presumption under Sections 118 and 139 comes into play. Further it is a business transaction, goods supplied by the appellant covered by invoices/Exs.P2 to P5 and hence the cheques issued in discharge of the liability proved. After dishonour of the cheques, statutory notice/Ex.P24 issued on 21.07.2010. The reply notice/Ex.P28 sent by the respondents with false averment but not denied issuance of the cheques or their signature in cheques, but takes a stand that cheques issued to one Rajendran of M/s.KGR Textiles and the said Rajendran passed on the cheques to the appellant. Further for the liability with Rajendran, the s