Presumptions under the Negotiable Instruments Act arise only when a debt is established; failure to prove liability results in acquittal.

J U D G M E N T

This is an appeal under Section 378 (4) Cr.P.C. filed by the complainant against the judgment dated 08/08/2006 in C.C.No.356/2005 on the file of the Judicial First Class Magistrate Court-I, Kottayam, aggrieved by the acquittal of the accused under Section 255 (1) Cr.P.C. of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (the N.I. Act)

2. The case of the complainant is as follows – the complainant is a Private Limited Company registered under the Companies Act and is engaged in manufacturing business at Kottayam. Shibu P. Mathew, the Managing Director, in charge of the day to day business activities of the Company has nominated, constituted and appointed K.N.Muraleedharan Nair as the power of attorney holder to institute and prosecute the complaint for and on behalf of the Company. Ext.P2 (Ext.P10) agreement dated 14/11/2001 was entered into between the complainant Company and the accused as per which the latter was made the representative of the Company. An amount of ₹94,272/- was due to the complainant from the accused out of the business transactions in respect of the aforesaid agreement. In discharge of the said amount, Ext.P3 cheque dated 07/11/2003 drawn on the Punjab National Bank, Kannur Branch was issued by the accused in favour of the complainant. When the complainant presented the cheque for collection and encashment through the State Bank of Tranvancore, Kottayam Branch, the cheque was dishonoured as per Exts.P4 and P5 memos dated 12/11/2003 and 21/11/2003 respectively. The cheque was dishonoured for the reason that the account had been closed. Pursuant to the same, the complainant caused to issue Ext.P6 notice dated 28/11/2003 to the accused calling upon him to repay the cheque amount within a period of 15 days from the date of receipt of the notice. The accused received the notice on 01/12/2003, which is evident from Ext.P8 acknowledgment card. However, he sent a reply notice raising false and frivolous contentions. Hence, the complaint.

3. The trial court on the basis of the sworn statement of the complainant, took cognizance of the offence under Section 138 of the N.I. Act and summons was issued to the accused. When the accused appeared on receipt of summons, he was enlarged on bail. He was also furnished with copies of all the relevant records. The particulars of the offence was read over and explained to the accused, to which he pleaded not guilty.

4. The complainant examined himself as PW1 and Exts.P1 to P15 were marked on his side. After closing the evidence of the complainant, the accused was duly questioned under Section 313(1)(b) Cr.P.C. He denied the entire allegations and maintained his innocence. He submitted that when he had entered into Ext.P2 (Ext.P10) agreement with the complainant, he had entrusted two blank signed cheque leafs to the complainant as guarantee. Ext.P3 is one of the cheques thus entrusted to the complainant. On 22/09/2003, he had issued Ext.D1 notice to the complainant asking the complainant not to present the cheque before the bank. Thereafter he filed Ext.D3 suit on 10/11/2003 before the Munsiff Court, Kannur, inter alia seeking a decree of mandatory injunction directing the complainant to return the cheque leafs given to the Company. The accused examined himself as DW1 and Exts.D1 to D6 were marked on his side.

5. The trial court on a consideration of the oral and documentary evidence and after hearing both sides, found the accused not guilty of the offence punishable under Section 138 of the N.I. Act and hence acquitted the accused under Section 255 (1) Cr.P.C. Aggrieved, the complainant has come up in appeal.

6. The only point that arises for consideration in this appeal is whether the finding of acquittal of the accused by the trial court requires any interference by this Court.

7. Heard both sides.

8. It was submitted by the learned counsel for the appellant/complainant that the signature in Ext.P3 cheque is admitted by the accuse