A cheque issued for another's liability can still be enforceable under Section 138 of the NI Act, affirming the presumption of debt.

JUDGMENT

T his appeal is at the instance of the complainant in ST No.80 of 2005 on the file of Chief Judicial Magistrate Court, Manjeri, challenging acquittal of the accused in Crl.A 330 of 2006 on the file of Additional Sessions Judge (Fast Track Court No.III Adhoc), Manjeri, by which the trial court judgment of conviction and sentence under Section 138 of the Negotiable Instruments Act (for short, ‘the NI Act’) was reversed.

2. The case of the complainant was that, the accused borrowed Rs.2 lakh from him on 1/10/2004, agreeing to repay the amount within two months. When that amount was demanded back, he issued Ext.P1 cheque dated 25/1/2005, assuring that it would be honoured on presentation before the bank. But on presentation, that cheque was returned dishonoured for the reason ‘insufficient funds’. He sent registered lawyer notice to the accused on 12/2/2005, intimating dishonour of the cheque and demanding the cheque amount.

But it was returned ‘unclaimed’. Since the amount was not paid, he filed the complaint.

3. On taking cognizance and on appearance of the accused before the trial court, particulars of offence were read over and explained, to which he pleaded not guilty and claimed to be tried.

4. Thereupon, PW1 was examined, and Exts. P1 to P5 were marked.

5. On closure of prosecution evidence, accused was questioned under Section 313 of Cr.P.C. He denied all the incriminating circumstances brought on record, and stated that the complainant was a stranger to him, and he never borrowed any amount from him. His son had financial transactions with the complainant, and he had given his cheque to his son. He further stated that, his cheque as well as, cheque of his son were given to the complainant.

6. From the part of defence, Exts D1 and D2 were marked.

7. On analysing the facts and evidence, and on hearing the rival contentions from either side, the trial court found the accused guilty under Section 138 of the NI Act, and he was convicted and sentenced to undergo rigorous imprisonment for six months and to pay compensation of Rs.2 lakh, with a default sentence of six months. Aggrieved by the conviction and sentence, the accused preferred Crl.A No.330 of 2006 before Additional Sessions Judge (Fast Track Court No.III Adhoc), Manjeri. The appellate court on a reappraisal of the facts and evidence, found that the complainant could not prove that, Ext.P1 cheque was issued towards discharge of a legally enforceable debt due to him, and hence the accused was acquitted. Challenging acquittal of the accused by the appellate court, the complainant has preferred this appeal. Pending appeal, the appellant/complainant passed away. His legal heirs were impleaded as additional appellants 2 to 4.

8. Heard learned counsel for the additional appellants and learned counsel for the 1st respondent/accused.

9. Learned counsel for the appellants would contend that the accused borrowed Rs.2 lakh from the complainant on 1/10/2004, and when that amount was demanded back, Ext.P1 cheque was issued on 25/1/2005. When the cheque was presented before the bank for encashment, it was dishonoured for the reason ‘insufficient funds’. The complainant had complied with, all the legal formalities in order to bring home an offence punishable under Section 138 of NI Act. The presumptions under Sections 118 and 139 of NI Act were also available to the complainant to find that Ext.P1 cheque was issued towards discharge of a legally enforceable debt. Ignoring these facts, the appellate court acquitted the accused, and hence the impugned judgment is liable to be set aside.

10. Learned