The burden of proof for dishonour of cheque under Section 138 lies with the prosecution, and failure to establish proper service of notice leads to acquittal.

J U D G M E N T

The judgment of the trial court acquitting the accused under Section 138 of the Negotiable Instruments Act (‘NI Act’ for short) is challenged in this appeal by the complainant.

2. As per the complaint, Rs.50,000/- was due to the complainant and towards discharge of the said liability, the accused issued Exhibit P1 cheque dated 30.07.1996 and when the cheque was presented for collection, the same was dishonoured due to insufficiency of funds in the account of the accused. It is stated that in spite of issuance of statutory notice, the accused failed to pay the cheque amount to the complainant.

3. Before the trial court, from the side of the complainant, PWs 1 and 2 were examined and Exhibits P1 to P11 were marked. From the side of the accused, Exhibit D1 marked.

4. After considering the oral and documentary evidence on record and hearing both sides, the trial court acquitted the accused recording a finding that the complainant has not succeeded in establishing the ingredients of the offence under Section 138 of the NI Act against the accused.

5. Heard both sides and perused the records.

6. The learned counsel for the appellant argued that the finding of the trial court that there is no proper service of statutory notice to the accused is not legally sustainable. The learned counsel for the respondent/accused argued that the complainant has not disclosed the date of execution and issuance of the cheque in the complaint or in the chief affidavit of PW1, power of attorney holder who filed the complaint. It is argued that in the absence of prima facie evidence regarding the execution and issuance of cheque and service of statutory notice in the correct address, there is no reason to interfere with the finding of the trial court that the complainant has not succeeded in proving the ingredients of the offence under Section 138 of the NI Act.

7. A perusal of the complaint and the chief affidavit of PW1 shows that the date of execution and issuance of Exhibit P1 cheque is not disclosed. In cross examination, PW1 stated that the accused handed over the cheque to him while they were in the Police Station and at that time, the complainant was also present. According to PW1, the accused handed over the cheque on 30.07.1996.

8. However, PW1 has nothing to say when the counsel for the accused suggested that the complainant was abroad as on 30.07.1996. In another part of the cross examination, PW1 admitted that the transaction was between the complainant and the husband of the accused.

9. When the complainant is examined as PW2, he categorically admitted in cross examination that the accused has not handed over any cheque to him and that he was abroad at the time when the accused handed over the cheque to his elder brother. PW2 also admitted that he had no occasion to see the accused before.

10. The power of attorney dated 07.05.1997 executed by PW2 in favour of PW1 is marked as Exhibit D1. It is pertinent to note that PW2 has also not mentioned the date of execution and issuance of the cheque in the chief affidavit. But, in cross examination, he stated that the accused issued the cheque on 15.03.1996.

11. The learned counsel for the appellant argued that the complainant is entitled for the presumption under Section 139 of the NI Act that the cheque was issued in discharge of a debt. InKali Ram v. State of H.P. [1973 KHC 634] , a three Judge Bench of the Honourable Supreme Court held thus:

“23. ...One of the cardinal principles which has always to be kept in view in our system of administration of justice for criminal cases is that a person arraigned as an accused is presumed to be innocent unless that presumption