Compromise settlement quashed conviction under Section 138 NI Act after payment, dismissing appeals and acquitting respondent.

JUDGMENT :

M. Nirmal Kumar, J.

Read this in conjunction with and in continuation of earlier proceedings made in the previous listing on 10.02.2026, which reads as follows:

Proceedings dated 10.02.2026:

The appellant as complainant had filed a private complaint under Section 138 of Negotiable Instruments Act in S.T.C.No.779 of 2018. The trial Court by judgment dated 18.02.2020 convicted the respondent sentenced her to one year simple imprisonment and to pay cheque amount of Rs.15,00,000/- as compensation.

2.During trial complainant examined himself as P.W.1, Bank Manager Karuru Vysya Bank as P.W.2 and Central Bank Manager as P.W.3 and marked eleven documents Ex.P1 to Ex.P11. The respondent not examined any witness but marked two documents Ex.D1 and Ex.D2. Aggrieved against the conviction the respondent had preferred appeal before the Sessions Court in C.A.No.59 of 2020. The Sessions Judge by judgment dated 05.02.2021 allowed the appeal setting aside the conviction and sentence of the trial Court. Against which the present appeal is filed.

3.The gist of the complaint is that the complainant and the husband of the respondent are friends. The respondent employed as Assistant Professor in Karunya Engineering College, Coimbatore. Due to the relationship the respondent and her husband borrowed a sum of Rs.15,00,000/- from the appellant on different occasions by different mode. In the year 2016, the respondent promised to repay the loan amount within six months with interest at the rate of 12%. On repeated demand by the appellant to avoid legal action, the respondent issued a post dated cheque on 02.10.2017, in favour of the complainant drawn on Central Bank of India, Erode Branch, cheque bearing No.003082 for Rs.15,00,000/- dated 07.12.2017. After instruction, the cheque presented by the appellant in Karur Vysya Bank, Bhavani Branch, the same dishonoured and returned for the reasons funds insufficient on 08.12.2017, following the return statutory notice issued on 29.12.2017. The notice was received by the respondent on 02.01.2018. Thereafter, sent a reply notice with false averments on 19.01.2018. Ignoring the same complaint filed before the trial Court. The trial Court allowed the appeal setting aside the conviction as stated above.

4.The learned counsel for the appellant submitted that on receipt of the statutory notice Ex.P3, the respondent sent a reply Ex.P5. In the reply the respondent had taken a specific stand that the respondent has got no needs or necessity to borrow any amount at any point of time from the appellant and she is a woman of with means. Further, she disputed the signature found in the cheque Ex.P1. During cross examination of P.W.1 defence putforth by the respondent is that it was her husband who misused blank cheques by signing her name. Now respondent and her husband got separated. The respondent’s husband a vagabond without proper income to discharge his liabilities he falsely used the respondent’s cheques. The trial Court finding, further entire cross examination proceeds as though the appellant and the respondent’s husband were only having some transaction which is admitted by the appellant and to probablise the defence the respondent produced Ex.D1 challan to show that the handwriting in the challan and the cheque Ex.P1 are similar. Further, she had also produced the account opening form of Central Bank of India and the specimen signature to prove Ex.D2 that the signature found in the cheque and in the defence Exhibits are in total variance. But the trial Court finding that cheque of the respondent is not denied but takes a stand disputing her signature though the appellant had no objection for forwarding the cheque for handwriting expert, he had not sent the cheque to handwriting expert. Further, the bank witness P.W.2 confirms the cheque was returned for the reason insufficient funds and not for variance in the signature and statutory presumption under Section 118and 131 of the NI Act stands proved and the tri