THE HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJU CRIMINAL APPEAL No.342 of 2008 Date: 14.02.2011 Between : M/s Damani Shipping Pvt Ltd. … Appellant/Complainant And 1. State of A.P.rep. by Public Prosecutor & 3 others. … Respondents/Accused No.1 &3 HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL APPEAL No.342 of 2008 JUDGMENT: This appeal is filed by the complainant questioning the order of acquittal recorded by the XI Additional Chief Metropolitan Magistrate, Secunderabad in CC.No.1476 of 2004 by judgment dated 07.12.2007. The complainant filed the complaint in the lower Court against the respondents 2 to 4/A1 to A3 alleging offence punishable under Section 138 of the Negotiable Instruments Act (in short, the Act) on the ground that Exs.P3 and P6 cheques drawn by A1 company in favour of the complainant for Rs.10,00,000/- each were dishonoured by the banker for want of sufficient funds. After issuing the required statutory legal notice as per Ex.P9, the complainant filed the complaint in the lower Court within the prescribed time. A2 is described as Chief Executive and A3 is described as Director of A1 Company. In Exs.P3 and P6 cheques, both A2 and A3 were the signatories. The cheques were issued on the account of A1 Company. According to the complainant, the cheques were drawn towards the amount due by A1 Company to the complainant company. 2. The lower Court dismissed the complaint and acquitted A1 to A3 in view of subsequent settlement between the parties as per Ex.P13 memorandum of understanding dated 20.10.2004. As per Ex.P10, the accused agreed to clear outstanding amount of Rs.20,67,730/- on or before 15.01.2005 by way of eight post dated cheques drawn by the accused in favour of Indus Ind Bank, Begumpet, Hyderabad. The details of those post dated cheques are as follows: Sl.No. Cheque No. Date Cheque Amount 1. 164087 31-10-04 Rs.4,00,000/- 2. 164088 08-11-04 Rs.3,00,000/- 3. 164089 15-11-04 Rs.3,00,000/- 4. 164090 30-11-04 Rs.2,00,000/- 5. 164091 15-12-04 Rs.2,00,000/- 6. 164092 31-12-04 Rs.2,00,000/- 7. 164093 08-01-05 Rs.2,00,000/- 8. 164095 15-01-05 Rs.2,67,730/- 3. The lower Court came to the conclusion that in view of Ex.P10 memorandum of understanding, the cause of action based on dishonour of Exs.P3 and P6 cheques does not survive and is not available to the complainant or for prosecuting the accused. 4. It is contended by the appellant’s counsel that, as per Clause(2) of Ex.P10 memorandum of understanding, the complainant is at liberty to initiate the present prosecution for dishonour of Exs.P3 and P6 cheques because, one of the cheques out of the above eight post dated cheques was dishonoured. Clause(2) of Ex.A10 reads as follows: “The First Party has agreed to receive the cheques as stated above and agreed that it will not initiate legal proceedings till the end of 15th January, 2005 and the First Party is at liberty to initiate legal proceedings in case of breach or dishonour of any cheque mentioned as above.” 5. The above clause does not read that, in case, there was any breach or dishonour of any of the eight post dated cheques, the 1st party, who is the complainant, is at liberty to revive the original cause of action basing on dishonour of Exs.P3 and P6 cheques. Clause(2) of Ex.A10 reads that, the complainant is at liberty to initiate legal proceedings in case of breach or dishonour of any of the above mentioned eight cheques. In fact, the complainant had instituted criminal proceedings under Section 138 of the Act against A1 to A3 for dishonour of cheque dated 31.10.2004 bearing No.164087 drawn for Rs.4,00,000/-, by way of a separate complaint. Rights and liabilities of the parties for dishonour of that cheque dated 31.10.2004 will be decided in that criminal case and it will not revive cause of action for dishonour of Exs.P3 and P6 cheques herein. In that view of the matter, the lower Court rightly recorded acquittal in this case. 6. In fact, the complainant compounded the mater with A2 even in the lower Court and it was recorded by the lower Court itself. This appeal is now about liability of A1 to A3 only. 7. In the result, the appeal is dismissed. __________________________ SAMUDRALA GOVINDARAJULU, J Dt: 15th February, 2011 ysk HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL APPEAL No.342 of 2008 DATED:15.02.2011 ysk