THE HON’BLE SRI JUSTICE K.C.BHANU CRIMINAL APPEAL NO.431 OF 2002. DATED:22-09-2009. Between: Bandi Shubash … Appellant and 1.State of A.P. represented by Public Prosecutor, High Court of A.P., Hyderabad and two others …Respondents THE HON’BLE SRI JUSTICE K.C.BHANU CRIMINAL APPEAL NO.431 OF 2002. JUDGMENT: This Criminal Appeal is directed against the judgment, dated 16-08-2001, in C.C.No.51 of 2000 on the file of the Special Judicial Magistrate of I Class for PCR Cases, Warangal, whereunder whereby respondents 2 and 3-accused were acquitted of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘the Act’) 2. Brief facts of the case are that complainant and A1 and A2 used to run cine business under the name and style of ‘Siva Ranjani Creations’. Complainant given up his business and the accused settled all accounts and issued a cheque for Rs.5,00,000/- for the settled account duly signed by them. When the cheque was presented in the bank for encashment, it was returned with an endorsement ‘insufficient funds’. The complainant got issued legal notice on 25-02-1999 calling upon the accused to pay the amount. In spite of service of notice, the accused did not pay the amount. Hence, the complaint. 3. When the accused were examined under Section 251 Cr.P.C. for the offence punishable under Section 138 of the Act, they denied the offence, pleaded not guilty and claimed to be tried. 4. To substantiate the case, the complainant examined P.Ws. 1 and 2 and got marked Exs.P1 to P7. On behalf of the accused, D.W.1 was examined and Exs.D1 to D8 were marked. 5. The trial Court after considering the evidence on record found the accused not guilty of the offence punishable under Section 138 of the Act and accordingly, acquitted them. Hence, this appeal. 6. Now the point for determination in this appeal is whether the complainant proved the case against the accused beyond all reasonable doubt of the offence punishable under Section 138 of the Act and whether the judgment of the trial Court is correct, legal and proper? 7. Learned counsel appearing for the appellant contended that the trial Court disbelieved the evidence of P.W.1 on the ground that he has no capacity to lend Rs.9,00,000/-, that issuance of cheque has been admitted by the accused and therefore, presumption under Section 139 of the Act can be drawn and hence, he prays to convict the accused. 8. On the other hand, learned counsel appearing for the accused contended that initial burden lies on the complainant to establish that the cheque in question was given for legally enforceable debt or liability, that according to the evidence of P.W.1, he invested Rs.9,00,000/- in Siva Ranjani Creations and in pursuance of the settlement among the partners, the cheque in question was given, but the 1st accused who was examined as D.W.1 deposed that the complainant was not at all a partner and that partnership deed was filed to show that the complainant was not a partner in Siva Ranjani Creations and hence, he prays to dismiss the appeal. 9. To constitute an offence incorporated in the main enacting clause of Section 138 of the Negotiable Instruments Act, the following three conditions have to be established: “ a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier. b) The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque (within thirty days) of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.” 10. There cannot be any dispute that the accused is presumed to be innocent unless contrary is proved. The presumption of innocence is further strengthened by an order of acquittal. Unless the findings are shown to be not based upon proper appreciation of evidence on record or inadmissible evidence was taken into consideration or admissible evidence was overlooked, normally this Court will not interfere with the same. There cannot be any dispute that the initial burden stands on the complainant has to be discharged even for the offence punishable under Section 138 of the Act. Mere admitting the issuance of cheque does not lead to an irresistible conclusion that it was given for legally enforceable debt or liability. It must be proved as a fact like that of any other fact. 11. The evidence of P.W.1 would go to show that he invested Rs.9,00,000/- in Siva Ranjani Creations and became a partner and in pursuance of settlement of account in the partnership firm, the accused issued Ex.P1-cheque. Therefore, the contention of the complainant is that after investing Rs.9,00,000/- he became a partner in Siva Ranjani Creations. Except the oral testimony of P.W.1, there is no other evidence to substantiate the plea. No doubt, the oral testimony can be accepted provided there is no other documentary evidence available on record and the evidence of P.W.1 can be put in the category of wholly reliable. The accused on the other hand produced Ex.D1-partnership deed, which contain the names of the partners. The complainant does not know when he became a partner, when he paid Rs.9,00,000/- and when the settlement was arrived at among the partners resolving the rights and liabilities of the partners. The accused also produced Ex.D4-agreement dated 03-02-1992, which shows that there was no such understanding between the partners that the accused have to pay Rs.9,00,000/- to the complainant. In view of the documentary evidence produced by the accused, which would clearly reveal that there was no settlement of account between the accused and the complainant and that the complainant was not a partner in the firm itself, question of accused issuing cheque in pursuance of settlement arrived at between the parties admitting to pay certain amount towards discharge of liability, may not arise. The source of deposit made by P.W.1 in Siva Ranjani Creations may not be a relevant factor, but at the same time the relevant fact is that there was a settlement among the partners with regard to their liabilities and rights. That settlement has not been filed by the complainant. On the other hand, the settlement arrived at between the parties was marked on behalf of the accused, which did not disclose about the accused liability to pay the amount to the complainant in pursuance of the settlement. Capacity of the complainant to invest the amount is not relevant, but it must be shown that he invested Rs.9,00,000/- in the firm. Admittedly, the complainant is an income tax assessee. He has not shown in the income tax returns about his investment of amount in Siva Ranjani Creations. The initial burden placed on the complainant has not been discharged and therefore, presumption under Section 139 of the Act cannot be drawn in this case. The trial Court after elaborate consideration of evidence on record, rightly acquitted the accused and absolutely, there are no grounds to interfere with the same. 12. Accordingly, the Criminal Appeal is dismissed confirming the judgment, dated 16-08-2001, in C.C.No.51 of 2000 on the file of the Special Judicial Magistrate of I Class for PCR Cases, Warangal --------------------- K.C.BHANU, J DATED:22-09-2009 Hsd