THE HON’BLE SRI JUSTICE G.BHAVANI PRASAD CRIMINAL APPEAL No.790 OF 2005 Dated:24.11.2009 Between: R.Kasinath .. Appellant And A.Ramulu and another .. Respondents JUDGMENT: The acquittal of the accused in C.C.No.29 of 1999 on the file of the X Metropolitan Magistrate, Secunderabad by the judgment, dated 01.08.2003 led the unsuccessful complainant to file the present appeal. The complaint alleging committal of an offence under Section 138 of the Negotiable Instruments Act by the respondent/accused was on the ground that the accused borrowed Rs.50,000/- from the appellant/complainant in 1996 promising to repay the same within three or four months and subsequently issued two cheques for Rs.25,000/- each on 10.11.1998 and when the same were presented, they were dishonoured, due to insufficiency of funds. The complaint was taken on file by the trial Court after recording the sworn statement of the appellant and the accused was furnished with the copies of the documents on entering his appearance. When examined under Section 251 Cr.P.C., the accused denied the offence and during trial, the complainant examined himself as PW.1 and marked Exs.P1 to P7, while the accused apart from denying the incriminating circumstances appearing in the evidence against him, examined himself as DW.1 and marked Exs.D1 and D2. The trial Court rendered the impugned judgment referring extensively to the oral and documentary evidence of the parties and noting that in answer to the allegation of the appellant about lending Rs.50,000/- towards which the two subject cheques were issued and dishonoured, the accused contended that he deposited four cheques for Rs.25,000/- each with the complainant with whom he had a running account, out of which, the complainant encashed two cheques. It was also the case of the accused that as he repaid the entire amount, he demanded to return the remaining two cheques, but they were not so returned. The trial Court further observed that there was no dispute that the complaint was filed within the period of limitation from the statutory notice and also noted that accused was silent without giving any reply to the statutory notice issued by the complainant and the same is a circumstance that may strengthen the case of the complainant with reference to the principle laid down in Waterbase Limited V. K.Ravindra and another[1]. However, the trial Court proceeded to consider whether the accused rebutted the statutory presumption under Section 139 of the Negotiable Instruments Act and observed that the other cheques were encashed on 15.07.1992 and 24.07.1992 and the subject cheques also might have been received by the complainant in 1992 itself in connection with the running account which the accused had with him and could have been presented for encashment at the relevant time. The contention of the complainant that accused was in the habit of keeping aside some leaves in his cheque book was not considered acceptable and apart from other circumstances which the trial Court referred to as making the claim of the complainant about the loan not convincing, the trial Court primarily relied on the encashment of the cheques subsequent to Exs.P1 and P2 in 1992 itself, as a strong circumstance to believe the version of the accused that Exs.P1 and P2 were not issued in discharge of a legally enforceable debt, but were deposited with the complainant in 1992 as security. Consequently, giving the benefit of reasonable doubt to the accused, the trial Court acquitted him. The grievance of the appellant is that the silence of the accused to the statutory notice was ignored and that the accused had to establish that the cheques were not issued in discharge of any legally enforceable debt or liability rebutting the statutory presumption under Section 139 of the Negotiable Instruments Act. Exs.D1 and D2 could not have been accepted and the contradictory defence of the accused could not have been upheld and, hence, the complainant desired the judgment of the trial Court to be reversed. Heard the learned counsel for the parties. The point for consideration is whether the appellant had proved the guilt of the accused for an offence punishable under Section 138 of the Negotiable Instruments Act beyond reasonable doubt? POINT:- Sri K. Suresh Reddy, learned counsel for the appellant firstly referred to I.C.D.S. Ltd., V. Beena Shabeer and another[2] wherein the husband stood as a guarantor for his wife in respect of a hire purchase transaction and issued the subject cheque towards part payment which was dishonoured due to insufficiency of funds. The Apex Court was laying down that the co-extensive liability of the guarantor and the principal debtor is totally out of the purview of Section1 138 of the Negotiable Instruments Act and the true intent and purport of the provision depends on the two key expressions ‘any cheque’ and ‘other liability’. It was held that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability, there cannot be any restriction or embargo in the matter of application of the provisions of Section 138 of the Negotiable Instruments Act. Thus, the cheque in question before the Apex Court was issued towards part payment of a legally enforceable debt/liability by the husband and hence the question whether he was only the guarantor and not the principal debtor was not a question germane to determine his liability under the provision. In the present case, the defence is that the cheques were not issued towards payment or part payment of the alleged debt in question, but were kept as security with the complainant as long back as 1992 in connection with a running account which the accused had with the complainant. Similarly, Charminar Co-operative Urban Bank Ltd., Hyderabad V. Chaitanya Kala Samithi, Hyderabad and others[3] relied on by the learned counsel for the appellant is also distinguishable. In that case, dealing with the contention, whether the cheque in question was given as a security, the learned Judge concluded that 35 cheques were given with dates representing the monthly payments to be made as per the terms of agreement and the cheques were obviously issued to enable the bank to adjust 35 instalments from the amount lying to the credit of the current account of the accused instead of the accused directly paying the amount. Consequently, the learned Judge refused to interpret that the cheques were given as security. The learned Judge in consequence distinguished the decision reported in Laxminivas Agarwal V. Andhra Semi Conductors Pvt. Ltd., Hyderabad and others[4] where a finding was given that undated cheques were issued as security for payment and not for discharge of a debt or other liability and the blanks which were filled up subsequently will not result in attracting the criminal liability. In the present case, the subject cheques, as already stated, were claimed to have been issued towards repayment of the loan, according to the complainant, while they were deposited as a security and were not issued towards any repayment of any loan, according to the accused. The trial Court with its experience and wisdom and with reference to the ordinary and natural course of human conduct in such circumstances and concerning such transactions, had opined that the cheques appeared to have been issued towards security and not towards part payment. Though, the silence of the accused on receiving the statutory notice is a circumstance unfavourable to him and though he had the burden of rebutting the statutory presumption under Section 139 of the Negotiable Instruments Act in view of the admitted signatures on the cheques which bounced, the probablised circumstances were considered by the trial Court to have resulted in rebuttal of the adverse factors against the accused. The admitted fact that cheques anterior or posterior to the subject two cheques were encashed in 1992 itself is undoubtedly a strong circumstance to create a reasonable doubt in the mind of the Court that the cheques could have been retained with the complainant for more than six years only as security and not as having been issued towards part payment of any debt. Interference with a judgment of acquittal requires very strong and unwavering circumstances pointing to the guilt of the accused alone and the element of reasonable doubt, the benefit of which has to be given to the accused on the material placed before the trial Court, makes any interference with the impugned judgment not appropriate in this appeal. Consequently, the appeal has to fail. In the result, the Criminal Appeal is dismissed. ___________________ G. BHAVANI PRASAD, J 24th November 2009 KH [1] 2002 (1) A.L.D. (Crl.) 689 [2] 2002 (2) A.L.D. (Crl.) 481 (S.C.) [3] 2007 (2) A.L.D. (Crl.) 498 (A.P.) [4] 2006 (1) A.L.D. (Crl.) 300 (A.P.)