JUDGMENT
1. This is an appeal filed by the complainant in C.C. No. 286/91 on the file of XI Metropolitan Magistrate, Secunderabad acquitting respondents 1 and 2 of offence under Section 138 of the Negotiable Instruments Act.
2. The case of the appellant as disclosed from the complaint filed by him is in brief as follows :
The respondents 1 and 2 borrowed a sum of Rs. 1,00,000/- from the appellant for purpose of their business, promising to repay the same within a short time. Respondents 1 and 2 became liable in a sum of Rs. 1,18,337/- in respect of the said transaction and issued a cheque drawn on ‘Karur Vysya Bank, Rastrapathi Road, Secunderabad for the said amount with an understanding to present the said cheque on 15-1-91.
3. The appellant-complainant presented said the cheque on 15-1-91, but it was returned for want of sufficient funds. The appellant then contacted the respondents on telephone and demanded for payment of the amount for which the cheque was issued. Then the respondents promised to arrange for payment in a short time. So, the appellant waited for two months and again presented the cheque for encashment on 19-3-91, but it was again returned for want of sufficient funds. The Appellant then sent a notice Dt. 27-3-91 calling upon the respondents to pay the amount within 15 days and threatening to prefer a complaint in the event of their failure to pay the amount within that time. The said notice was received by the respondents-accused and a reply was sent on 11-4-91 raising some pleas which are extraneous and irrelevant and admitting the liability. Hence, the complaint for offence under section 138 of the Negotiable Instruments Act (hereinafter referred to as ‘the Act’).
4. During trial, the appellant-complainant examined himself as P.W. 1. Both the accused examined themselves as D.Ws 1 and 2 and in addition to that some documents were marked on either side. From the evidence adduced during trial, it is clear that the transaction in respect of which the complaint is filed had taken place under the following circumstances : The first accused is a partnership firm. The second respondent and his son who represents the partnership firm are partners of the firm. The firm was carrying on business in chemicals. Respondents 1 and 2 approached the appellant for a loan and the appellant agreed to advance loan and gave a cheque for Rs. 96,500/- drawn by “Balaji Mahadev Male” in favour of the respondents. Respondents 1 and 2 executed a pronote for Rs. 1,00,000/- in favour of the appellant agreeing to repay the same with interest at 20% per annum. At that lime, the complainant got an account opened in the name of the respondents in Karur Vysya Bank and the cheque for Rs. 96,500/- was adjusted towards that account. It was stipulated that, respondents 1 and 2 should pay interest every month to the appellant-complainant. The appellant also took a blank signed cheque from respondents 1 and 2 as security for payment of interest every month. It was understood that if the respondents fail to pay interest as stipulated, the appellant can present the cheque in the Bank for the amount due by that date under the pronote. The respondents paid the interest of Rs. 1,667/- every month for about 8 months. Thereafter, they stopped payment. By 15-1-91 a sum of Rs. 18,337/- was due from the respondents towards interest. So, the appellant-complainant filled up the blanks in the cheque as if it was issued for a sum of Rs. 1,18,337/- being the total amount due under the pronote after giving credit to the payment already made and presented the cheque for encashment. It was returned stating that there was no sufficient funds. Two months later, it was again presented. Again, it was returned with a similar endorsement. Then the appellant gave a notice to respondents demanding payment of the amount within 15 days and threatening to file a complaint in the event of their failure to pay the amount within that time. Ex. P-4 is the notice and the respondents sent a reply admitting the liability and requesting time for payment and requiring the appellant to convey the flat which they had purchased from him so that they could mortgage the same and raise funds for discharge of the debt. On the basis of this evidence, the learned Magistrate came to the conclusion that the evidence does not go to establish an offence under section 138 of the Act and acquitted the accused. The acquittal was on the following grounds :
1) The complainant is not the person who lent the money for discharge of which the cheque was issued. So, it can’t be said that the respondents had given the cheque to the complainant for discharge of debt on liability due to the complainant. The leanred Magistrate held that there was no legally enforceable debt or liability against the respondents in favour of the appellant-complainant so as to attract the provisions of section 138 of the Act.
2) The second ground was that the cheque was drawn in the month of July, 1989 and that therefore, the said cheque was presented beyond six months from the date on which it was drawn and that therefore, the provisions of section 138 of the Negotiable Instruments Act apply as mentioned in proviso (a) to section 138.
3) The other ground was that the cheque when issued did not contain the date, the name of the payee and amount for which it was drawn and it was only a blank cheque containing the signature of the respondents and that therefore, it is not a valid cheque as envisaged under section 138 of the Negotiable Instruments Act.
5. For the above reasons the learned Magistrate found that an offence under section 138 of the Act is not made out and consequently acquitted the accused. It is against that judgment, the complainant had filed this appeal.
6. In an appeal from acquittal, the High Court can review the entire evidence upon which the order of acquittal was founded and come to its own conclusion. The Supreme Court has held that though the High Court has power of review of the evidence to reverse an order of acquittal, yet, in doing so, it should not only consider the matters on record including the reasons given by the trial court in respect of the order of acquittal but should particularly consider those aspects which are in favour of accused. I will first consider whether the reasons given for acquittal by the Magistrate are sustainable. The consideration for the pronote executed by the respondents was the amount which they received by way of cheque issued by ‘Balaji Mahadev Male’ for Rs. 96,500/-. It was the complainant that got the cheque issued in favour of respondents. So, it cannot be said that the pronote is not supported by consideration or that there is no debt or legal liability binding the respondents. The consideration for the pronote in favour of the complainant was provided by ‘Balaji Mahadev Male’ at the instance of the complainant only. The respondents are not answerable to Balaji Mahadev Male. So, the Magistrate erred in holding that the cheque was not issued for discharge of any debt or liability. It was certainly issued for discharge of the debt due under the pronote that the cheque was issued.
7. The other ground is that the cheque was drawn some time in the month of July, 1989 and it was presented in the month of March, 1991, i.e. beyond the period of six months from the date on which it was drawn and that, therefore, the provisions of Section 138 do not apply in view of proviso (a) to that section. Now, it is settled that the date, which the cheque bears should be treated as the date on which it was drawn. In the instant case, the cheque bears the date 15-1-1991 and as the same was presented in the month of March, 1991, it cannot be said that the cheque was presented beyond the period as envisaged under section 138 of the Act.
8. The third ground on which the Magistrate acquitted the accused was that the cheque did not contain date the name of the payee and the amount for which the cheque is issued at the time when it was delivered to the complainant and that, therefore, it cannot be considered as a cheque attracting the provisions of cheque. The fact that it did not bear date, the amount for which it was issued and the name of the payee when it was delivered to the complainant, is not disputed.
9. It was contended by the learned counsel for the appellant that a post dated cheque is valid and that it can be treated as ‘bill of exchange’ till the date shown on the cheque and thereafter, it becomes a cheque. But, in the instant case, except the signature the other columns in the cheque were blank. Therefore, it cannot be said that it was a ‘bill of exchange’ prior to 15-1-91 or when it was delivered.
10. Section 138 of the Act is introduced with a view to avoid the malignant trade practice of indiscriminately issuing cheques without sufficient funds. The amendment is introduced with a view to curb instances of issuing such cheques indiscriminately. So, having regard to the purpose with which this provision is introduced, it is doubtful whether a case of this nature can be construed as attracting the provisions of section 138 of the Act. In the instant case, the appellant advanced some money to the respondents and obtained a pronote. It was stipulated that the respondents should pay interest every month. At the same time appellant-creditor took a blank signed cheques from the respondents with the understanding that the complainant could fill the other columns in the cheque and present it if the respondents committed default in payment of interest. The respondents paid interest for about 8 months and thereafter stopped payment of interest. Then the appellant put the date as 15-1-91, wrote his own name in the space intended for the payee and also mentioned amount as Rs. 1,18,337/- and presented the cheque. Even at the time when he presented the cheque, he would not have expected that the cheque would be honoured. He was presenting the cheque only with a view to get an endorsement which would enable him to proceed under section 138 of the Act. If this sort of practice is allowed, every Creditor should abuse the provisions of section 138 of the Act by obtaining blank cheques and putting the debtors in the fear of presentation insist on discharge of the debts at any time. I do not think that would have been the intention of the Legislature while incorporating section 138 in the Negotiation Instruments Act. Though, the appellant did not state the circumstances under which he obtained the Pronote and the cheque in his complaint yet it is clear from the evidence the circumstances under which the complainant obtained a signed blank cheque from the respondent. So, the appellant has obtained this blank signed cheque with a view to make use of it, as a threat to the respondents for realisation of the amount. So, it cannot be construed that the respondent had issued the cheque voluntarily for discharge of any debt or legal liability as envisaged under section 138. I, therefore, find that the facts and circumstances of the case are not attracted by the provisions of section 138 of the Act and that the learned Magistrate was justified in acquitting the accused. Hence, the Criminal Appeal is dismissed.
11. Appeal dismissed.