C.R. Muthukumar v. R. Ranganayagi

NEGOTIABLE INSTRUMENTS ACT, 1881,

--Dishonour of cheque --Cheque in question issued as security for chit transaction No legally enforceable debt--Whether order of acquittal justified--Where accused was convicted and sentenced for an offence punishable under section 138 but the complainant failed to prove that cheque in question was issued for a legally recoverable debt or liability, then, Appellate Court had rightly acquitted the accused.--Complainant C filed a complaint against the accused alleging that her husband had borrowed a sum from him and executed a demand promissory note in favour of C. Accused issued a cheque to C for discharge of liability of her husband, but the same was dishonoured with an endorsement “account closed”. Trial Court convicted and sentenced the accused for commission of an offence under section 138. Accused filed an appeal on the ground that the cheque in question was given towards security for the chit transaction. Further, the promissory note was a blank promissory note that was misused by C. Appellate Court acquitted the accused. Therefore, C filed an appeal against the order. Held: It was found that the promissory note that was given to C was a blank promissory note and was signed by one witness. However, C had not examined the said witness to substantiate his case. Further, the cheque in question was given to C as a security for the chit transaction, which was established by preponderance of probabilities. C had failed to prove that cheque in question was issued towards a discharge of debt taken by the accused and her husband. Hence, Appellate Court had rightly acquitted the accused.