2006 (5) TMI 561 - HC - Indian Laws

Summary

Issues: Acquittal under Section 138 of the N.I. Act

Analysis:
1. The appellant challenged the respondent's acquittal under Section 138 of the N.I. Act. The respondent, a dealer in household articles, issued a post-dated cheque to the complainant, which bounced upon presentation. The complainant alleged non-payment and initiated prosecution. The respondent claimed the cheque was for mixies ordered but not supplied by the complainant, thus no liability existed. The lower court found the cheque was not issued to discharge any existing liability towards the complainant.

2. The appellant argued that the respondent had admitted liability towards the complainant in communications, indicating a subsisting liability at the time of cheque presentation. Despite the cheque being for mixies ordered, the appellant contended it was towards the existing liability. The order for mixies, cheque issuance, and subsequent stop memo by the respondent were analyzed to establish the absence of liability towards the complainant for the cheque amount.

3. The order placed by the respondent for mixies and the post-dated cheque were scrutinized. The stop memo issued by the respondent to the bank before the cheque date, indicating non-supply of ordered items, was considered. Communications between the parties suggested a general settlement of accounts, but the specific amount due was not proven by the complainant. The crucial aspect was determining if the cheque amount corresponded to the liability, as required by Section 138. The court concluded that the cheque was not issued to discharge the liability covered by it, as it was for unsupplied mixies, leading to the respondent's acquittal being upheld.

Conclusion:
The appeal challenging the respondent's acquittal under Section 138 of the N.I. Act was dismissed, as the evidence did not establish the cheque was issued to discharge the existing liability towards the complainant.