Cheque dishonour acquittal upheld as complainant filled blank cheque beyond accused's actual liability under Section 138

Kerala HC dismissed appeal challenging acquittal in cheque dishonour case under Section 138 NI Act. Court held that while complainant held cheque with legal presumption under Section 118(g), evidence showed accused's liability was only Rs. 30,000 against cheque amount of Rs. 1,30,000. Complainant failed to produce agreement proving higher settlement amount. Court found blank cheque was improperly filled beyond actual liability undertaken by accused for husband's debt. Presumption under Section 139 could not attach to blank cheque filled beyond agreed amount. Acquittal confirmed.

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Issues:
Challenge to the order of acquittal under Section 138 of the Negotiable Instruments Act.

Analysis:
The appellant challenged the order of acquittal in a case involving a complaint under Section 138 of the Negotiable Instruments Act. The complainant alleged that the accused, who was the wife of his friend, borrowed an amount from him and issued a cheque which was dishonored. The accused denied the financial transaction and contended that the loan was between the complainant and her husband. The court below acquitted the accused based on the failure of the complainant to prove the financial transaction with the accused. The appellant argued that even if the transaction was between the complainant and the accused's husband, the accused could still be held liable under Section 138. The appellant cited legal precedents to support the position that the presumption of consideration under Section 139 attaches to the cheque once delivery is proven.

On re-evaluation of the evidence, the court found that the debt giving rise to the cheque was between the complainant and the accused's husband. While the accused delivered the cheque to the complainant, the evidence did not establish her borrowing from the complainant. The court emphasized the significance of delivery of the cheque for liability to be imposed on the drawer. The court found that the accused issued the cheque as a guarantor for her husband's debt, which still falls under Section 138 of the Act. The court highlighted that the payee of a cheque need not have a direct transaction with the drawer, and the accused could be prosecuted under Section 138.

The court considered the evidence regarding the settlement amount and the lack of proof of the actual debt amount settled. It was inferred that the liability of the accused's husband to the complainant was much lesser than the amount on the cheque. The court concluded that the accused was entitled to the benefit of reasonable doubt and was not guilty under Section 138. The order of acquittal was upheld, as it was not found to be perverse or absurd. The appeal was dismissed, confirming the acquittal of the accused.

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