Cheque dishonour liability upheld where one transaction supported a single complaint and acknowledgment proved enforceable debt.

Cheques issued as part of the same underlying loan transaction may be proceeded against in a single complaint, even where one cheque is drawn on the company's account and others on the managing director's personal account, because the drawer's role and the common transaction permit joint trial. The court also held that a settlement letter acknowledging cancellation of earlier arrangements and confirming outstanding liability proved a legally enforceable debt, and that dishonour, timely demand notice, and non-payment attracted section 138 of the Negotiable Instruments Act, 1881. The acquittal was reversed, and conviction with compensation and fine was directed.

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Issues: (i) Whether a single complaint was maintainable in respect of a cheque issued on behalf of the company and two cheques drawn on the personal account of the managing director; (ii) Whether the complainant failed to prove the existence of a legally enforceable debt.

Issue (i): Whether a single complaint was maintainable in respect of a cheque issued on behalf of the company and two cheques drawn on the personal account of the managing director.

Analysis: The cheques were issued in relation to the same underlying loan liability of the company. The drawer of the cheque is the relevant person for the offence under section 138 of the Negotiable Instruments Act, 1881, and the accused acted in a dual capacity as managing director and as an individual drawer. The court applied the concept of same transaction, relying on the statutory scheme governing summary trial and joint trial, and held that cheques issued as part of one transaction can be tried together.

Conclusion: The single complaint was maintainable and the issue was answered in favour of the complainant.

Issue (ii): Whether the complainant failed to prove the existence of a legally enforceable debt.

Analysis: The documentary evidence, especially the settlement letter acknowledging cancellation of earlier arrangements and confirming the outstanding liability, outweighed the defence version based on alleged change in management. The court found that the material relied on by the accused did not displace the effect of the acknowledgment and the issuance of the cheques towards the subsisting liability. The dishonour of the cheques, the timely demand notice, and the failure to make payment attracted the penal consequences under section 138 of the Negotiable Instruments Act, 1881.

Conclusion: The existence of a legally enforceable debt was proved and the contrary finding of the Magistrate was set aside.

Final Conclusion: The acquittal was reversed, liability under the cheque dishonour provisions was affirmed, and conviction with compensation and fine was directed.

Ratio Decidendi: Cheques issued as part of the same underlying transaction may be proceeded against in one complaint, and an acknowledgment of outstanding liability can establish the enforceable debt necessary for conviction under section 138 of the Negotiable Instruments Act, 1881.

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