Judgment :- (Criminal Appeal has been preferred against the order made in C.C.NO.3845 of 1996 on the file of the VII Metropolitan Magistratre, Geroge Town, Chennai.) This Criminal Appeal has been filed against the order of acquittal of the accused, who was prosecuted for the offence under Section 138 of the Negotiable Instruments Act. 2. The brief facts of the case are as follows:- (a) The appellant has filed a private complaint against the accused for an offence punishable under Section 138 of the Negotiable Instruments Act. The first accused is the Proprietrix of Lavanya Associates and the second accused her husband is an authorised signatory of Lavanya Associates. The appellant/complainant is Government of India Company, incorporated under the Companies Act. The appellant has its regional office at Chennai. There was a memorandum of understanding between the first accused and the complainant, according to which, the complainant gave financial assistance for the export-business of A1. The memorandum of agreement is Ex D1. In pursuance of such understanding, there were financial transactions between the complainant and the accused. On 31.3.2006, the second accused, on behalf of the first accused issued cheque NO.588399 for Rs.35,00,000/- drawn on Bank of India, Purasaiwakkam, Chennai towards partial discharge of the debts due by the first accused. The said cheque is Ex P2. The said cheque was signed by the second accused as authorised signatory of the first accused. On 2.4.2006, the said cheque was presented for collection through their bank, namely, Indian Overseas Bank, Esplanade Branch, Chennai for collection. On 3.4.2006, the subject matter of the cheque was returned to the accused for the reason "insufficient funds" vide their memo under Ex.P.3. On 13.4.1996, the complainant issued a statutory notice Ex. P.4, which was received by the respondents/accused on 16.4.1996 vide Ex. P5. On 27.4.1996, the accused sent a reply and pleaded time for settlement, wherein it is stated that the cheque was presented as security but admitted the liability. Since the accused did not make any payment for the returned cheque, the complainant preferred C.C.No.3845 of 1996 on the file of VII Metropolitan Magistrate, George Town, Chennai against the accused. (b) Before the learned Metropolitan Magistrate-VII, George Town, Chennai, on behalf of the complainant, PWs 1 and 2 were examined and Exs.P.1 to P.8 were marked. On behalf of the accused no witness was examined, but Ex D1 was marked. (b) Before the learned Metropolitan Magistrate-VII, George Town, Chennai, on behalf of the complainant, PWs 1 and 2 were examined and Exs.P.1 to P.8 were marked. On behalf of the accused no witness was examined, but Ex D1 was marked. (c) When the accused was questioned under Section 313 Cr.P.C. with regard to the incriminating circumstances appearing in the evidence of the prosecution witnesses, the accused denied the same as false. On considering the oral and documentary evidence, the learned Metropolitan Magistrate-VII, George Town, Chennai came to the conclusion that the offence alleged against accused is not proved on the ground that the complainant has not proved the liability of the accused and that there is no consideration for the subject matter of the cheque and therefore, acquitted the accused. Aggrieved over the said order of acquittal, this Criminal Appeal has been filed. 3. Mr.Ravi. learned counsel appearing for the appellant would contend that the first accused issued the subject matter of the cheque ExP2 which was signed by the second accused, who is the authorised signatory on behalf of the first accused and therefore the presumption under Section 138 of Negotiable Instruments Act can be drawn in favour of the holder of the cheque, subject to three conditions, namely, relating to the presentation of cheque , service of notice and non payment of amount by the drawer after receipt of notice. The learned counsel appearing for the appellant relying on the following Supreme Court decision reported in Hitten P.Datal -vs- Bratindranath Banerjee(2001 (3) CTC 243) wherein it has been held as follows: " That the four cheques were executed by the appellant in favour of the Standard Chartered Bank(hereafter referred to as the Bank), has not been denied nor was it in dispute that the cheques were dishonoured because of insufficient funds in the Appellant's account with the drawee, viz., Andhra Bank. Because of the admitted execution of the four cheques by the appellant, the Bank was entitled to and did in fact rely upon three presumptions in support of its case, namely, under Sections 118,138 and 139 of the Negotiable Act. Section 118 provides, inter-alia, that until the contrary is proved it shall be presumed that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration. Section 118 provides, inter-alia, that until the contrary is proved it shall be presumed that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration. The presumption which arises under Section 138 provides more specifically that where any cheque drawn by a person on an account for payment of any amount of money for the discharge in whole, or in part of any debt or other liability, is returned by the drawee bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque, such persons shall be deemed to have committed an offence and shall be punished with imprisonment for a term which may extend to twice the amount of the cheque, or with both. The nature of the presumption under Section 138 is subject to the three conditions specified relating to presentation, giving of the notice and the non payment after receipt of notice by the drawer of the cheque. All three conditions have not been denied in this case. The appellant's submission that the cheques were not drawn for the’ discharge in whole or in part of any debt or other liability' is answered by the third presumption available to the Bank under Section 139 of the Negotiable Instruments Act. This section provides that” it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability". The effect of these presumptions is to place the evidential burden on the appellant of proving that the cheque was not received by the Bank towards the discharge of any liability. Because both Sections 138 and 139 require that the Court “shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras -vs- A.Vaidyanatha Iyer AIR 1958 SC 61 , it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. "It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused (ibid). Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the Court “may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the letter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non existence of the presumed fact." 4. The learned counsel appearing for the appellant also relied on a decision reported in Goa Plast (P) Ltd-vs- Chico Ursula D'Souza (2005 M.L.J., (crl.)26) in support of his contention, wherein it has been held that once a cheque is issued, it has to be presumed that it is issued in discharge of a debt or liability and the burden of proof is on the person who wants to rebut the presumption. “para 22.. . . . . . it has to be presumed that a cheque is issued in discharge of any debt or other liability. The presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. 5. In the instant case, the accused has not examined any witness or chosen to enter into the box in support of his version. The cheque was issued as security. Once the cheque was issued, the burden is on the drawer to prove that no consideration is based on the cheque. In Ex P8 reply notice, the accused has pleaded further time for settlement, which would show that there is liability on the part of the accused. Further, in Ex D1 memorandum of understanding, the accused has sought for financial assistance, both for expansion of their quarry and for the purchase of machinery. The reason of not proving the liability as held by the trial Court is not sustainable, in view of the fact that the complainant has given financial assistance availed by the accused and in pursuance of such assistance, the accused knowingly given the subject matter of the cheque. The reason of not proving the liability as held by the trial Court is not sustainable, in view of the fact that the complainant has given financial assistance availed by the accused and in pursuance of such assistance, the accused knowingly given the subject matter of the cheque. Therefore, the liability of the accused is very much proved by the complainant. The acquittal of the accused by the learned Metropolitan Magistrate No.VII is not sustainable in law and therefore, the accused are liable to be convicted. 6. For the above stated reasons, the offence alleged under Section 138 of the Negotiable Instruments Act is proved and the accused are liable to be convicted. For question of sentence, post on 11.9.2006 on which date, the accused shall appear before this Court.