Judgment 1. This Criminal Appeal is filed against the judgment dated 04.10.2004, made in C.C.No.114 of 2004, on the file of the Court of Judicial Magistrate No. III, Tirunelveli. 2. The facts leading to the filing of the present Criminal Appeal are as follows: 2.1. The appellant is the private complainant and he had filed a complaint under Sections 138 and 142 of the Negotiable Instruments Act 1881, [hereinafter referred to as 'the Act'], before the learned Judicial Magistrate No. III, Tirunelveli, which was taken on file in C.C.No.114 of 2004. 2.2. The appellant herein is M/s.Soorya Weaves, a partnership firm, represented by its one of the partners viz., S.S.Thiyagarajan. The appellant/private complainant, his wife and his three sons are the partners of the said firm. The appellant, his two sons and one of the daughter-in-laws are also the partners of the firm, namely M/s.Sun Apparels, which is also situated in the same premises as a sister concern. Both the firms are doing textile business. The accused has purchased textiles from M/s.Sun Apparels on 09.09.2003 and 22.09.2003 for a sum of Rs.2,81,797/- and Rs.1,94,525/- respectively and the accused issued two cheques dated 24.09.2003 and 29.09.2003 drawn on Tamil Nadu Mercantile Bank Limited, Udumalapet in favour of the Firm 'M/s.Soorya Weaves', which, on presentation, were returned on 12.11.2003, with an endorsement 'funds insufficient'. On 17.11.2003, a statutory notice was sent to the accused, for which, he sent a reply on 07.12.2003. Since the accused has not repaid the amount, the private complainant has filed the above said private complaint. 2.3. The Court of Judicial Magistrate No. III, Tirunelveli, on taking up the case on file, issued summons to the accused and on his appearance, he was furnished with a copy of the complaint and questioned him and he pleaded not guilty to the charges framed against him and prayed for trial of the case. 2.4. To substantiate the case, the private complainant himself was examined as P.W.1 and as many as 14 documents were produced. 2.5. The accused was questioned under Section 313(1)(b) of the Code of Criminal Procedure, 1973, with regard to the incriminating circumstances made out against him in the evidence tendered by the prosecution and he denied it as false. 2.6. On behalf of the accused, the Assistant Manager of Indian Overseas Bank, Meenakshipuram, Tirunelveli Junction was examined as D.W.1 and the accused himself was examined as D.W.2. 2.6. On behalf of the accused, the Assistant Manager of Indian Overseas Bank, Meenakshipuram, Tirunelveli Junction was examined as D.W.1 and the accused himself was examined as D.W.2. No document was marked on his side. 2.7. The defence taken by the accused was that there is no transaction between the accused and the private complainant and, therefore, the private complainant cannot prosecute for the cheques alleged to have issued to another partnership firm viz., M/s.Sun Apparels. 2.8. The learned Judicial Magistrate, after elaborate discussions and on the basis of the settled principles of various judgments, found that the private complainant had admitted that the liability was only towards 'M/s.Sun Apparels' and not towards 'M/s.Soorya Weaves' and there is no business transaction between the private complainant and the accused and, therefore, it is not a legally enforceable debt and having found that the private complainant failed to prove the ingredients of Section 138 of the Act, by giving benefit of doubt in favour of the accused, dismissed the complaint and, thereby, acquitting the accused. Aggrieved by the same, the private complainant has preferred this appeal. 3. The Court heard the submissions of the learned counsel appearing for the appellant and perused the materials available on record. 4. It is an admitted case that the private complainant M/s.Soorya Weaves and one M/s.Sun Apparels are sister concerns, doing same business viz., textile. It is also admitted that the accused was having business dealing with M/s.Sun Apparels. It is also admitted that the dishonoured cheques are issued by the accused. The point urged is that the accused had issued two cheques, Exs.P.6 and P.7 in favour of M/s.Soorya Weaves for the debt towards M/s.Sun Apparels. Exs.P.6 and P.7 are given as security only to M/s.Sun Apparels and there is no debt or liability payable to M/s.Soorya Weaves (the private complainant). 5. The learned counsel for the appellant submitted that the appellant has proved that M/s.Sun Apparels is the sister concern of the appellant Firm and the cheques have been drawn in favour of the complainant towards the legally enforceable debt of its sister concern and, therefore, it is a legally enforceable debt. The learned counsel relied on the judgment of this Court rendered in P.R. Shankar Rao v. Joseph & Joseph Regis Kalingarayar, 2001 CRI. L.J. 2392, wherein this Court has held as follows: "(D). The learned counsel relied on the judgment of this Court rendered in P.R. Shankar Rao v. Joseph & Joseph Regis Kalingarayar, 2001 CRI. L.J. 2392, wherein this Court has held as follows: "(D). Negotiable Instruments Act (26 of 1881), S.138 – 'Debt or other liability' – Also includes debt or liability due from person other than drawer. The requirement for offence to be made out under this S.138 is that the cheque must be drawn "for the discharge, in whole or in part, of any debt or other liability". This section does not say that the cheques should have been drawn for the discharges of any debt or other liability of the drawer towards the payee. Even in S.139 of the Negotiable Instruments Act, by which a legal presumption is created, the Parliament has only fixed the presumption that the cheque was issued "for the discharge, in whole or in part, or any debt or other liability". This would mean that the debt or other liability includes the due from any other person. It is not necessary that the debt or liability should be due from the drawer himself. It can be issued for the discharge of any other man's debt or liability. Legally enforceable debt or liability would have a reference to the nature of the debt or liability and not the person against whom the debt or liability can be enforced." 6. The learned counsel also relied on the judgment of the Hon'ble Supreme Court in Goa Plast (P) Ltd. v. Chico Ursulu D'Souza, 2003 (4) CTC 628 for the proposition of Section 138 of the Act. As per explanation under Section 138 of the Act, the relationship between the complainant and the accused was not at all a factor germane to the proceedings in an offence under Section 138 of the Act. 7. Before adverting to the facts of the case, it is beneficial to read Sections 138 and 139 of the Act, which read thus: "138. 7. Before adverting to the facts of the case, it is beneficial to read Sections 138 and 139 of the Act, which read thus: "138. Dishonour of cheque for insufficiency, etc., of funds in the accounts- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier. (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.- For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability." "139. Presumption in favour of the holder – It shall presume, 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." 8. Presumption in favour of the holder – It shall presume, 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." 8. In Goa Plast (P) Ltd. v. Chico Ursulu D'Souza, 2003 (4) CTC 628 (cited supra), the facts of the case would disclose that the respondent therein issued 10 post-dated cheques for a sum of Rs.40,000/- each, which, on presentation, got dishonoured and statutory notice was issued and the respondent/accused did not comply with the terms of such notice and, therefore, complaint under Section 138 r/w 142 of the Negotiable Instruments Act, 1881, came to be filed. The Trial Court has acquitted the respondent holding that the appellant/private complainant failed to prove the liability and also holding that the respondent had rebutted the statutory presumption under Section 139 of the Act and aggrieved by the order of acquittal, the private complainant preferred an appeal to the High Court of Judicature at Bombay, which also dismissed the appeal holding that the appellant had failed to prove the liability on the part of the respondent therein and challenging the same, Special Leave Petition was filed before the Honourable Supreme Court by the private complainant, which, on admission, came to be numbered as Criminal Appeal No.37 of 1995. 9. It was argued on behalf of the appellant/private complainant that mere issuance of a cheque in favour of the appellant-Company is sufficient to show that the respondent/ accused owes liabilities of the appellant-Company and it is for the accused to rebut the presumption under Section 139 of the Act. 10. The learned counsel appearing for the respondent/accused contended that no materials whatsoever have been placed before the Court to show how the respondent/accused is liable for any dues alleged to be made against him and mere presentation or delivery of the cheque, to the appellant/private complainant by the respondent/accused will not amount to acceptance of the debt or liability. 11. The Hon'ble Supreme Court of India, on the facts of the case, found that in the letter dated 12.02.1993, the respondent/accused did not deny the liability as such but merely shifted it on third person. 11. The Hon'ble Supreme Court of India, on the facts of the case, found that in the letter dated 12.02.1993, the respondent/accused did not deny the liability as such but merely shifted it on third person. In paragraph No.13 of the judgment, the Hon'ble Supreme Court held that the High Court of Bombay has failed to appreciate that on the facts of the instant case, the liability was a legally enforceable debt or liability as per the explanation to Section 138 of the Act, therefore, the relationship between the appellant and the respondent was not at all a factor germane to the proceedings for an offence under Section 138 of the Act. The Hon'ble Supreme Court of India, by assigning the said reasons, has allowed the appeal filed by the complainant. 12. In Devendra Kumar Rai v. Ram Kumar Rai & Another, 2000 (1) MWN (Cr.) DCC 96 (All.), it has been held that the law (Section 138 of the Negotiable Instruments Act) does not require that the cheque is to be issued to that person only from whom the liability was incurred and on the facts of the case, found that sum was due to the father of the complainant and the cheque was issued in the name of the complainant, namely, his son, only for discharging the debt due to his father and, therefore, by citing the reason, dismissed the quash petition filed by the accused. 13. In P.R. Shankar Rao v. Joseph & Joseph Regis Kalingarayar, 2001 Cri. L.J. 2392, the complaint has been preferred by the respondent therein against five accused. Accused No.3, namely M/s.Karthick Fisheries and Accused No.5, namely M/s.Karthick Multi Packs Pvt. Ltd., are companies and Accused No.1 is the Managing Director of Accused No.3 and one of the Directors of Accused No.5. Accused No.2 is the Director of Accused No.3 and Accused No.5. Accused No.4 is also a Director of Accused No.5. The third accused incurred debt and as the Chairman -cum- Managing Director of Accused No.5, Accused No.1 issued a cheque, which got dishonoured and after following legal formalities, private complaint was filed. It was taken cognizance by the Jurisdictional Magistrate Court and it was challenged by filing Criminal Original Petition before this Court. The learned Judge, in paragraph No.19, has held as follows: "19.Section 138 of the Negotiable Instruments Act and the explanation thereto recites as under:- "138. It was taken cognizance by the Jurisdictional Magistrate Court and it was challenged by filing Criminal Original Petition before this Court. The learned Judge, in paragraph No.19, has held as follows: "19.Section 138 of the Negotiable Instruments Act and the explanation thereto recites as under:- "138. Dishonour of cheque for insufficiency, etc., of funds in the accounts where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both: PROVIDED................ EXPLANATION: For the purpose of this section, debt or other liability "means a legally enforceable debt or other liability." The requirement for offence to be made out under this Section is that the cheque must be drawn "for the discharge, in whole or in part, of any debt other liability". This section does not say that the cheques should have been drawn for the discharges of any debt or other liability of the drawer towards the payee. Even in Section 139 of the Negotiable Instruments Act, by which a legal presumption is created, the Parliament has only fixed the presumption that the cheque was issued "for the discharge, in whole or in part, or any debt or other liability". This would mean that the debt or other liability includes the due from any other person. It is not necessary that the debt or liability should be due from the drawer himself. It can be issued for the discharge of any other man's debt or liability. Legally enforceable debt or liability would have a reference to the nature of the debt or liability and not the person against whom the debt or liability can be enforced." 14. It can be issued for the discharge of any other man's debt or liability. Legally enforceable debt or liability would have a reference to the nature of the debt or liability and not the person against whom the debt or liability can be enforced." 14. The learned Judge, in order to reach the conclusion, has also placed reliance upon a judgment rendered in K. Krishna Bai v. Arti Press, 1991 Mad LW (Cri) 513, wherein it was held that the impugned cheque issued by M/s.Mudra Graphics Private Limited account for a legally enforceable debt of M/s.Surya Advertising Private Limited would come within the purview of Section 138 of the Act. 15. The learned counsel appearing for the appellant has invited the attention of this Court to the impugned order of acquittal passed by the Trial Court and submitted that though the respondent/accused, in his evidence, would submit that he has discharged the debt due and payable to M/s.Sun Apparels and did not seriously dispute Exs.P.6 and P.7 (cheques), he has not produced any iota of materials to show that the debts due to M/s.Sun Apparels have been discharged and his contention was that the cheques given in favour of M/s.Sun Apparels have been used by the complainant namely M/s.Soorya Weaves, represented by its partner Mr.S.S.Thiagarajan and, therefore, it cannot be construed as a legally enforceable debt. 16. The name of Mr.T.M.Madasamy, learned counsel appearing for the respondent/accused is printed in the cause-list today. There is no appearance on his behalf and he has also not filed any memo withdrawing his appearance. This Court has also ordered notice to the respondent and it was returned as 'unserved'. Since the learned counsel appearing for the respondent is not appearing, this Court is left with no other option, except to dispose of this Criminal Appeal, on merits. 17. The evidence of P.W.1 would disclose that the complainant namely M/s.Soorya Weaves as well as M/s.Sun Apparels are sister concerns and the partners of both firms are one and the same and both of them are engaging the same line of business. 17. The evidence of P.W.1 would disclose that the complainant namely M/s.Soorya Weaves as well as M/s.Sun Apparels are sister concerns and the partners of both firms are one and the same and both of them are engaging the same line of business. Though it is contended before the lower Court by the respondent/accused that the cheques given as security in favour of M/s.Sun Apparels have been utilized by M/s.Soorya Weaves Private Limited, in the considered opinion of the Court, the respondent/accused has failed to dislodge the burden cast upon him for the reason that he has not produced any material to prove the discharge in respect of the debts due and payable to M/s.Sun Apparels. 18. In the light of the ratio laid down in the above cited decisions, this Court is of the considered opinion that the cheques in question have been given by the respondent/accused towards legally enforceable debt and in the light of the conclusions reached by this Court, the impugned order of acquittal warrants interference. 19. In the result, the Criminal Appeal is allowed and the impugned order of acquittal dated 04.10.2004 made in C.C.No.114 of 2004, on the file of the Court of Judicial Magistrate No. III, Tirunelveli, is set aside and the respondent/accused is directed to pay a compensation of Rs.4,76,322/- (Rupees Four Lakhs and Seventy Six Thousand and Three Hundred and Twenty Two only), within a period of six weeks from the date of receipt of a copy of this judgment, failing which, he shall undergo a default sentence of three months simple imprisonment.