ORDER : This revision is at the instance of the accused in C.C. No.617 of 2000 on the file of Judicial First Class Magistrate’s Court, Kuthuparamba, assailing the judgment in Crl. Appeal No.141 of 2004 on the file of Additional Sessions Judge (Adhoc-III), Thalassery, which upheld his conviction under Section 138 of the Negotiable Instruments Act (hereinafter referred as ‘the NI Act’), though the sentence was modified and reduced. 2. C.C. No. 617 of 2000 was based on a complaint filed by the 1st respondent herein, against the revision petitioner, alleging an offence punishable under Section 138 of the NI Act. The case of the 1st respondent/complainant was that, there was financial transaction between herself and the revision petitioner regarding purchase of KL-13A-2898 bus, owned by the revision petitioner and Ext.D1 agreement dated 16.09.1999 will prove that transaction. But, the revision petitioner could not transfer the bus into her name, as agreed. So, they executed Ext.P7 agreement on 26.10.1999, whereby, the revision petitioner agreed to repay Rs.84,000/-received by him, from the 1st respondent/complainant, along with 6% interest, amounting to Rs.90,000/-in total. Out of this amount, Rs.40,000/-was paid by the revision petitioner on 26.10.1999 itself, and for the balance Rs.50,000/-, he issued cheque bearing No. 900184 dated 30.11.1999 drawn on Syndicate Bank, Mambaram Branch, and another cheque for Rs.15,000/-bearing No. 900185 drawn on the same bank, towards interest and cost. 3. After receiving back those two cheques from the 1st respondent/complainant, the revision petitioner issued a new cheque i.e. Ext.P1 cheque to her, for an amount of Rs.61,000/-on 11.03.2000. When that cheque was presented for collection, it was dishonoured for the reason, ‘insufficient funds’. So, she sent Ext.P3 statutory notice to the revision petitioner, which was received by him, as seen from Ext.P5 acknowledgment card. The revision petitioner sent Ext.P6 reply stating that, the understanding was to pay Rs.61,000/-in cash on 11.03.2000, and till such payment the cheque was given only as a security. Since the amount was not paid within the statutory period, the 1st respondent/complainant preferred the complaint under Section 138 of the NI Act, against the revision petitioner. The learned Magistrate took cognizance of the offence, and issued summons to the revision petitioner. 4. On appearance, particulars of offence was read over, to which, the revision petitioner pleaded not guilty. PW1 was examined and Exts.P1 to P7 were marked from the side of the 1st respondent/complainant. 5. The learned Magistrate took cognizance of the offence, and issued summons to the revision petitioner. 4. On appearance, particulars of offence was read over, to which, the revision petitioner pleaded not guilty. PW1 was examined and Exts.P1 to P7 were marked from the side of the 1st respondent/complainant. 5. On closure of the complainant’s evidence, the revision petitioner was questioned under Section 313 of Cr.P.C. and he denied all the incriminating circumstances brought on record. Ext.D1 agreement was marked from his side. 6. On hearing the rival contentions from either side, and on analyzing the facts and evidence, the trial court found the revision petitioner guilty under Section 138 of the NI Act and, he was convicted and sentenced to undergo simple imprisonment for six months and compensation of Rs.61,000/-under Section 357(3) of the Code of Criminal Procedure. Aggrieved by the conviction and sentence, the revision petitioner preferred Crl.Appeal No.141 of 2004. The appellate court, on re-appreciation of the facts and evidence, found that the conviction under Section 138 of the NI Act was not liable to be disturbed and hence, the conviction was upheld. The substantive sentence was set aside, the compensation amount was modified to fine of Rs.52,000/-, with a rider that, if the fine amount is realized, Rs.50,000/-will be paid to the 1st respondent/complainant as compensation under Section 357(1)(b) of the Code of Criminal Procedure, against which, this revision is preferred by the revision petitioner. 7. Now this Court is called upon to verify the legality, propriety and correctness of the impugned judgment by which his conviction under Section 138 of the NI Act was upheld, though the sentence was confined to fine only. 8. Though service was complete on 1st respondent/ complainant, none appeared for her. 9. Heard learned counsel for the revision petitioner and learned Public Prosecutor, who is appearing for the 2nd respondent State. 10. Learned counsel for the revision petitioner would contend that, an offence under Section 138 of the NI Act is not attracted, since Ext.P1 cheque was issued only as a security cheque, and it was never issued towards discharge of any legally enforceable debt. At the same time, the revision petitioner is not challenging Exts.D1 and P7 agreement entered into between himself and the 1st respondent/complainant. At the same time, the revision petitioner is not challenging Exts.D1 and P7 agreement entered into between himself and the 1st respondent/complainant. As per Ext.P7 agreement, the revision petitioner agreed to return Rs.90,000/-to the 1st respondent/complainant and he had issued two cheques towards discharge of that debt. On the reverse side of the first page of Ext.P7 agreement, there is an endorsement dated 11.02.2000, which says that the revision petitioner had issued cheque No. 900190 to the 1st respondent/complainant for Rs.61,000/-which was agreed to be paid by him in cash to the 1st respondent/ complainant, on or before 11.03.2000. True that, the endorsement says that the amount will be given in cash on 11.03.2000. So, it gives an impression that, the cheque was given as an assurance to make payment of Rs.61,000/-on 11.03.2000. In Ext.P6 reply notice also, the case of the revision petitioner is that, the understanding was to pay a sum of Rs.61,000/-in cash, on 11.03.2000, and only as a security to make that payment, Ext.P1 cheque was issued by him to the 1st respondent/complainant. So, there was unequivocal admission from the part of the revision petitioner, that he owed Rs.61,000/-to the 1st respondent/complainant, and he had agreed to pay that amount in cash on 11.03.2000, and only to secure its payment on the date so agreed, Ext.P1 cheque was issued by him. 11. Now, let us see, whether Ext.P1, cheque if at all, it was issued as a security cheque, would attract an offence punishable under Section 138 of the NI Act on its dishonour by the Bank. Even when the revision petitioner says that, Ext.P1 cheque was issued as a security cheque, for assuring the payment which he had agreed to make on 11.03.2000, he has no case that, he paid that amount to the 1st respondent/complainant either before or after the due date. 12. In Sripati Singh v. State of Jharkand (2021 SCC Online SC 1002), the Apex Court observed that, if a cheque is issued as a security, and if the debt is not repaid in any other form before the due date or if there is no understanding or agreement between the parties to defer the repayment, the cheque would mature for presentation. 13. Paragraph Nos. 17 and 18 of that judgment reads thus:- "17. 13. Paragraph Nos. 17 and 18 of that judgment reads thus:- "17. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under S.138 and the other provisions of N.I. Act would flow. 18. When a cheque is issued and is treated as 'security' towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as 'security' cannot be presented prior to the loan or the instalment maturing for repayment towards which such cheque is issued as security. Further, the borrower would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine qua non to not present the cheque which was issued as security. These are only the defences that would be available to the drawer of the cheque in a proceedings initiated under S.138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. These are only the defences that would be available to the drawer of the cheque in a proceedings initiated under S.138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. If such is the understanding a cheque would also be reduced to an 'on demand promissory note' and in all circumstances, it would only be a civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as 'security' the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation." 14. The dictum laid down in Sripati Singh’s case (Supra), was reaffirmed by the Apex Court in Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel and Another [ 2022 (7) KHC 61 SC], and the Apex Court came out with the following principles:- (i) Where the borrower agrees to repay the loan within a specified timeline and issues a cheque for security but defaults in repaying the loan within the timeline, the cheque matures for presentation. When the cheque is sought to be encashed by the debtor and is dishonoured, S.138 of the Act will be attracted; (ii) However, the cardinal rule when a cheque is issued for security is that between the date on which the cheque is drawn to the date on which the cheque matures, the loan could be repaid through any other mode. It is only where the loan is not repaid through any other mode within the due date that the cheque would mature for presentation; and (iii) If the loan has been discharged before the due date or if there is an 'altered situation', then the cheque shall not be presented for encashment. 15. In the case on hand, there is clear admission from the part of the revision petitioner that, Rs.61,000/-was due to the 1st petitioner/complainant from him, and the endorsement in Ext.P7 agreement amply proves the same. 15. In the case on hand, there is clear admission from the part of the revision petitioner that, Rs.61,000/-was due to the 1st petitioner/complainant from him, and the endorsement in Ext.P7 agreement amply proves the same. Moreover, there is clear admission of that liability in the reply notice sent by him. We have seen that, if at all Ext.P1 cheque was issued as a security cheque, since the revision petitioner failed to repay the amount within the time stipulated and in the absence of any altered situation to defer the payment, the cheque matures for presentation, and when that cheque is presented and dishonoured for insufficiency of funds, no doubt, an offence under Section 138 of the NI Act will be attracted. 16. The revision petitioner has no case that, he repaid the amount due to the 1st respondent/complainant, within the time frame as agreed by him. There is nothing to show that there was any agreement between them to defer the payment. In that situation the 1st respondent/complainant was having every right to present that cheque for collecting the amount, and on its dishonour, he could have filed a complaint under Section 138 of the NI Act. Moreover, the presumption available under Sections 118 and 139 of the NI Act also comes to his aid. 17. So, the case of the revision petitioner that Ext.P1 cheque was issued only as a security and not towards discharge of any legally enforceable debt, and hence, an offence under Section 138 of the NI Act is not attracted, etc are liable to be rejected. 18. Though Ext.P1 cheque is for an amount of Rs.61,000/-, and the trial court sentenced the revision petitioner to pay compensation of Rs.61,000/-along with substantive sentence of simple imprisonment for a period of six months, the appellate court set aside the substantive sentence and modified the compensation amount of Rs.61,000/-to fine amount of Rs.52,000/-with a direction that, if the fine amount is collected, Rs.50,000/-will be given to the 1st respondent/complainant as compensation. Obviously such a finding was arrived, may be because of the terms in Ext.P7 agreement, that, the balance amount to be paid to the 1st respondent/complainant was only Rs.50,000/-. True that there is discretion for the court in imposing the fine amount. Obviously such a finding was arrived, may be because of the terms in Ext.P7 agreement, that, the balance amount to be paid to the 1st respondent/complainant was only Rs.50,000/-. True that there is discretion for the court in imposing the fine amount. But, as far as the amount mentioned in the cheque is concerned, the appellate court could not have reduced the liability, which was explicitly mentioned in the instrument. Parties may agree after due deliberations, what is the amount to be paid, taking into account various factors including the delay occurred or possible delay in making the payment. As per Ext.P7 agreement, two cheques for Rs.65,000/-in total were issued and thereafter, on mediation talks Ext.P1 cheque was issued for Rs. 61,000/-as seen from the endorsement on the reverse side of 1st page of Ext.P7 agreement, and that amount is categorically admitted in Ext.P6 reply notice sent by the revision petitioner. So, the appellate court could not be justified in reducing the liability covered under Ext.P1 cheque. However, no revision has been filed by the 1st respondent/complainant challenging the appellate court judgment by which the substantive sentence was set aside and the compensation amount was reduced. So, this Court is not interfering with the impugned judgment. 19. Finding no merit in the contentions raised by the revision petitioner, the revision petition is dismissed. 20. The revision petitioner is directed to surrender before the trial court on or before 31.01.2024, to pay the fine amount of Rs.52,000/-and in default, the trial court has to issue arrest warrant against him to execute the default sentence, without delay. If the fine amount is realized, Rs.50,000/-shall be paid to the 1st respondent/complainant as compensation under Section 357(1)(b) of the Cr.P.C. Registry is directed to transmit the case records forthwith, to expedite execution of the sentence.