JUDGMENT : 1. The complainant in S.T. No.128/2007 on the files of the Judicial First Class Magistrate Court-II, Thamarassery, has filed this appeal, with the leave of this Court, challenging the judgment of acquittal dated 31.03.2008, whereby the learned Judicial First Class Magistrate acquitted the accused in the above case, where the prosecution alleged commission of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 [hereinafter referred as ‘NI Act’ for short] by the accused. The 1 st respondent herein is the accused before the trial court and the 2 nd respondent herein is the State of Kerala, represented by the learned Public Prosecutor. 2. Heard the learned counsel for the appellant, the learned Public Prosecutor and the learned counsel appearing for the 1 st respondent, in detail. Perused the verdict under challenge and the records of the trial court. 3. Parties in this appeal shall be referred as ‘complainant’ and ‘accused’ hereafter. 4. In this matter, the case of the complainant, M/s Malabar Chit Funds (P) Ltd. is that, the accused joined in a chitty conducted by the complainant company and though, the accused bid the chitty and collected the prize amount, he failed to repay the installments due. Thereafter, the accused and one Mr. Binoy, his guarantor, undertook to repay the liability to the tune of Rs.82,500/-. In discharge of the said liability, Mr. Binoy issued a cheque in favour of the complainant and the same got dishonored for ‘insufficiency of funds’. Thus, the complainant launched prosecution against Mr. Binoy by filing S.T. No.80/2005 on the files of the Judicial First Class Magistrate Court-I, Thamarassery and the same was withdrawn, since Rs.50,000/- was paid by Mr. Binoy. Later, Ext.P3 cheque was issued by the accused in discharge of the balance liability. But, Ext.P3 cheque issued by the accused also got dishonored for want of funds. Then also, the accused failed to make the payment, though he accepted demand notice. 5. The trial court took cognizance of the matter and proceeded with trial. During trial, PWs 1 and 2 were examined and Exts.P1 to P14(a) were marked on the side of the complainant. After examination of the accused under Section 313(1)(b) of Cr.P.C, he himself got examined as DW1 and Exts.D1 to D3 were also marked. 6. 5. The trial court took cognizance of the matter and proceeded with trial. During trial, PWs 1 and 2 were examined and Exts.P1 to P14(a) were marked on the side of the complainant. After examination of the accused under Section 313(1)(b) of Cr.P.C, he himself got examined as DW1 and Exts.D1 to D3 were also marked. 6. On appreciation of evidence, the trial court acquitted the accused for the offence punishable under Section 138 of the NI Act, on the finding that the liability towards the complainant was discharged by the accused during the pendency of S.T. No.80/2005 on the files of the Judicial First Class Magistrate Court-I, Thamarassery, filed by the complainant against Mr. Binoy, who was the guarantor of the accused to the chitty transaction. Later, the said complaint was withdrawn. 7. While challenging the judgment of acquittal by the trial court, the learned counsel for the appellant/complainant argued that the accused joined a chitty run by the complainant company and received the chit prize money. But, he failed to repay the installments of the chitty. Later, Mr. Binoy, who is the guarantor of the accused to the chitty transaction issued a cheque for Rs.82,500/- and when the complainant presented the cheque for encashment the same got dishonored for want of funds. Thus, the complainant filed S.T. No.80/2005 before the Judicial First Class Magistrate Court-I, Thamarassery, alleging commission of offence punishable under Section 138 of the NI Act. During the pendency of S.T. No.80/2005, Rs.50,000/- was paid by Mr. Binoy and accordingly the said complaint was withdrawn. Later, the accused, the principal debtor himself issued the present cheque for Rs.37,919/- towards the balance outstanding amount and the said cheque also got dishonored for the reason ‘insufficiency of funds’. According to the learned counsel for the complainant, since the evidence given by PWs 1 and 2 clubbed with Exts.P1 to P14(a) would show the transaction led to execution of Ext.P3 cheque, which was issued for a legally enforceable debt, the complainant would get the benefit of presumptions under Sections 118 and 139 of the NI Act. According to the learned counsel for the complainant, since the evidence given by PWs 1 and 2 clubbed with Exts.P1 to P14(a) would show the transaction led to execution of Ext.P3 cheque, which was issued for a legally enforceable debt, the complainant would get the benefit of presumptions under Sections 118 and 139 of the NI Act. The learned counsel for the appellant/complainant also submitted that, even though the complaint filed against Mr.Binoy as S.T. No.80/2005 was withdrawn as per Ext.D3 the copy of withdrawal petition, the amount paid by him was Rs.50,000/- alone, after retaining the balance amount of Rs.37,919/- which was covered by Ext.P3 cheque, issued by the accused. Therefore, the trial court went wrong in holding that the liability towards the complainant was discharged by withdrawing the earlier case, S.T. No.80/2005 and thereby acquitted the accused. Therefore, the verdict of the trial court would require interference. 8. Refuting this contention, it is argued by the learned counsel for the accused that, on reading Ext.D3 copy of withdrawal petition in S.T. No.80/2005, it has been stated that the entire liability due to the complainant was discharged and accordingly the said complaint was withdrawn. Therefore, there is no legally enforceable debt or liability to be discharged by the accused, as alleged by the complainant. Therefore, the trial court rightly acquitted the accused. 9. In view of the rival submissions, the questions arise for consideration are: 1. Whether the trial court went wrong in holding that the accused did not commit the offence punishable under Section 138 of the NI Act? 2. Whether the trial court verdict would require interference? 3. Order to be passed? 10. In the instant case, M/s. Malabar Chit Funds (P) Ltd., a chitty company had approached the trial court, alleging that the accused committed the offence punishable under Section 138 of the NI Act, since Ext.P3 cheque issued by the accused for Rs.37,919/- towards the balance amount in his chitty transaction was dishonored and there was failure on the part of the accused to pay the same on receipt of demand notice. PW1, the Assistant Manager of the complainant company was examined and he supported the case of the complainant and it was through him Exts.P1 to P14(a) were marked. During cross- examination of PW1, he admitted withdrawal of S.T. No.80/2005 on receiving Rs.50,000/- though he initially stated that the amount paid was Rs.60,000/-. PW1, the Assistant Manager of the complainant company was examined and he supported the case of the complainant and it was through him Exts.P1 to P14(a) were marked. During cross- examination of PW1, he admitted withdrawal of S.T. No.80/2005 on receiving Rs.50,000/- though he initially stated that the amount paid was Rs.60,000/-. PW2, the Managing Director of the complainant company also supported the evidence given by PW1. 11. The case put up by the accused is by admitting the liability and raising the plea of discharge. The specific case of the accused as deposed by the accused, who got examined as DW1 is that, since there was liability to the chitty to the tune of Rs.82,500/-, Mr. Binoy one of his guarantor issued a cheque and on dishonor of the same, S.T. No.80/2005 had been lodged by the complainant and on payment of Rs.82,500/- along with Rs.5,000/- towards cost, the said case was withdrawn as per Ext.D3. On perusal of Ext.D1, the copy of complaint in S.T. No.80/2005, the averments in the complaint therein is that, to clear the entire liability to the tune of Rs.82,500/- due from the accused, Mr.Binoy along with the accused reached the complainant company and issued Ext.D2 cheque for Rs.82,500/- (Ext.D2 is the copy of the cheque in S.T. No.80/2005 produced by the accused). Ext.D3 the copy of withdrawal petition in S.T. No.80/2005, which would recite that the said case was withdrawn by the complainant, on the voluntary submission that the entire liability due to the company was discharged. It is relevant to note that, the withdrawal petition is seen filed by Sri.P.V. Chacko, the Assistant Manager, M/s.Malabar Chit Funds (P) Ltd. himself and his advocate Sri. P.C. Najeeb also signed in the petition. However, the contention raised by the complainant is that, Rs.50,000/- alone was paid at the time of withdrawal of S.T. No.80/2005. Thereafter, for the balance amount, Ext.P3 cheque was issued by the accused. Exts.P13 and P14 documents have been given much emphasis in this regard, on the submission that the same would justify the balance amount to be paid by the accused. Ext.P13 is the cash receipt book No.31 and Ext.P14 is the Receipt book No.162 of the complainant company. The trial court did not give emphasis to these documents, on the finding that the same are documents in the custody of the complainant. 12. Ext.P13 is the cash receipt book No.31 and Ext.P14 is the Receipt book No.162 of the complainant company. The trial court did not give emphasis to these documents, on the finding that the same are documents in the custody of the complainant. 12. In this matter, the liability to the complainant company to the tune of Rs.82,500/-, before filing of Ext.D1 complaint, is admitted by the accused and he raised contention that the entire liability towards the complainant was discharged and accordingly Ext.D1 complaint was withdrawn by filing Ext.D3 withdrawal petition. On perusal of the withdrawal petition, as already discussed, the same would show that the entire liability arising out of Ext.D1 complaint and Ext.D2 cheque, in relation to the chitty transaction of the accused was discharged. If so, the contention raised by the complainant negating the averments in Ext.D3 withdrawal petition that the accused issued Ext.P3 cheque again for the balance amount could not be believed and there is no legally enforceable debt or liability as on the date of Ext.P3 cheque. Further, the complainant is estopped from raising such a contention as against Ext.D3. 13. At this juncture, it is relevant to refer Section 138 of the NI Act. The same reads as under: 138. Dishonour of cheque for insufficiency, etc., of funds in the account — 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 provision 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: xxx xxx xxx Explanation — For the purposes of this section, “debt of other liability” means a legally enforceable debt or other liability. 14. 14. In order to attract the offence punishable under Section 138 of the NI Act, the cheque should have been issued in discharge, in whole or in part, of any debt or other liability and the debt or other liability means a legally enforceable debt or other liability. 15. In the instant case, in view of filing of Ext.D3 withdrawal petition by the complainant, no legally enforceable debt or liability subsisted in relation to the chitty transaction thereafter. If a cheque proved to be issued for no consideration in the form of debt or liability, dishonor of the same would not attract penal consequences under Section 138 of the NI Act and the same is not the scheme of the NI Act. Further, in such cases, the presumptions under Sections 118 and 139 of the NI Act also would not be available to the complainant. Therefore, the case advanced by the accused that, Ext.P3 is a cheque issued at the time of borrowing the chitty price and the same was misused by the complainant to launch prosecution against him, is the probable finding to be made in this case, as rightly done by the trial court. Therefore, the verdict of acquittal rendered by the trial court on the said finding does not require any interference and in such view of the matter, the appeal must fail. 16. In the result, this criminal appeal stands dismissed. All interlocutory applications pending in this appeal stand dismissed. 17. Registry is directed to forward a copy of this judgment to the trial court forthwith.