K. SREEDHAR RAO, J.

( 1 ) THE appeal is filed against the judgment and order of the acquittal passed by the judicial magistrate of the first class, shimoga in c. c. No. 368 of 1993. The appellant is the complainant before the trial court had filed a complaint under Section 200 of the Criminal Procedure Code against the respondent-the accused before the trial court for committing an offence punishable under Section 138 of the negotiable instruments act. As per the complainants version, the accused had borrowed a sum of Rs. 30,000/- on 10-2-1993 for his business purpose and towards the repayment of the said liability cheque, ex. P. 1, dated 20-8-1993 for Rs. 30,000/- was issued drawn on bank of india, shimoga branch. The complainant submitted the cheque through his banker for collection which was dishonoured with an endorsement there are no sufficient funds. Consequently, a legal notice was issued as required under law intimating the dishonour and denying payment. The accused replied the legal notice disowning the liability contending that he has not issued any cheque and that the complainant was associated with the business of the accused carried under the style of "darshan prabha traders" dealing with confectioneries and on account of the mismanagement by the complainant and his brother-in-law, the accused has sustained loss in the business and that the complainant had also invested Rs. 22. 400/- on the condition that the complainant and the accused shall share the profits and loss equally. In that connection the complainant was allowed to freely deal with the books of accounts and bank accounts thus thereby misusing the opportunity, a false liability is concocted by manipulating the cheque.

( 2 ) A private complaint came to be lodged. The accused appeared before the trial court contested the case. In evidence, the complainant has examined himself and one witness who is bank manager of the bank of india. For the complainant five documents are marked. Ex. P. 1 is the cheque, ex. P. 2-endorsement given by the bank, ex. P. 3-copy of the notice issued by the complainant, ex. P. 4-postal acknowledgement, ex. P. 5-reply given by the accused. On behalf of the accused, no witness is examined. However, three documents are marked, ex. D. 1 is the ledger pertaining to the business of the accused, ex. D. 2 is the form No. 3 pertaining to sales tax, ex. D. 3 is the notebook which contains the handwriting of the complainant.

( 3 ) THE technical requirement of issuance of notice within the period stipulated and filing of the complaint within the time stipulated is not in dispute. The accused takes a substantial defence that the complainant is business associate and he was allowed to deal with the accounts and bank transactions and in that connection the complainant had issued cheque signed by him and the same is misutilised to fasten the false liability. In fact, the accused is not examined and the defence version is by and large indicated by the reply notice ex. P. 5 and the evidence in the cross-examination. The trial court comes to the conclusion that the accused is not guilty for the following reasons:

(1) that the complainant failed to show that he had sufficient financial resources to have lent the amount as alleged, since as per the evidence in the cross-examination complainant says that he has a bank account for the past 15-20 years and that no documentary evidence is produced to show that the complainant did possess the required funds to have lent Rs. 30,000/ -.

(2) the complainant admits in his cross-examination that towards the alleged liability, a pronote was executed and after the quarrel a cheque was issued and some of the writings of the cheque are admitted to be in different ink and therefore it was concluded that the cheque was not issued voluntarily for discharge of any debt or legal liability.

(3) the trial court holds that the complainant was associated as a partner with the business of the accused and he was also writing accounts and dealing with the officials and third parties with regard to the business. In view of such situation the court upholds the theory of the defence.

(4) the trial court finds that the endorsement given by the bank is incorrect and false since according to the evidence of P. W. 2-bank manager as on 29-5-1989 the account was closed and as the complainant was associated with a business, he would have been aware of the position of the defendant bank account and therefore, either the issuance and acceptance of the cheque relating to a closed bank account is improbable.

( 4 ) THE counsel for the respondent strenuously contended that when two views on the evidence is probable, the appellate court has to be very slow in interfering with the view of the trial court and contended that the judgment of acquittal of the trial court is fully justified for the reasons spoken to in the judgment. The trial court travelling beyond the records and the legal presumption available under Section 139 of the Negotiable Instruments Act by conjunctures takes the view that the complainant has not proved his financial capacity to convince that he could have lent the amount of Rs. 30,000/- as alleged. The trial court takes note of the replies given in the cross-examination that the complainant has been maintaining the bank account. Therefore, in that regard insists that the complainant ought to have produced his bank pass book to show his financial capacity. This logic of the trial court is totally unwarranted because in the cross-examination, there is not an iota of suggestion made challenging the financial capacity. The defence theory itself discloses that the complainant invested around Rs. 24,000/- in the business.

( 5 ) SIMILARLY, the trial court has made much about the difference in ink. Admittedly, a cheque is issued bearing signature of the accused. This fact is beyond dispute. It is the contention of the defence that blank cheques issued for the business transactions have been illegally converted as a subject-matter of this case fastening false liability. The admissions made by the complainant about his association with the business has been stretched too far, to infer and attribute manipulative acts on the part of the complainant. The said circumstances cannot take anywhere near the defence theory to appreciate that in view of such association, the complainant indulged in dishonest manipulative acts. The circumstances of the complainants association with the business may also be a valid circumstance to believe the complainants case of parting of funds as alleged.

( 6 ) THERE is no positive version of defence placed on record. The accused in the case has not examined himself nor has he placed any positive defence version. The aforesaid pleas are taken up by picking out of context the statements made in the cross-examination and from the averments in the reply of the accused a hazy defence theory is sought to be built-up. The trial court relying on the ruling of Andhra Pradesh high court in 1995 cr. L. . 1556 (ap), comes to the conclusion that prior to the issuance of cheque a pronote was already obtained. Therefore, under the circumstances, taking blank cheques with a signature of the accused amounts to be concoction and not voluntarily act of issuance of cheque. Per contra the gujarat high court in satish jayantilal shah v pankaj mashruwala and another, has held thus:

"while admitting issuance of disputed cheques Mr. Gupta, the learned Advocate for the applicant/accused vehemently argues that the body of cheques is not written by the drawer and that the cheques were not voluntarily given in discharge of legal debt or liability and thus Provisions of Section 138 of the negotiable instruments act are not applicable. On this point, he relies upon decision in the case of taher n. Khamabi v M/s. Vinayak enterprises, secunderabad and others. Mr. K. p. raval, learned additional public prosecutor, appearing for the state has invited my attention to cross-examination on behalf of the applicant and statement of accused under Section 313 of the Criminal Procedure Code, wherein issuance of cheque has been clearly admitted. In my view, this question being purely a question of facts, cannot be raised and appreciated while exercising revisional jurisdiction more particularly when no such contention was ever raised before the trial court. The only defence advanced before the trial court is that the cheques were given to the complainant as advance payment towards the goods to be delivered in future. Thus, the applicant clearly admitted execution, hence, this contention needs no consideration and be rejected. Apart from this fact, no law provides that in case of any negotiable instrument entire body has to be written by maker or drawer only. What is material is signature of drawer or maker and not the body writing hence question of body writing has no significance".

( 7 ) IT is not objectionable or illegal in law to receive a in choate negotiable instrument duly signed by the maker despite the material particulars are kept blank if done with an understanding and giving full authority to the payee to fill up the material contents as agreed upon. Such a course of action in law cannot vitiate the transaction nor can invalidate the negotiable instrument issued and such transaction fully binds the maker of the negotiable instruments to the extent it purports to declare. This is explicit from the Provisions of Section 20 of the negotiable instruments act which reads thus:

"inchoate stamped instruments. Where one person signs and delivers to another, a paper stamped in accordance with the law relating to negotiable instruments then in force in india, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount, provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder".

( 8 ) THE fact that a document executed is inchoate with regard to some of the material particulars would not render such contract invalid nor make the instrument illegal or inadmissible. Voluntarily, if a person were to deliver an inchoate instrument authorising the receiver to fill up the material contents as agreed upon, the cheque does not get tainted as inadmissible nor it amounts to tampering with the material particulars.

( 9 ) IN the present case as observed above, there is no categorical defence version, it is only by conjunctures and surmises, a case is made out from the difference in ink between the signature of the cheque and the other handwritten contents. The accused who has drawn the cheque has not denied the contents of cheque nor has made out any case that it does not bear his handwriting and signature. Therefore, on facts also, there is no justification for the trial court to have come to the conclusion adversely against the complainant on this aspect.

( 10 ) THE evidence of the bank manager, P. W. 2 discloses that at the time when the cheque was issued the account was already closed. Under such circumstances, a question would arise whether the Provisions of Section 138 of the act gets attracted to such situation.

( 11 ) THE ruling of the Bombay high court in shivendra sansguiri v M/s. Adineo and another, wherein it is held thus:

"mere dishonouring of a cheque cannot implicate the drawer of the cheque under Section 138. The holder of the cheque should bring to the notice of the drawer of the cheque the event of dishonouring within 15 days from the date of dishonour and in case the drawer of the cheque did not pay the amount covered by the cheque within 15 days thereafter then only Section 138 will attract. Therefore, the ground on which the cheque was dishonoured is not very material. It can very well be on closure of account also. If this ground is not held to be one covered under Section 138 of the Negotiable Instruments Act, then the very purpose of the legislation would be defeated. If a debtor with an ulterior motive issues a cheque in discharge of his debt and closes the account before or after the issuance of cheque to avoid payment he is doing it on his own risk. Moreover, cheque facility is afforded by a bank to its customer only when a customer opens an account in a bank with funds. This is part of its banking activity. Law does not take cognizance of a situation of issuance of a cheque without an account in the bank. If any customer closes an account with the bank it is the legal responsibility of the banker to see that all unused cheque leaves are surrendered to the bank and see that the cheque issued by the customer before closure of account is honoured. However, this obligation of the banker does not absolve the drawer from the liability in the event of the cheque being dishonoured, under Section 138 of the Negotiable Instruments Act, if he closes the account before or after the issuance of the cheque because when cheque is drawn in discharge of a pecuniary liability it can be always presumed that there exists an account in the bank in the name of a drawer. This presumption however, cannot be displaced by misusing cheque facility after closing the account. In such circumstances, the drawer of the cheque is not only liable under Section 138 of the Negotiable Instruments Act, but also under Banking Regulation Act. At any stretch of reasoning, it cannot be said that such misuser of cheque is not liable under Section 138 of the Negotiable Instruments Act".

( 12 ) THE relevant portion of the Provisions of Section 138 of the act is extracted hereunder:

"138. DISHONOUR of cheque for insufficiency, etc. , of funds in the account. Where any cheque drawn by a person on 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 extend to one year, or with fine which may extend to twice the amount of the cheque, or with both".

( 13 ) KEEPING in view the legislative intendment of providing efficacious and expeditious remedy to the business community and to make the transaction of issuance of cheques as a matter of a serious concern to prevent the persons from unscrupulously resorting to issue of cheques without concern for contractual commitments is made an offence when the cheque issued is dishonoured on the ground that money standing in the credit of the account is insufficient to honour or that it exceeds the amount arranged to be paid from the account by the agreement made with the bank.

( 14 ) IN nepc micon limited and others v magma leasing limited, it has been held thus:

"the return of a cheque by the bank unpaid on the ground that the "account is closed" would mean that the cheque is returned as unpaid on the ground that "the amount of money standing to the credit of that account is insufficient to honour the cheque". The reason is that the cheque was dishonoured as the amount of money standing to the credit of "that account" was "nil" at the relevant time apart from it being closed. The closure of the account would be an eventuality after the entire amount in the account is withdrawn. It means that there was no amount in the credit of "that account" on the relevant date when the cheque was presented for honouring the same. The expression "the amount of money. . . . . is insufficient to honour the cheque" is a genus of which the expression "that account being closed" is a specie. After issuing the cheque drawn on an account maintained, if the drawer closes "that account" apart from the fact that it may amount to another offence, it would certainly be an offence under Section 138. Further, in view of provisos (a), (b) and (c) to Section 138, the cheque is to be drawn by a person for payment of any amount of money due to him "on an account maintained by him" with a banker and only on "that account" the cheque should be drawn. The dishonouring of the cheque on the ground that the account is closed is the consequence of the act of the drawer rendering his account to a cipher. Hence, reading sections 138 and 140 together, it would be clear that dishonour of the cheque by a bank on the ground that the account is closed would be covered by the phrase "the amount of money standing to the credit of that account is insufficient to honour the cheque".

Even with regard to a penal provision, any interpretation which withdraws the life and blood of the provision and makes it ineffective and a dead letter should be averted. If the interpretation which is sought for were given, then it would only encourage dishonest persons to issue cheques and before presentation of the cheque close "that account" and thereby escape from the penal consequences of Section 138. Therefore, even though Section 138 is a penal statute, it is the duty of the court to interpret it consistent with the legislative intent and purpose so as to suppress the mischief and advance the remedy. Section 138 of the act has created a contractual breach as an offence and the legislative purpose is to promote efficacy of banking and of ensuring that in commercial or contractual transactions cheques are not dishonoured and credibility in transacting business through cheques is maintained". Further, it is also not of any relevant significance in law to make a distinction between a situation where the cheque is issued before the closure of the account or subsequent to the closure of the account. In other words, where the closure of the account precedes or succeeds, the issuance of cheque in both the situations, it would be an offence under Section 138 of the Negotiable Instruments Act. Accordingly, the order of the trial court is set aside. The accused is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act and sentenced to pay a fine of Rs. 50,000/- and out of the said fine, Rs. 45,000/- shall be payable as compensation to the complainant and the balance of Rs. 5,000/- shall go to the state.