1. The Criminal Appeal is called from the file of Metropolitan Sessions Judge, Vijayawada. It is filed by the accused against the Judgment and sentence passed in C.C. No. 329/91. The Criminal Revision Case is filed by the complainant on the ground that the sentence passed in C.C. No. 329/91 is not adequate.

2. First of all I would like to deal with the Criminal Appeal.

3. The brief facts of the complaint are as follows :-

The complainant who is the 1st respondent, is represented by its Accounts officer Mr. P. S. Rao. It is stated that the 1st respondent-Company is registered under the Companies Registration Act. It is a joint venture of the Government of Andhra Pradesh and I.F.F.C.O. The Company manufactures DAP and also deals in other composite fertilizers like Urea, Calcium, etc. It has its Regional Marketing Office at 40-7-27/A/2, Mogalrajapuram, Vijayawada. Accused No. 2 is representing the Accused No. 1 Rice & Flour Mill. They are doing business in fertilizers and pesticides. They are having a continuous running account with the Complainant-Company. The accused fell in arrears to the tune of Rs. 10,99,899.90 ps. On 5-10-1991, Accused No. 1 gave a cheque for the said amount drawn on State Bank of Hyderabad, Huzurnagar in favour of the complainant. The complainant presented the cheque on the same day with their Banker Andhra Bank, Labbipet, Vijayawada to send the same for Collection to State Bank of Hyderabad, Huzurnagar. The Cheque was returned by the State Bank of Hyderabad, Huzurnagar with an endorsement "Funds Insufficient". This fact was informed to the complainant by its Banker on 14-10-1991 with debit advice charges of Rupees 1660/-. Immediately, the complainant gave a phonogram to Accused No. 1 on 14-10-1991 informing about the dishonour of the cheque and requested to arrange a draft for the same. On 21-10-1991, the complainant demanded the accused by Registered letter, informing about the dishonour of the cheque, and the amount due within 15 days from the date of receipt of the letter. The said letter was acknowledged by the Accused No. 2 on 29-10-1991. Accused No. 1 also acknowledged the same on 1-11-1991. In spite of that no amounts are paid. According to the complainant, the accused committed the offence punishable under section 138 of Negotiable Instruments Act. Hence the complaint.

4-5. To prove their case the Prosecution examined P.W. 1 and marked Exs. P-1 to P-7. Nobody was examined on behalf of defence, but Ex. D-1 was marked.

6. Considering both oral and documentary evidence, the lower Court held that the offence punishable under section 138 of Negotiable Instruments Act is made out and sentenced Accused No. 2 who is the Proprietor of Accused No. 1 Rice & Flour Mill, to undergo Rigorous Imprisonment for a period of one month and to pay a fine of Rs. 5,000/-, in default, to undergo Imprisonment for one month.

7. Against the said Judgment and sentence the present Appeal is filed.

8. The complainant, as stated earlier, filed Criminal Revision Case on the question of adequacy of the sentence passed.

9. Since both the matters are connected they are being disposed of by this common Judgment.

10. There is no dispute in the fact that the accused are the customers of the complainant. The issuance of the cheque (Ex. P-1 dt. 5-10-1991) in favour of the complainant in respect of he amount due on the running account is not disputed. The fact of dishonour and intimation under Ex. P-2 dt. 14-10-1991 and Ex. P-3 dt. 8-10-1991 and the subsequent Phonogram Ex. P-4 dt. 14-10-1991 are not in dispute. It is also not in dispute that the complainant issued Ex. P-5 dt. 21-10-1991 (office copy of the notice issued by the complainant). The said notice was received by the accused under acknowledgment Ex. P-6 22-10-1991.

11. The learned counsel appearing for the appellant/A-2 submitted that though there was outstanding amount and though Ex. P-1 cheque was issued towards payment of the said amount to the 1 st respondent/complainant, that was replaced by Ex. D-1 agreement under which the complainants/1st respondent agreed to receive the amount in instalments.

12. The terms of Ex. D-1 agreement are brought to my notice. Ex. D-1 indicates that the 1 st respondent/complainant agreed to receive the amount in three instalments. On this aspect, the evidence of PW-1 who represented the complainant is very important. PW-1 though denied the suggestion that as per Ex. D-1 the accused need not pay the amount in lumpsum and that they have no right to proceed against the accused in the cross-examination he admitted the execution of Ex. D-1. Ex. D-1 is dated 19-11-1991. In the cross-examination PW-1 admitted that a letter was addressed to the accused on 28-12-1991 by the Head Office stating that as per the terms undertaken by the accused dt. 19-11-1991 the accused were to pay the entire amount of Rs. 8,21,029-12 in four instalments and a sum of Rs. 2,71,029-12 is payable on or before 31-12-1991 towards the first instalment and that the Head Office demanded the accused to pay the first instalment as per Ex. D-1, the terms of which were proposed by the accused themselves. This indicates that the complainant-Company itself had agreed for the entire amount to be paid in four instalments and the first instalment was to he paid on or before 31-12-1991. In such a case, the liability to pay in lumpsum in lieu of which, Ex. P-1 was issued is wiped out and in its place the terms of Ex. D-1 were constituted. When the complainant itself was insisting upon payment of the amount due in instalments, it does not lie in its mouth to file a complaint on the basis of Ex. P-1 which was issued on 5-10-1991 and consequently the subsequent documents Exs. P-2, P-3 and P-4 came into existence. Further in this case. The complaint was filed on 20-11-1991. Ex. D-1 is dt. 19-11-1991. So, when the complaint was given there was no cause of action for the complainant to rely upon Ex. P-1.

13. On the other hand the learned counsel for the complainant/1st respondent submitted that the Company itself is not a party to Ex. D-1. Therefore, the terms of Ex. D-1 are not binding. Further he submitted that PW-1 was not authorized to speak on the terms of Ex. D-1. Whatever PW-1 submitted in respect of Ex. D-1 is unauthorized and cannot he taken into consideration. The learned counsel further submitted that the amount was due as on 13-11-1991. On that day, Ex. D-1 was not in existence. Therefore, no reliance can be placed on the contents of Ex. D-1. His further contention is that the introduction of Ex. D-1 terms is invalid. Ex. P-5 notice was given to the accused on 21-10-1991. To this there was no reply from the accused. Therefore, the subsequent stand taken by the accused is only an afterthought and no importance can be given to the contents of Ex. D-1.

14. I am unable to agree with this contention. It is true that the amount in lieu of which Ex. P-1 was given was outstanding amount in the running account as on 13-11-1991. Ex. P-1 was given by the accused in discharge of that debt. But subsequently the accused wrote letter and that was acted upon. PW-1 clearly stated that the Company/1 st respondent wrote letter on 28-12-1991 demanding payment of first instalment. This clearly indicates that the terms of Ex. D-1 were accepted by the 1st respondent-Company and they were acting upon those terms. The contention that PW-1 was not authorised to speak of Ex. D-1 is also devoid of any merit. PW-1 is representing the complainant-Company. Therefore, the complainant-Company cannot turn round and say that the evidence of PW-1 in respect of Ex. D-1 is not binding on them.

15. The lower court applied the rule of thumb that once the cheque is issued and it is subsequently dishonoured, the offence under section 138 of Negotiable Instruments Act is made out. This is erroneous. When the complainant itself agreed for the terms of Ex. D-1, about which PW-1 gave replies in favour of the accused/appellant it cannot be held that the accused/appellant is guilty for the offence punishable under section 138 of Negotiable Instruments Act.

16. For all the above reasons, no case is made out against the appellant/accused for the offence punishable under section 138 of Negotiable Instruments Act. Hence, the Judgment and sentence of the lower court are set aside. The Transfer Criminal Appeal is accordingly allowed.

17. Consequent upon the findings in the Transfer Criminal Appeal, the Criminal Revision Case is dismissed.

Appeal allowed.