Karnataka High Court

L Rajkumar vs B G Venkateshalu Naidu on 6 July, 2023

Bench: J.M.Khazi

                            1           Crl.A.No.151/2012



    IN THE HIGH COURT OF KARNATAKA AT BENGALURU

         DATED THIS THE 6TH DAY OF JULY, 2023

                          BEFORE

           THE HON'BLE MS.JUSTICE J.M.KHAZI

          CRIMINAL APPEAL NO.151 OF 2012

BETWEEN:

L RAJKUMAR
S/O LATE L C LINGAPPA
AGED ABOUT 44 YEARS
R/AT NO.26, 17TH CROSS,
RANGANATHAPURA,
MALLESHWARAM
BENGALURU
                                           ...APPELLANT
(BY SRI. N UDAYKUMAR, ADVOCATE)

AND:

B G VENKATESHALU NAIDU
S/O LATE GOVINDASWAMY
AGED ABOUT 57 YEARS
SRIDEVI, NO.33/E, 17TH MAIN,
VIJAYANAGAR
BENGALURU - 560 032
                                      .....RESPONDENT
(BY SRI. RAMESHCHANDRA, ADVOCATE)

    THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
OF CODE OF CRIMINAL PROCEDURE PRAYING TO SET ASIDE
THE ORDER PASSED BY THE LEARNED FTC-V JUDGE
BENGALURU IN CRIMINAL APPEAL NO.626/2011 DATED
07.01.2012,   VIDE ANNEXURE-B; b) PASS SUCH OTHER
RELIEF OR RELIEFS AS THIS HON'BLE COURT DEEMS FIT IN
THE CIRCUMSTANCES OF THE CASE, IN THE INTEREST OF
JUSTICE AND EQUITY.

     THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED    ON    08.06.2023, COMING   ON   FOR
                               2                Crl.A.No.151/2012



PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:

                      JUDGMENT

This appeal is filed by complainant challenging the

judgment and order passed by the Sessions Court, whereby

it has allowed the appeal filed by the accused, challenging

his conviction and sentence by the trial Court for the

offence punishable under Section 138 of N.I Act.

2. For the sake of convenience the parties are

referred to by their rank before the trial Court.

3. It is the case of the complainant that he and

accused are good friends. Accused is doing real estate

business. Complainant was owning a site at Athmiya

Galayara Balaga, Chikkalsandra, Hesaraghatta Road,

Bangalore measuring 40 x 50 ft. He sold the same during

June 2006 for a sum of Rs.12 lakhs. Accused was aware of

the said fact. Accused borrowed a sum of Rs.11,50,000/-

from the complainant promising to repay the same within 6

to 8 months. After 6 months when complainant approached

the accused and demanded repayment of the loan, accused

issued in all 5 cheques i.e., 2 cheques for Rs.1,50,000/-

each drawn on Karnataka Bank, Vijayanagar branch,

Bangalore, 2 cheques for Rs.1,50,000/- each and one

cheque for Rs.5,50,000/- drawn on Vijaya Bank, Gandhi

Bazaar Branch, Basavanagudi, Bengaluru.

3.1 Initially complainant presented one cheque for

Rs.1,50,000/- drawn on Karnataka Bank. It was returned

dishonored on the ground of "insufficient funds". Again on

the instructions of the accused, he presented it, once again,

it was returned dishonored on the ground of "insufficiency

of funds". The other cheques were also dishonored on the

ground of "insufficient funds". Complainant got issued legal

notice to the accused through RPAD as well as under

certificate of posting on 03.01.2009. The legal notice sent

through RPAD is returned as 'Not claimed'. However, the

one sent under certificate of posting is served. Accused has

not sent any reply to the legal notice. He has also not

complied with the requirement of the legal notice. Without

any alternative the complaint is filed.

4. Before the trial Court, accused has put in his

appearance through counsel and contested the matter. He

has pleaded not guilty and claimed trial.

5. In support of his case, complainant got himself

examined as PW-1 and got marked Ex.P1 to 17.

6. During his statement under Section 313 Cr.P.C,

accused has denied the incriminating evidence.

7. In fact, he has entered into the witness box by

examining himself as DW-1. He has got marked Ex D1 and

M1.

8. The trial Court convicted the accused and

sentenced him to pay fine of Rs.11,55,000/- and in default

of paying the fine, accused shall undergo simple

imprisonment for a period of six months

9. Accused challenged the same before the

Sessions Court in Crl.A.No.626/2011. Vide the impugned

judgment and order the Sessions Court allowed the appeal

and acquitted the accused.

10. Being aggrieved by the impugned judgment and

order the complainant is before this Court contending that

the impugned judgment and order is opposed to facts,

provision of law and as such liable to be set aside. The

Sessions Court has erred in holding that notice is not duly

served on the accused, though it is proved that accused is

the residing in the same address. In fact, he has been

served at the same address before the trial Court. The

complainant has led evidence to show that before issuing

the subject cheques, accused had issued a cheque for

Rs.5 lakhs as per Ex. M1 and since there were over writing,

he took it back and issued the remaining cheques. The

Sessions Court has failed to appreciate the evidence led by

the complainant regarding his financial capacities.

11. The Sessions Court has also failed to appreciate

the fact that accused is not an illiterate. He was Manager of

Vijaya bank. He was also president of a Credit Co-operative

Society. The findings of the Sessions Court is contrary to

the oral as well as documentary evidence placed on record.

It has also failed to draw the presumption under Sections

118 and 139 of N.I Act. The findings of the Sessions Court

is liable to be interfered with and the order of the trial

Court is to be confirmed.

12. In support of his arguments, learned counsel for

complainant has relied upon the following decisions:

(i) Kalamani Tex and another Vs. P.Balasubramaian (Kalamani Tex)1

(ii) Rangappa Vs. Sri Mohan (Rangappa)2

(iii) Triyambhak S. Hegde Vs. Sripad(Triyambhak)3

(iv) M.G.Siddappa Vs. Mallikarjuna M (M.G.Siddappa)4

(v) APS Forex Services Pvt. Ltd., Vs. Shakti International Fashion Linkers & Ors.

(APS Forex)5

(vi) Rohitbhai Jivanlal Patel Vs. State of Gujarat and Anr. (Rohitbhai Jivanlal Patel)6

(vii) Kumar Exports Vs. Sharma Carpets (Kumar Exports)7

(viii) Smt. K. Vasantha Kumari Vs. D. Devendra Reddy (K.Vasantha Kumari)8

(ix) R.Sridher Vs. T.K.Rajendra Sha (R.Sridher)9

13. On the other hand, learned counsel for accused

supported the impugned judgment and order and prays to

dismiss the appeal.

(2021) 5 SCC 283

(2010) 11 SCC 441

Crl A. Nos.849-850/2011(SC)

Crl.R.P.No.547/2015 (HC)

AIR 2020 SC 945

AIR 2019 SC 1876

(2009) 2 SCC 513

2008 CRI.L.J. 1001

2008 Crl.L.J (NOC) 566 (MAD)

14. In support of his arguments, he has relied upon

the following decisions:

       (i)     Narasimha Murthy Vs. Janakirama
               (Narasimha Murthy)10

       (ii)    M/s. Jai Durga Enterprises & Anr. Vs. State of
               U.P. & Anr. (M/s. Jai Durga) 11

       (iii)   Bharat   Barrel    and Drum     Manufacturing
               Company Vs. Amin Chand Payrelal
               (Bharat Barrel) 12

       (iv)    Krishna Janardhan Bhat Vs. Dattatraya           G.
               Hegde (Krishna Janardhan Bhat) 13

       (v)     Shiva Murthy Vs. Amruthraj (Shiva Murthy) 14

       (vi)    M/s. Kamal General Store Vs. Kishori Lal Vij
               (M/s. Kamal) 15

(vii) C.T.Joseph Vs. I.V. Phillip (C.T. Joseph) 16

(viii) C. Antony Vs. K.G.Raghavan Nair (C.Antony) 17

(ix) M.S.Narayana Menon alias Mani Vs. State of Kerala & Anr. (M.S.Narayana Menon) 18

(x) John K.John Vs. Tom Varghese & Anr. (John) 19

(xi) K. Prakashan Vs. P.K.Surenderan (K.Prakashan) 20

ILR 2003 KAR 773

2006 CRI.L.J. 3312

AIR 1999 SC 1008

AIR 2008 SC 1325

ILR 2008 KAR 4629

2009 CRI.L.J.882

II (2001) BC 498 (DB)

(2003) 1 SCC 1

AIR 2006 SC 3366

2007 AIR SCW 6736

(2008) 1 SCC (Crl) 200

(xii) Kanhaiya Lal and Anr Vs. State of U.P., and Anr. (Kanhaiya Lal) 21

(xiii) Veerayya Vs. G.K.Madivalar (Veerayya) 22

(xiv) Basalingappa Vs. Mudibasappa (Basalingappa)23

15. Heard elaborate arguments of both sides and

Perused the record.

16. At the outset, it is relevant to note that accused

is not disputing the fact that the cheques in question

belongs to him drawn on his account maintained with the

Bank and they bear his signatures. Consequently, as held

in Kalamani Tex, Rohitbhai, Rangappa, Kumar

Exports, Triyambhak and APS Forex, the presumption

under Sections 118 and 139 of N.I.Act is operating in

favour of complainant that the cheques in question were

issued towards the payment of legally recoverable debt or

liability. Consequently, the burden is on the accused to

rebut the presumption and prove the circumstances under

which the cheques reached the hands of complainant.

2010 CRI.L.J. 2769

2012 (3) KCCR 2057

AIR 2019 SC 1983

17. The accused has taken up a defence that the

legal notice is not served on him and as such one of the

essential ingredients to attract offence punishable under

Section 138 of N.I Act is not fulfilled and therefore the

complaint is not maintainable. On the other hand, the

complainant has pleaded that though the notice was duly

sent to the address of the accused, intentionally he has not

chosen to receive it and as such there is a presumption that

it is duly served. Of course complainant has contended that

the notice sent under certificate of posting is not returned

and therefore it is presumed to have been served on the

accused.

18. Ex.P16 is the postal envelop through which the

notice was sent. It is returned with endorsement 'Not

claimed'. The endorsement on the postal envelop also

disclose the fact that on 5th, 6th and 7th of December 2008,

the postman has gone to the address and on finding the

door locked, he has delivered intimation. As the accused

has failed to collect the postal envelop from the post office,

on 16.01.2009, it is returned to the sender. At this stage, it

is relevant to note that accused is not disputing his address

to which the legal notice was sent. In fact in the complaint

as well as in the present appeal, the same address is given

and accused is served at the same address. In K.Vasantha

Kumari and R.Sridher, the Co-ordinate Bench of this

Court held that if the accused is not disputing his address

and the notice sent is returned as 'Not claimed', it is

presumed to be served.

19. Of course, accused has not lead any evidence to

show that at the relevant point of time he was not staying

in the address to which the legal notice was sent. Therefore

under Section 27 of the General Clauses Act, it is presumed

that the notice sent to the accused is duly served. Despite

knowing the fact that a postal envelope being sent to him,

intentionally the accused has not chosen to receive it. As

per Section 27 of General Clauses Act, where any Central

Act or Regulation requires any document to be served by

Post, it shall be deemed to be effected by properly

addressing, preparing and posting by registered post, a

letter containing the document to have been effected at the

time at which the letter would be delivered in the ordinary

course of post.

20. Such being the case, the accused has

intentionally not chosen to receive the notice sent to him

and thereby lost an opportunity to come up with a

justification for not honouring the cheque. In fact, the trial

Court in detail discussed these aspects and come to a

correct conclusion that the notice is deemed to have been

served and the accused has intentionally failed to receive it

and send reply or comply with the same. However, the

Sessions Court has erred in holding that there is no service

of notice.

21. During the course of cross-examination of the

complainant, accused has taken up a defence that the

complainant has entered into a agreement to purchase a

site from one Sridhar Achari and in order to demonstrate

that he is having sufficient means to purchase the said site,

complainant took blank cheques from the accused to show

to Sridhar Achari and misused them to file the complaint.

Of course, though the complainant admitted that he has

entered into an agreement to purchase a site from said

Sridhar Achari, he has denied the suggestion that only to

show to the said Sridhar Achari, the blank cheques were

taken from the accused.

22. As rightly observed by the trial Court, the

defence set forth by the accused cannot be accepted,

especially when accused is not a layman. He is a retired

Bank Manager and also President of a Credit Co-operative

Society and other institutions. Moreover, it does not stand

to reason that by showing some cheques which are

belonging to another person, the said Sridhar Achari would

be convinced that the complainant is having sufficient

means. If the cheques were realized and the amount due

under the said cheques is credited to the account of the

complainant, things would have been different. Merely

showing cheques issued In favour of the complainant would

prove his capability cannot be accepted. The defence put

forth by the accused is not probable and such defence

cannot be accepted.

23. During the cross-examination of the

complainant, the accused has challenged his financial

capacity to lend Rs.11.5 lakhs to the accused. In the light

of the presumption under Sections 118 and 139 of the

N.I.Act and having regard to the fact that accused has

failed to rebut the presumption and as the accused has

failed to send reply to the legal notice, challenging the

financial capacity of the accused and in the light of the

decision of the Hon'ble Supreme Court in Tedhi Singh

case, the complainant need not in first prove his capacity to

advance the loan to the accused. In the present case, the

complainant has produced Notarised copy of the sale deed

at Ex.P17 through which he has sold site to Mohamed

Mukhtar. According to the complainant, he has sold the

said site for Rs.12 lakhs. It appears to save the stamp duty

and expenses in the said deed, the sale consideration is

shown as Rs.4.93 lakhs. The fact that the said site was sold

for 12 lakhs is not seriously disputed by the accused. From

the material placed on record, the complainant has proved

that the complainant was having financial capacity to lend

Rs.11.5 lakhs to the accused and towards repayment of the

same accused has issued the cheques which were later

dishonored.

24. The accused has led evidence to show that in

Vijaya Bank, he was having Fixed Deposit of Rs.15 lakhs.

However, during his cross-examination, he has admitted

that the Bank would not honour the Cheque if the account

holder is not having sufficient amount in the account,

though he may be having Fixed deposits, unless there is

instructions by the account holder to honour the cheque by

releasing the Fixed Deposit. Admittedly, in the present

case, the accused had not given any standing instructions

to the bank to honour the cheques by releasing the Fixed

Deposit standing in his name. Consequently, this evidence

would not come to the rescue of the accused.

25. Though the accused has issued the cheques in

favour of the complainant, he has not chosen to maintain

sufficient balance in the account to honour the same. He

has also not given any instructions to the Bank to honour

the same by releasing the Fixed Deposit. For the sake of

the defence, accused has taken up a contention that the

cheques were issued only to enable the complainant to

impress upon his vendor to execute the sale deeds. At the

earliest available opportunity, the accused has not chosen

to send reply to the legal notice by putting forth such a

defence.

26. Considering the oral and documentary evidence

placed on record, by a detailed and considered judgment

and order, the trial Court had rightly come to the

conclusion that the charges leveled against the accused are

proved beyond reasonable doubt. However, the Sessions

Court wrongly held that the legal notice is not duly served

and that the complainant has not proved his financial

capacity.

27. So far as the decisions relied upon by the

accused are concerned, viz., Narasimhamurthy, M/s Jai

Durga, Bharath Barrel, M/s Kamal, C.T.Joseph,

M.S.Narayana Menon, John, Kanhaiya Lal, Veerayya

and Basalingappa are not applicable to the facts and

circumstances of the present case.

28. So far as Krishna Janardhan Bhat, the ratio

that existence of legally recoverable debt is not matter of

presumption under Section 139 of N.I.Act is over ruled in

Rangappa. Similarly, the ratio in Shiva Murthy that initial

burden is on the complainant to prove existence of legally

recoverable debt is also no longer a good law in the light of

Rangappa. In K.Prakashan, it is held that accused is

required to discharge the rebut the presumption on

preponderance of probabilities. However, the accused has

not rebutted the presumption even by preponderance of

probabilities. Therefore, accused cannot take advantage of

the said decision. In C.Antony, the Hon'ble Supreme Court

discussed the circumstance wherein the Appellate Court can

interfere with the acquittal of accused. Having regard to the

fact that the findings of the Sessions Court are contrary to

the evidence placed on record and as such perverse, this is

a fit case to interfere with the impugned judgment and

order of the Sessions Court and restore the judgment and

order of conviction of the trial Court and accordingly, I

proceed to pass the following:

ORDER

(i) The appeal filed by the complainant is

allowed.

(ii) The impugned judgment and order dated

07.01.2012 in Crl.A.No.626/2011 on the file

of Fast Track (Sessions) Judge-V, Bengaluru

City is set aside.