Karnataka High Court

Sri Shantharama Bhandary vs Sri Prasad Rai on 23 February, 2024

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                                        CRL.A.No.908 of 2014


IN THE HIGH COURT OF KARNATAKA AT BENGALURU

  DATED THIS THE 23rd DAY OF FEBRUARY, 2024

                          BEFORE
        THE HON'BLE MR JUSTICE ANIL B KATTI
          CRIMINAL APPEAL No.908 OF 2014 (A)

BETWEEN:

SRI.SHANTHARAMA BHANDARY
S/O.S.G.BHANDARY
AGED ABOUT 61 YEARS
RESIDING AT "SRI VINAYAKA KRIPA"
S.N.TEMPLE ROAD
NAGURI, KANKANADY
MANGALORE-575 002
                                                 ...APPELLANT
(BY SRI.RANJANKUMAR K., ADVOCATE)

AND:

SRI.PRASAD RAI
AGED ABOUT 36 YEARS
S/O.P.N.RAI
R/AT AMARDEEP HOUSE
GANADA HITLU
JEPPINA MOGERU
MANGALORE-575 002
                                               ...RESPONDENT
(BY SRI.PRANESH CHANDRA, ADVOCATE)

       THIS APPEAL IS FILED UNDER SECTION 378 (4) BY CR.P.C.,
PRAYING TO SET ASIDE THE ORDER DATED: 7.6.2014 PASSED BY
THE JMFC-V COURT, MANGALORE, D.K., IN C.C.NO.281/11-
ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE
P/U/S 138 OF N.I. ACT.

       THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
20.02.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT
THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
                                     -2-
                                               CRL.A.No.908 of 2014




                            JUDGMENT

Appellant/complainant feeling aggrieved by judgment

of Trial Court on the file of 5th-JMFC, Mangaluru, D.K. in

C.C.No.281/2011, dated 07.06.2014 preferred this

appeal.

2. Parties to the appeal are referred with their

ranks as assigned in the Trial Court for the sake of

convenience.

3. Heard the arguments of both sides.

4. After hearing arguments of both sides and on

perusal of Trial Court records, so also the impugned

judgment under appeal, the following points arise for

consideration:

1) Whether the impugned judgment under appeal passed by Trial Court for the offence punishable under Section 138 of N.I.Act is perverse, capricious and legally not sustainable?

2) Whether interference of this Court is required?

5. On careful perusal of oral and documentary

evidence placed on record, it would go to show that

accused approached the complainant and requested for

hand loan of Rs.1,00,000/- for his urgent financial

necessity. Complainant through cheque dated 16.04.2010

given Rs.95,000/- and by cash of Rs.5,000/- thus paid

total sum of Rs.1,00,000/- to accused. Accused for lawful

discharge of such debt issued cheque bearing No.887417

dated 20.09.2010 drawn on Andhra Bank, Mangaluru

Ex.P.1. Complainant presented the cheque through his

banker Vijaya Bank, Ullal branch, Mangaluru and the same

was dishonoured as "Account closed". The banker of

complainant has communicated the bank endorsement of

Andhra Bank dated 28.09.2010 Ex.P.2 and the

memorandum of Vijaya Bank is produced at Ex.P.3.

Complainant issued demand notice dated 13.10.2010

through RPAD and UCP Ex.P.4. The postal receipt is sent

through RPAD is produced at Ex.P.5 and UCP receipt is

produced at Ex.P.6. The postal acknowledgement card is

produced at Ex.P.7 and the bank pass book of complainant

is produced at Ex.P.10. If these documents are produced

and appreciated with the oral testimony of PW.1 then it

would go to show that complainant has complied all the

necessary legal requirements in terms of Section 118 and

139 of Negotiable Instruments, Act, 1881(hereinafter for

brevity referred to as "N.I.Act"). Complainant has filed the

complainant on 11.11.2010 within statutory period of time

in terms of Section 142(1)(b) of N.I.Act. Therefore,

statutory presumption in terms of Section 118 and 139 of

N.I.Act will have to be drawn in favour of complainant.

6. In this context of the matter, it is useful to refer

the judgment of Hon'ble Apex Court in APS Forex

Services Pvt. Ltd. Vs. Shakti International Fashion

Linkers and others reported in AIR 2020 SC 945,

wherein it has been observed and held that once the

issuance of cheque with signature on cheque is admitted,

there is always a presumption in favour of complainant

that there exist legally enforceable debt or liability. Plea

by accused that cheque was given by view of security and

same has been misused by complainant is not tenable.

7. It is also profitable to refer another judgment

of Hon'ble Apex Court in P. Rasiya vs. Abdul Nazer and

another reported in 2022 SCC OnLine SC 1131,

wherein it has been observed and held that:-

" Once the initial burden is discharged by the complainant that the cheque was issued by the accused and signature of accused on the cheque is not disputed, then in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for discharge of any debt or other liability. The presumption under Section 139 of N.I. Act is statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the complainant/holder of the cheque, in that case it is for the accused to prove the contrary."

In view of the principles enunciated in the aforementioned

two judgments of Hon'ble Apex Court, it is evident that

when once issuance of cheque with signature of accused

on the account maintained by him is admitted or proved

then statutory presumption in terms of Section 118 and

139 of N.I. Act will have to be drawn. Now, it is up to the

accused to place rebuttal evidence to displace the

statutory presumption available in favour of the

complainant.

8. It is now up to the accused to place rebuttal

evidence to displace the statutory presumption available

in favour of complainant. In the present case accused

apart from relying on the material produced by

complainant also relied on his own evidence as DW.1 and

the document at Ex.D.1. Whether the said rebuttal

evidence placed on record by the accused would be

sufficient to displace the statutory presumption available

in favour of complainant or not has to be decided.

9. It is the defence of accused that he has availed

loan of Rs.28,000/- on 23.08.2007 and at that time given

two blank signed cheque and blank signed bond paper.

One of such cheque has been misused by complainant to

file this false case though he has paid entire money with

interest to complainant. It is true that accused has not

replied to the demand notice by making basic foundation

regarding his defence in denying the claim of complainant

and in issuing cheque Ex.P.1 for lawful discharge of debt.

Accused has also not made any written communication

after his appearance in the case before seeking permission

of Court to cross examine PW.1 on his proposed defence.

However, it is open for the accused to bring all such

material evidence either in the cross-examination of PW.1

or by leading his own evidence to displace the statutory

presumption available in favour of complainant.

10. The Trial Court has acquitted the accused on

the ground that the bank account is standing in the name

of Rashmi Shantharam Bhandary, secondly the account

holder Rashmi Shantharam Bhandary has not been

examined and the demand notice through RPAD is not

served to the accused.

11. It is the contention of accused that demand

notice Ex.P.4 is not duly served to accused. The demand

notice Ex.P.4 is sent to accused through RPAD and UCP on

the correct address of accused shown in the complaint.

The postal receipt for having send RPAD is produced at

Ex.P.5 and the UCP certificate is produced at Ex.P.6. Postal

acknowledgement is produced at Ex.P.7. DW.1 in the

cross-examination admits the address shown in the

vakalath Ex.P.8 and also the address shown in the bond

executed by accused Ex.P.9 after he was released on bail.

On the very same address, the demand notice Ex.P.4 was

issued to the accused. The notice sent through UCP has

not been returned to complainant. Learned counsel for

complainant has argued that the said material evidence on

record would go to show that there is deemed service of

demand notice Ex.P.4 to accused. In support of such

contention reliance is place on the judgment of Hon'ble

Apex Court in C C Alavi Haji vs. Palapatti Muhammed

and Another reported in (2007) 6 SCC 555 wherein it has

been observed and held in para 13 and 14 as under :

"13. According to Section 114 of the Act, read with Illustration (f) thereunder, when it appears to the court that the common course of business renders it probable that a thing would happen, the court may draw presumption that the thing would have happened, unless there are circumstances in a particular case to show

that the common course of business was not followed. Thus, Section 114 enables the court to presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business in their relation to the facts of the particular case. Consequently, the court can presume that the common course of business has been followed in particular cases. When applied to communications sent by post, Section 114 enables the court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. But the presumption that is raised under Section 27 of the GC Act is a far stronger presumption. Further, while Section 114 of the Evidence Act refers to a general presumption, Section 27 refers to a specific presumption. For the sake of ready reference, Section 27 of the GC Act is extracted below:

"27. Meaning of service by post.- Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the

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expression 'serve' or either of the expression 'give' or 'send' or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."

14. Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This Court has already held that when a notice

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is sent by registered post and is returned with a postal endorsement "refused" or "not available in the house" or "house locked" or "shop closed" or "addressee not in station", due service has to be presumed. (Vide Jagadish Singh v. Natthu Singh; State of M.P. v. Hiralal and V.Raja Kumari v. P.Subbarama Naidu). It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved."

12. Learned counsel for complainant also relied on

another judgment of Hon'ble Apex Court in Basant Singh

and Another Vs. Roman Catholic Mission reported in

(2002) 7 SCC 531, wherein it has been observed and

held as under:

"Order 5 Rule 19-A (2) CPC-Service of summons by Registered Post; Declaration by Court in case of non receipt of acknowledgement within 30 days- Held conduct of defendant acquires importance, once it is proved that summons has been sent by registered post to a correct and given address- Further held, bald assertion without evidence that

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registered letter was not tendered would not be sufficient to discharge the statutory burden cast on the defendant".

Learned counsel for complainant also placed reliance

on the Co-ordinate Bench Judgment of this Court in

P.K.Radha Krishnan Vs. Vijayan Nambiar reported in

2005 KAR 4486, wherein, it has been observed and held

as under:

" The accused has not placed any material on record to establish that the address to which the legal statutory notice was sent, was not correct. The address of the accused has not been disputed. Therefore, it is crystal clear that the complainant has complied with the requirements, as required under Section 138 of the Act."

In the present case also accused has not disputed the

correctness of the address shown in the complaint and in

the demand notice Ex.P.4, so also the address shown in

Exs.P.8 and 9. Therefore, in view of the principles

enunciated in the aforementioned judgments, it will have

to be held that there is deemed service of demand notice

to the accused. Hence, the contention of accused that

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there is no proper service of demand notice Ex.P.4

cannot be legally sustained.

13. It is the specific case of complainant that he

has paid Rs.95,000/- by way of cheque on 16.04.2010

and given cash of Rs.5,000/- and thus paid Rs.1,00,000/-

to accused. Complainant in support of such contention

produced pass book of Vijaya Bank on the account

maintained by him and the relevant entry Ex.P.10(a)

regarding issuance of cheque bearing No.908754 to

accused for Rs.95,000/-, further the cheque amount has

been realized by accused. The Trial Court has recorded

finding that the said account in Vijaya Bank Ex.P.10 is

belongs to Rashmi Shantharam Bhandary and she has not

been examined. On perusal of the pass book Ex.P.10, it

would go to show that savings bank account stands jointly

in the name of Rashmi and Shantharam Bhandary.

Therefore, the complainant has every authority to issue

the cheque on the joint account maintained by him with

his wife. If at all the accused is not satisfied with the

correctness of joint account held by complainant and his

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wife and he did not realize the proceeds under the cheque

bearing No.908754 then nothing has prevented the

accused to examine the bank Manager to disprove the

correctness and the authenticity of the entries found in

the pass book Ex.p.10. Therefore, the mere denial of

transaction by accused without producing any foundation

document to substantiate his contention, the claim of

accused that he did not realize the cheque amount shown

in Ex.P.10(a) cannot be legally sustained.

14. It is the evidence of DW.1 that he had taken

loan of Rs.28,000/- on 23.08.2007 and at the time of

taking loan issued two blank signed cheque and signed

blank bond paper. One of such cheque has been misused

by complainant though he has repaid the entire amount

due to the complainant with interest. In support of such

contention reliance is placed on pass book of Corporation

Bank standing in the name of accused. The relevant entry

having paid the amount of Rs.1,800/- to the complainant

through cheque bearing No.505011 dated 27.11.2007 is

marked at Ex.D.1(a). If at all the accused has paid the

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entire amount even according to him relating to previous

transaction then also accused has offered no any

explanation as to what happened to another blank signed

cheque and blank signed bond paper. There is also no any

explanation as to why accused has kept quite till the date

of he is giving evidence before the Court for nearly seven

years without taking any steps against complainant for

withholding the blank signed cheque in spite of accused

having paid the entire amount with interest. The in action

on the part of accused for more than about seven years

will create serious doubt on the defence taken by accused

as referred above. In view of the material evidence relied

by accused from the cross-examination of PW1. and that

of his own evidence DW.1 accused has failed to probabilse

his defence. On the contrary complainant has produced

reliable evidence to prove that he has paid Rs.95,000/-

through cheque evidenced under pass book Ex.P.10 and

paid remaining amount of Rs.5,000/- by cash, thus paid

totally an amount of Rs.1,00,000/- to accused. In terms

of Section 118(a) of N.I.Act, when issuance of cheque on

the account maintained by accused with his signature is

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proved by complainant then presumption will have to be

drawn regarding passing of consideration covered under

the cheque Ex.P.1. The accused by virtue of above

referred evidence on record has failed to probabilise his

defence to prove the non existence of legally enforceable

debt. The cheque Ex.P.1 was issued by accused for lawful

discharge of debt and the same was dishonoured as

"Account closed" by the drawer of the cheque. The closure

of account by accused after issuance of cheque will also

attract penal action in terms of Section 138 of N.I.Act

unless the contrary is proved by accused. In the present

case accused has failed to place any contrary evidence

that cheque in question Ex.P.1 was not issued for legally

enforceable debt. Therefore, it will have to be held that

complainant has proved that accused has committed the

offence punishable under Section 138 of N.I.Act. The

contrary findings recorded by Trial Court on the grounds

referred above cannot be legally sustained, since the said

findings are against the evidence on record.

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15. The question now remains regarding imposition

of sentence. The Court while imposing the sentence will

have to take into consideration the offence committed by

accused, the nature of evidence placed on record and the

other attending circumstances in issuing the cheque

covered under Ex.P.1. In view of the facts and

circumstances of the present case and the evidence

placed on record are taken into consideration, then if the

accused is sentenced to pay a fine of Rs.1,10,000/- and in

default of payment of fine sentenced to undergo simple

imprisonment for a period of 3 months is ordered will

meet the ends of justice. Consequently, proceed to pass

the following:

ORDER

Appeal filed by appellant/complainant is here by

allowed.

The judgment of Trial Court on the file of 5th-JMFC,

Mangaluru, D.K. in C.C.No.281/2011, dated 07.06.2014 is

hereby set aside.

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Accused is convicted for the offence punishable under

Section 138 of N.I.Act and sentenced to pay a fine of

Rs.1,10,000/- and in default of payment of fine shall

undergo simple imprisonment for a period of 3 months.

In exercise of power under Section 357 of Cr.P.C.,

out of the fine amount Rs.1,05,000/- is ordered to be

given to complainant as compensation and remaining

Rs.5,000/- is ordered to be defrayed as prosecution

expenses.