Karnataka High Court
Sri. Umesh D M vs Sri. Manjunath M on 27 May, 2024
1 CRL.A NO.1050 OF 2018
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF MAY, 2024
BEFORE
THE HON'BLE MS.JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.1050 OF 2018
BETWEEN:
SRI. UMESH D M
S/O MARICHANNAIAH,
AGED ABOUT 34 YEARS
R/A NO.244, JANARDHANA COLONY,
PANATHUR, KOTTANOOR POST,
BENGALURU - 560 087.
......APPELLANT
(BY SRI. P JAGANNATHAN, ADVOCATE)
AND:
SRI. MANJUNATH M.
S/O MUNISWAMY,
AGED ABOUT 38 YEARS,
RESIDING AT NO.321, 7TH CROSS,
SRI. KRISHNADEVARAYA ROAD,
LAKSHMIPURAM,
BENGALURU - 560 019.
.......RESPONDENT
(BY SRI. ARUN G, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT
PASSED IN C.C.NO.9638/2017 DATED 19.04.2018,
SUBMITTED AS ANNEXURE-A ON THE FILE OF XXII
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE AT
BENGALURU BY ALLOWING THE SAID APPEAL AND
CONSEQUENTLY CONVICT THE ACCUSED AS PRAYED FOR
AND PASS SUCH OTHER RELIEF OR RELIEF/S AS THIS
HON'BLE COURT DEEMS FIT TO IN FAVOUR OF THE
APPELLANT AND AS AGAINST THE RESPONDENT TO MEET
THE ENDS OF JUSTICE.
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
12.03.2024, COMING ON FOR PRONOUNCEMENT OF
2 CRL.A NO.1050 OF 2018
JUDGMENT THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
JUDGMENT
In this appeal filed under Section 378 (4) of Cr.P.C,
complainant has challenged the acquittal of
respondent/accused for the offence punishable under
Section 138 of Negotiable Instruments Act, 1881 (for
short 'N.I Act').
2. For the sake of convenience, parties are
referred to by their rank before the trial Court.
3. It is the case of the complainant that he and
accused are relatives, their mothers being sisters. During
the last week of October 2016, accused approached the
complainant for a hand loan of Rs.4,12,000/- with a
promise to repay the same with interest at 24% per
annum, within a period of three months. On 06.11.2016,
the complainant has advanced hand loan of
Rs.4,12,000/-. In this regard, accused has executed a
demand promissory note-cum-consideration receipt
dated 06.11.2016. However, accused failed to repay the
amount as promised and after repeated request and
demand, he issued cheque dated 05.01.2017 for
Rs.4,12,000/-. Accordingly on 05.01.2017, when
complainant presented the cheque for encashment, it
was returned dishonoured with an endorsement "Funds
insufficient". Despite the said fact was brought to the
notice of accused, he did not choose to pay the amount
due. Therefore, on 01.02.2017, complainant got issued a
legal notice to the accused through RPAD and speed
post. After due service of notice, the accused has neither
paid the amount due nor sent any reply. In the legal
notice, by mistake the cheque date was noted as
07.01.2017 instead of 05.01.2017 and therefore
complainant has sent a corrigendum dated 16.02.2017
and hence the complaint.
4. After service of summons, the accused has
appeared through counsel and contested the case by
pleading not guilty.
5. In order to prove the allegation against the
accused, complainant has examined himself as PW-1 and
got marked Ex.P1 to 11.
6. During the course of his statement under
Section 313 Cr.P.C, the accused has denied the
incriminating evidence led by the complainant.
7. Accused has not led any oral or documentary
evidence.
8. Vide the impugned judgment and order, the
trial Court acquitted the accused by holding that
complainant has failed to prove the allegations against
him.
9. Being aggrieved by the same, complainant
has filed this appeal, contending that the impugned
judgment and order is perverse, one sided and against
the principles of natural justice. Despite there being
sufficient evidence to hold the accused guilty, the trial
Court has chosen to dismiss the complaint. The findings
of the trial Court are based on presumptions and
assumptions. Throughout the judgment, the trial Court
has only discussed about the financial capacity of
complainant shifting the entire burden on him, despite
there being presumption operating in his favour.
9.1 The trial Court has also committed grave
error in not accepting the case of the complainant for the
reason that he has not chosen to examine his mother as
well as the attesting witness to the demand promissory
note. It has also erred in not accepting the case of the
complainant because there is difference in the ink in the
signature of the complainant and remaining writing in
the cheque. Viewed from any angle, the impugned
judgment and order are not sustainable and calls for
interference by this Court.
10. In support of his arguments, learned counsel
for complainant has relied upon the following decisions:
(i) APS Forex vs Shakti International Fashion
Linkers Pvt. Ltd (APS Forex)1
(ii) Rajesh Jain Vs. Ajay Singh (Rajesh Jain)2
(2020) 12 SCC 724
AIR 2023 SC 5018
11. On the other hand, learned counsel for
accused supported the impugned judgment and order
and submitted that after thorough examination of oral
and documentary evidence placed on record, the trial
Court has come to a correct conclusion that the
complainant has failed to prove the allegations against
the accused, including the financial capacity of the
complainant to lend huge sum of Rs.4,12,000/- and pray
to dismiss the appeal also.
12. In support of his arguments, learned counsel
for accused has relied upon the following decisions:
(i) Rajaram (Since deceased) through LRs Vs.
Maruthachalam (Since deceased) through
LRs (Rajaram)3
(ii) Sivakumar Vs. Natarajan (Sivakumar)4
(iii) Dr.Geetha Vs. Vasanthi S.Shetty
(Dr.Geetha)
13. Heard elaborate arguments of both sides and
perused the record.
2023 LiveLaw (SC) 46
(2009) 13 SCC 623
ILR 2010 KAR 3669
14. Before going to the merits of the case, it is
necessary to examine whether the legal notice is served
on the accused or not, since during the cross-
examination of complainant, a suggestion is made that
complainant has received the legal notice by
misrepresenting the postman that he is the accused and
therefore legal notice is not served on him. Of course
complainant has denied the said suggestion. It is
pertinent to note that the accused is not disputing his
address given in the complaint as well as in the legal
notice. The legal notice sent through RPAD as well as
through speed post are served on the accused and the
acknowledgement bear his signature.
14.1 As per Section 27 of the General Clauses
Act, where any Central Act or Regulation authorise or
require any document be served by post, whether the
expressions serve or either of the expressions give or
send or any other expression is used, then, unless a
different intention appears, the service shall be deemed
to be affected by properly addressing, prepaying 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 the post. In the light
of this provision, it shall be deemed that the legal notice
is duly served on the accused, placing the burden on him
to prove otherwise.
14.2 It is not the case of the accused that had the
legal notice served on him, he would have paid the
amount due under the cheque. In C.C.Alavi Haji Vs.
Palapetty Muhammed and Anr. (Alavi Haji)6, the
Hon'ble Supreme Court held that when accused claimed
that notice was not served on him, he can within 15 days
of service of notice of the complaint, make payment of
the cheque amount and request the Court to dismiss the
complaint. He cannot contend that notice was not served
on him, as the object of the issue of notice is to provide
opportunity to the innocent drawer to correct his
mistake.
(2007) 6 SCC 555
15. It is pertinent to note that complainant has
sent the legal notice to the accused on 25.01.2017 and it
is served on him on 01.02.2017. Therefore, accused had
time until 16.02.2017 to pay the amount due or send
reply. After the expiry of said 15 days, within a period of
one month, complainant is required to file the complaint.
Therefore, the complainant is required to file the
complaint on or before 18.03.2017. Since there was a
mistake in the legal notice while referring to the date of
the cheque as 07.01.2017 instead of 05.01.2017, the
complainant has sent corrigendum on 16.02.2017. It is
argued by the learned counsel for accused that to bring
the complaint within the period of limitation, the
corrigendum is issued. The order sheet reveal the date of
registration is 14.03.2017. Therefore, the complaint is
filed within limitation from the date of legal notice and
the complainant has not gained any advantage of
limitation by sending the corrigendum.
16. In Sivakumar, on facts, the Hon'ble Supreme
Court held that the legal notice was not issued within a
period of 30 days from the date of receipt of intimation
from the Bank. Therefore, it is not applicable to the case
on hand. In Dr.Geetha, on facts, it was held that as per
the law before the amendment to clause (b) of proviso to
Section 138 of N.I. Act, the notice was required to be
issued within 15 days from the date of receipt of
information and complainant could not take advantage of
the amendment. As noted earlier, in the present case,
the legal notice was issued on 25.01.2017 and it is
served on accused on 01.02.2017 and after expiry of 15
days notice period, within one month complaint is filed.
Therefore, this decision is also not applicable to the case
on hand.
17. Now coming to the merits of the case.
Accused is not disputing that the subject cheque is
drawn on his account, maintained with his banker and it
bears his signature. Consequently, the presumption
under Section 138 of N.I Act is operating in favour of the
complainant that the subject cheque is issued towards
repayment of any legally recoverable debt or liability,
placing the initial burden on the accused to prove that it
is not issued towards repayment of any legally
recoverable debt or liability and on the other hand, the
circumstances in which it has reached the hands of
complainant.
18. Despite service of notice through RPAD as well
as through speed post, the accused has not sent any
reply to the complainant. Consequently, he has not
disclosed his defence at the earliest available opportunity
and also not challenge the financial capacity of the
complainant. However, at the trial, the accused has
challenged the financial capacity of the complainant by
cross-examining him as to the source of income. In Tedhi
Singh Vs Narayan Das Mahant (Tedhi Singh)7, the
Hon'ble Supreme Court held that where the accused has
failed to send reply to the legal notice, challenging the
financial capacity of the complainant, at the first instance,
complainant need not prove his financial capacity.
However, at the trial if the financial capacity of
2022 SCC OnLine SC 302
complainant is challenged, then it is for the complainant
to prove the same.
19. Having regard to the fact that the cheque in
question belongs to accused, drawn on his account
maintained with his banker and it bears hise signature,
presumption under Section 139 of the N.I Act is operating
in favour of the complainant, placing the initial burden on
the accused to prove that the cheque was not issued
towards repayment of any debt or liability and on the
other hand to establish the circumstances in which the
cheque has reached the hands of the complainant.
20. In John K.Abraham Vs. Simon C. Abraham &
Anr (John K.Abraham)8, the Hon'ble Supreme Court
held that in order to draw presumption under Sections
118 and 139 of N.I Act, the burden lies on the
complainant to show that:
(i) She had the requisite funds for advancing
the sum of money/loan in question to
accused.
(2014) 2 SCC 236
(ii) The issuance of cheque by accused in
support of repayment of money advanced
was true and
(iii) The accused was bound to make payment
as had been agreed while issuing cheque in
favour of the complainant.
21. In APS Forex vs Shakti International Fashion
Linkers Pvt. Ltd (APS Forex)9, the Hon'ble Supreme
Court held that when accused raises issue of financial
capacity of complainant, in support of his probable
defence, despite presumption operating in favour of
complainant regarding legally enforceable debt under
Section 139 of N.I. Act, onus shifts again on the
complainant to prove his financial capacity by leading
evidence, more particularly when it is a case of giving
loan by cash and thereafter issue of cheque.
22. In Vijay Vs. Laxman and Anr (Vijay)10,
K.Subramani Vs. K.Damadara Naidu (K.Subramani)11
(2020) 12 SCC 724
(2013) 3 SCC 86
(2015) 1 SCC 99
and K.Prakashan Vs. P.K.Surenderan (K.Prakashan)12,
also the Hon'ble Supreme Court held that the
presumption under Section 139 of N.I. Act, is a rebuttable
presumption and when accused rebut the same by
preponderance of probabilities, it is for the complainant to
prove his case beyond reasonable doubt including the
financial capacity.
23. In Rajaram, referred to supra, also the
Hon'ble Supreme Court held that Section 139 of N.I. Act
mandates a presumption that the cheque was for the
discharge of any debt or other liability placing the onus
on the accused to raise a probable defence. The standard
of proof of rebutting the presumption is that of
preponderance of probabilities. In order to rebut the
presumption the accused may lead evidence or may rely
upon the evidence led by the complainant. It also held
that the scope of interference in an appeal against
acquittal is limited. Unless and until the impugned order
(2008) 1 SCC 258
passed by the trial Court is perverse, the High Court is
not justified in interfering with the same.
24. Keeping the ratio in the above decisions in
mind, it is necessary to examine whether the
complainant was having financial capacity to advance
Rs.4,12,000/- to the accused and in this regard, he has
executed the demand promissory note-cum-
consideration received and also issued the subject
cheque towards repayment of the same. The cross-
examination of complainant reveal that he is an auto
rickshaw driver getting income of Rs.300/- per day which
comes to around Rs.9,000/- to Rs.10,000/- per month.
Since, he is running the autorickshaw run on rental
basis, he is required to pay a part of his income to the
owner of the autorickshaw. Complainant has also
claimed that he is also running a hotel in Push Cart which
is being run by a boy employed by him. In the light of
his testimony that every day from 5-00 a.m to 5-00 p.m,
he runs the autorickshaw, it is doubtful whether he is
also able to run the hotel. Of course, he has not
produced any evidence to prove his exact income from
the autorickshaw as well as Push cart hotel.
25. When questioned whether he is having any
documents to show that he was in possession of cash in
sum of Rs.4,12,000/-, the complainant has specifically
deposed that he is not having any evidence to establish
the said fact. In the complaint, the complainant has
pleaded that after three months when accused fail to
repay the amount and on his repeated request and
demand, he issued the subject cheque. However, during
his cross-examination, complainant has stated that
accused issued the cheque on the same day when he
paid Rs.4,12,000/- by way of hand loan.
26. When the complainant has claimed that his
mother was present when he paid hand loan to the
accused and also contend that in the presence of two
witnesses, accused has executed the demand promissory
note-cum-consideration receipt, he could have examined
these witnesses to corroborate his claim. For reasons
best known to him, the complainant has not chosen to
do so. When the complainant has claimed that he paid
the hand loan to the accuses in cash and when accuses
has challenged his financial capacity, as held by the
Hon'ble Supreme Court in APS Forex, despite the
presumption under Section 139 of N.I Act, the initial
burden is on the complainant to prove his financial
capacity, only after which the burden would shift on the
accused.
27. Taking into consideration the oral and
documentary evidence placed on record, the trial Court
has come to a correct conclusion that complainant has
failed to prove the allegations against accused and
acquitted him. This Court finds no justifiable grounds to
interfere with the conclusions arrived at by the trial
Court. In the result, the appeal fails and accordingly, the
following:
ORDER
(i) Appeal filed by the complainant under
Section 378(4) of Cr.P.C. is dismissed.
(ii) The impugned judgment and order dated
19.04.2018 in C.C.No.9638/2017 on the
file of XXII ACMM, Bengaluru, is hereby
confirmed.
(iii) The Registry is directed to send back the
trial Court records along with copy of this
judgment forthwith.
Sd/-
JUDGE
RR
