Karnataka High Court

Srinivas Shetty vs Ganapati Pokku Harikanth on 22 January, 2025

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                                   CRL.A No. 100052 of 2017



 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

     DATED THIS THE      22ND DAY OF JANUARY, 2025

                          BEFORE

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

          CRIMINAL APPEAL NO.100052 OF 2017

BETWEEN:

SRINIVAS SHETTY,
AGE: 61 YEARS,
OCC: AGRICULTURIST, BUSINESS,
R/O: NEAR A.C. OFFICE,
TALUK: KUMTA,
DISTRICT: UTTAR KANNADA.
                                               ...APPELLANT

(BY SRI J.S. SHETTY, ADVOCATE)

AND:

GANAPATI POKKU HARIKANTH,
AGE: 52 YEARS,
R/O: POHILLUR POST,
MAGODA TALUK: ANKOLA.
                                             ...RESPONDENT

(BY SRI S.V. YAJI, ADVOCATE)

       THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C., SEEKING THAT THE ORDER OF ACQUITTAL
DATED 2.12.2016 PASSED BY THE J.M.F.C, KUMTA AT KUMTA,
IN C.C.NO.637/2009, BE SET ASIDE AND THE RESPONDENT
CONVICTED FOR THE OFFENCE PUNISHABLE UNDER SECTION
138 OF THE NEGOTIABLE INSTRUMENT ACT BY ALLOWING
THIS APPEAL WITH COST.
                                  -2-
                                        CRL.A No. 100052 of 2017



     THIS CRIMINAL APPEAL, HAVING BEEN HEARD AND
RESERVED          ON     13.11.2024,      COMING       ON       FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:


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

                         CAV JUDGMENT

(PER: THE HON'BLE MS. JUSTICE J.M.KHAZI)

In this appeal filed under Section 378(4) of Cr.P.C,

complainant has challenged the judgment and order

passed by the trial Court dismissing the complaint filed by

him under Section 200 Cr.P.C against the accused alleging

offence punishable under Section 138 of Negotiable

Instrument Act, 1881 (hereinafter referred to as 'the N.I

Act' for short).

2. For the sake of convenience, parties are

referred to by their ranks before the trial Court.

3. It is contended by the complainant that he and

accused are friends. On 10.10.2008, for the purpose of

business, complainant borrowed hand loan of `1,50,000/-

and issued two cheques dated 09.01.2009 for `75,000/-

each. However, on 12.01.2009 when complainant

presented the cheques for encashment, they were

returned dishonoured on the ground of insufficient funds.

Complainant got issued legal notice dated 09.02.2009

through registered post. Accused has neither paid the

amount due nor sent any reply and hence the complaint.

4. After service of summons, accused appeared

before the trial Court and contested the case by pleading

not guilty.

5. In order to prove the allegations against the

accused, complainant examined himself as PW-1, the

Manager of the drawer bank as PW-2 and one of his friend

as PW-3. He has relied upon Exs.P1. to 8.

6. During the course of his statement under

Section 313 Cr.P.C, accused has denied the incriminating

evidence led by the complainant.

7. Accused has not led any defence evidence.

8. Vide the impugned judgment and order, the

trial Court acquitted the accused.

9. Aggrieved by the same, the complainant is

before the Court contending that the impugned judgment

and order are illegal and not sustainable. It is passed

without proper appreciation of the evidence on record. The

accused has failed to establish that the cheques in

question were lost. He has also failed to prove that the

notice is not served on him. The complainant has produced

postal receipt and also the letter issued by the postmaster

certifying that the envelope addressed to the accused is

duly delivered to him. Such being the case, the trial Court

has erred in holding that there is no due service of notice.

9.1 When the accused admit that the cheques in

question are drawn on his account and they are

dishonoured for want of sufficient funds, burden is on him

to rebut the presumption. However, accused has failed to

rebut the presumption. He has also failed to prove that the

cheques were stolen. In the above facts and

circumstances, the impugned judgment and order of the

trial Court are not sustainable and pray to allow the

appeal, convict the accused and sentence him

appropriately.

10. On the other hand, learned counsel for accused

has supported the judgment and order and sought for

dismissal of appeal.

11. Heard arguments and perused the record.

12. Accused admit that the cheques in question are

issued to his account. However, the accused has

contended that they were stolen. He has also taken a

defence that he has not signed the cheques and

signatures therein are forged. At the trial, he has also

claimed that the notice is not duly served on him and

consequently he has not sent any reply to the legal notice.

13. Therefore, in the light of specific defence put

forth by the accused, before the presumption under

Section 118 and 139 of the N.I Act is drawn, it is

necessary for the complainant to prove that the cheques

bear the signature of accused and after they were

dishonoured for want of sufficient funds, complainant has

sent legal notice and it is duly served on him.

14. At the out set, it is relevant to note that even

though the accused has taken up a specific defence that

the cheques were lost, he has not disclosed whether they

were signed by him when they were lost. Anyhow, having

regard to the fact that accused has also disputed that the

cheques bear his signature, it would have to be taken that

they were not signed by him when they were lost.

However, the accused has failed to prove that the cheques

were lost. He has not intimated the bank about the loss of

cheques and also has not to filed any complaint with the

concerned police.

15. In fact, no suggestion is made to PW-2, who is

the Manager of the drawer bank that the cheques were

lost. Of course, suggestions are made to him that the

signatures therein does not belong to the accused, which

he has denied. Even though PW-2 has stated that he was

not present when accused opened the account with his

bank and that he is not personally aware of his signature,

he has deposed in unequivocal terms that when the

cheques were presented for encashment, on comparison

with his specimen signature maintained with the bank, it is

found that the cheques bear his signature and therefore

they were considered for encashment. Though at the first

instance, PW.2 did not produce the specimen signature

card of the accused, his further evidence was deferred and

on the next date of hearing, he has produced the specimen

signature card of accused and it is marked as Ex.P8. Thus

through the testimony of PW-2 the complainant proved

that the cheques in question bear the signature of

accused.

16. The cheques are dishonoured for want of

sufficient funds. They are not dishonoured on the ground

that the signature therein does not tally with the specimen

signature of the accused maintained with the bank.

Therefore, it is not open to the accused to claim that the

signature on the cheque are not his and this Court has no

hesitation to hold that for the purpose of this case the

accused has taken such false defence.

17. Now coming to the question whether the legal

notice was served on the accused before complaint was

filed. It is pertinent to note that the accused is not

disputing his address to which the legal notice was sent. In

the complaint, also, the same address is given. In the

complaint, the complainant has pleaded that legal notice

was sent to the accused through registered post. However,

he has not produced the postal receipt to show that legal

notice was sent through registered post. Complainant has

produced the receipt for having sent the notice through

speed post under No.EK 388405227 IN. However, the

acknowledgement is not produced. In this regard, the

complainant has addressed a letter to the post master

complaining non-return of speed post articles. He has

received reply at Ex.P7 stating that the notice sent

through speed post EK 3884055227 IN is delivered to the

addressee on 11.02.2009.

18. On this aspect learned counsel for the accused

submitted that the speed post referred to in Ex.P7 is

different from the one through which the legal notice was

sent as per Ex.P6 and therefore the complainant has failed

to prove that the legal notice was sent. It is pertinent to

note that in the speed post while IN refers to India, EK

refers to Electronic mail of Karnataka. Usually the speed

post contain number consisting of 9 digits. In the letter at

Ex.P7 while typing the number of the speed post it appears

by mistake '5' is typed twice. Thus, through Ex.P6 and 7

the complainant has proved that a legal notice was sent to

the accused and it is duly served on him. Admittedly he

has not sent any reply to the legal notice.

19. In this regard during the course of his evidence,

complainant has deposed that in addition to the speed

post, notice was also sent through RPAD and the envelope

is returned and he has handed over the said envelope to

his counsel. However the said postal envelope is not

produced. It is pertinent to note that when the legal notice

is sent, invariably it will be posted from the office address

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of the advocate who has sent it. Therefore, even if it is

returned unserved, it would come back to the advocate

who has sent it. It appears the say of the complainant that

notice was also sent through RPAD and the unserved

postal envelope was returned to him and he has handed it

to his advocate, has no substance. Though the

complainant has denied the suggestion that he is a money

lender, during the course of his cross-examination he has

admitted that he has also filed 2-3 cheque bounce cases in

the same Court. It appears the complainant is engaged in

money lending business without license and was confused

about the return of postal envelope.

20. Having regard to the fact that the accused is not

disputing his address, presumption under Section 27 of the

General Clauses Act is attracted. As per this provision, the

meaning of service by post is - Where any Central Act or

Regulation made after the commencement of this Act

authorized or requires any documents to be served by

post, whether the expression "serve" or either of the

expressions "give" or "send" or any other expression is

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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.

Thus, the complainant proved due service of notice. But,

the Trial Court erred in holding otherwise.

21. When the complainant has proved that the

cheques in question are drawn on the account of the

accused and they bear his signature and when presented

for realization they were returned dishonoured for want of

'sufficient funds', presumption under Section 118 and 139

of the N.I.Act is attracted placing the initial burden on the

accused to rebut the same by establishing that the

cheques were not issued towards repayment of any legally

recoverable debt or liability and the circumstances under

which they have reached the hands of the complainant. As

held by the Hon'ble Supreme Court in Rangappa Vs Sri

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Mohan (Rangappa)1 and Kumar Exports V/s Sharma

Carpets (Kumar Exports)2, it is sufficient for the accused

to probabilise his defence and to rebut the presumption,

after which the burden would shift on the complainant to

prove his case, wherein he is expected to establish the

guilt of the accused beyond reasonable doubt.

22. In APS Forex vs Shakti International Fashion

Linkers Pvt. Ltd (APS Forex)3 and Tedhi Singh Vs Narayan

Das Mahant (Tedhi Singh)4, the Hon'ble Supreme Court

held that despite the presumption under Section 139 of

N.I.Act, when accused dispute the financial capacity of

complainant, the burden would be on the complainant to

prove his financial capacity, after which it would shift on

accused to rebut the presumption. In Tedhi Singh it was

held that when the accused failed to send reply to the legal

notice, challenging the financial capacity of the

complainant, at the first instance the accused need not

prove his financial capacity. However, during the course of

(2010) 11 SCC 441

AIR 2021 SC 1281

(2020) 12 SCC 724

2022 SCC OnLine SC 302

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trial if the accused raises the defence of financial capacity

of the complainant, then it is necessary for the

complainant to prove his financial capacity to lend the loan

to the accused.

23. In APS Forex the Hon'ble Supreme Court held

that whenever accused raises issue of financial capacity of

complainant in support of his probable defence, despite

the presumption in favour of the complainant regarding

legally enforceable debt under Section 139, the onus shifts

again on the complainant prove his financial capacity by

leading evidence, more particularly when it is a case of

giving loan by cash and thereafter issue of cheque.

24. As already noted during the trial, the accused

has challenged the financial capacity of complainant to

lend him a sum of `1,50,000/- by cross-examining PW-1.

Therefore, as per the ratio in APS Forex, despite the

presumption under Section 118 and 139 of the N.I. Act,

the burden would be on the complainant to establish his

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financial capacity. Only after this, again the burden would

shift on the accused to prove his defence.

25. So far as the issue of financial capacity of

complainant is concerned, during the course of his

evidence, he has deposed that he paid `1,50,000/- to the

accused in cash which was available in his house. They

were consist of notes of 100 denomination. At that time he

was doing real estate and second hand tire business. For

five years, he worked in military and for sometime he was

also a medical representative. He was owning a fishing

boat on partnership basis for 20 years. However, he was

not an income tax assessee and has not maintained any

accounts. He has also not made any entry in the diary

regarding the money lent to the accused. At that time, he

was having accounts in Vijaya bank and Canara Bank.

Since it is not the case of the complainant that he had

withdrawn the amount in question from the bank, the fact

that he had maintained account in the banks would also

not be of any help to prove his financial capacity. Despite

the evidence of the complainant about him involved in so

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many allocation work etc he has failed to prove his

financial capacity.

26. One more important aspect which is noteworthy

is that during the course of his evidence, the complainant

has deposed that in addition to issuing the subject

cheques, the accused also executed two bonds. There is no

reference to execution of any bonds by the accused in the

complaint. The said bonds are also not produced. On this

aspect, the complainant has stated that the said bonds are

lost. When the complainant has safely preserved the

subject cheques, it is hard to believe that the bonds which

were executed and given along with the cheques are lost.

The production of said bonds would have lent support to

the case of the complainant.

27. During the course of his evidence, the

complainant has deposed that at the first instance accused

requested loan from PW-3 Mathew P.Y. Since he was not

having the money, at his request, complainant lent

`1,50,000/- to the accused. During the course of his

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evidence, PW-3 Mathew P.Y. has also deposed to this

effect. He has also deposed that along with the cheques,

two bonds were executed by the accused. Certainly, the

production of the said bond would have been helpful to the

complainant to discharge the burden on him. They would

have corroborated the oral testimony of PWs-1 and 3.

Despite the fact that the accused has failed to prove that

the cheques were lost, since the complainant has failed to

prove his financial capacity, the burden would not shift

back to the accused to rebut the presumption.

28. Despite the fact that PW-3 has also deposed

that in his presence, complainant has lent `1,50,000/- to

the accused, in the absence of any documentary evidence

to prove the financial capacity of the complainant, the Trial

Court is justified in not accepting the case of the

complainant. The findings given by the Trial Court is

consistent with the evidence placed on record and as such

there is no perversity calling for interference by this Court.

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29. In the result, the appeal fails and accordingly,

the following;


                              ORDER

     (i)       Appeal     filed    by      the   complainant   is

               hereby dismissed.


     (ii)      The impugned judgment and order dated

               02.12.2016 in C.C.No.637/2009 passed

               by JMFC-Kumta, is hereby confirmed.


     (iii)     Send back the Trial Court records along

               with copy of this order to the concerned

               Court forthwith.




                                               Sd/-
                                           (J.M.KHAZI)
                                              JUDGE


RR
CT: UMD

Pg.No.17 replaced and retyped vide Chamber order dated 29.01.2025.

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