Kerala High Court

Unknown vs By Advs on 17 March, 2021

              IN THE HIGH COURT OF KERALA AT ERNAKULAM

                              PRESENT

            THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN

                                 &

               THE HONOURABLE MRS. JUSTICE M.R.ANITHA

 WEDNESDAY, THE 17TH DAY OF MARCH 2021 / 26TH PHALGUNA, 1942

                        CRL.A.No.41 OF 2005

     CRA 17/2002    OF ADDITIONAL SESSIONS COURT, KOZHIKODE

            Crl.L.P. 842/2004 OF HIGH COURT OF KERALA


APPELLANT

               K.BASHEER
               ANADATHIL,OPP.POOVANNUR MASJID, RAMANATTUKARA,,
               KOZHIKODE.

               BY ADVS.
               SRI.A.RANJITH NARAYANAN
               SRI.S.K.SAJU
               SRI.G.SREEKUMAR (CHELUR)

RESPONDENTS

      1        C.K.USMAN KOYA
               S/O LATE ALASSAN,O.K. HOUSE, RAMANATTUKARA,
               KOZHIKODE.

      2        STATE OF KERALA REP. BY THE
               PUBLIC PROSECUTOR, HIGH COURT OF KERALA,
               ERNAKULAM.

               R1 BY ADV. SRI.K.M.FIROZ


OTHER PRESENT:

               SENIOR PUBLIC PROSECUTOR SRI.S.U.NAZAR

     THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 22-02-
2021, THE COURT ON 17-03-2021 DELIVERED THE FOLLOWING:
 Crl.A.No.41 of 2005
                                       2

                                  JUDGMENT

Dated : 17th March, 2021

1. This Appeal is filed against the order of acquittal in

Criminal Appeal No.17/2002 on the file of Additional

Sessions Court, Kozhikode. The first appellate court

reversed the conviction and sentence passed under

Sec.138 of the Negotiable Instruments Act, 1881

(hereinafter 'the Act') and acquitted the respondent

(hereinafter 'the accused'). A learned Single Judge having

come across conflicting opinions in Divakaran v. State of

Kerala (2016 (4) KLT 233) and Surendra Das B. v.

State of Kerala (2019 (2) KLT 895), the case was

referred for resolution of conflict to the Division Bench.

2. The case of the appellant (hereinafter 'the complainant')

is that accused owed an amount of Rs.30,00,000/- to the

complainant and in discharge of the liability, issued Ext.P1

cheque. On presentation of the cheque for collection, it

was returned due to 'insufficiency of funds' in the account Crl.A.No.41 of 2005

of the accused. Statutory notices were issued in the

residential as well as office address of the accused. In

spite of receipt of notices, accused neither responded nor

paid up the money. The complainant was examined as

Pw1 and Exts.P1 to P6 marked and the accused examined

himself as Dw1 and the Branch Manager as Dw2, marking

Ext.D1 to D7 in defence.

3. In Divakaran a learned Single Judge held that the nature

and date of transaction and the date of issuance of cheque

are material facts; which if not disclosed in the statutory

notice, the doors of the Court would be closed for such

'fortune seekers'. It was held that an accused, in a

complaint filed under Sec.142 of the Act, is entitled to

know before trial the material particulars of the

accusation levelled; suppression of which would entail

acquittal, without anything more.

4. Whereas in Surendra Das another learned Single Judge

of this Court held that omission or error in the notice to

state the nature of debt or liability does not render it

invalid. It was noticed that no form is prescribed under Crl.A.No.41 of 2005

clause (b) of proviso to S.138 of the Act and it was found,

there is no requirement under Sec.138 of the Act that the

complainant must specifically allege the nature of the

debt or liability and a demand as specified in clause (b) of

Section 138 would suffice.

5. Noticing the conflict of opinion in the decisions and

doubting Divakaran, the issue referred was as to

whether without full disclosure of the details of the

transaction in the notice of demand; ie: of what

constitutes valid consideration, the statutory notice would

be rendered invalid or not. At the outset we notice a

Division Bench decision of this Court in Kallara

Sukumaran v. Union of India (1987 (1) KLT 226)

which held that a single Judge is not empowered to refer

a question of law alone and the entire case has to be

referred. We would hence attempt to resolve the conflict

first and then look at the merits of the appeal.

6. According to the complainant, the dictum laid down in

Divakaran is against the settled position of law laid down

by the Apex Court in various decisions and also of this Crl.A.No.41 of 2005

Court and hence ought to be reversed. The respondent

argues for reversing Surendra Das, so as to sustain the

order of acquittal.

7. Chapter XVII was inserted in the Act, as per Act 66 of

1988 introducing S.138 to S.147. The very object of

introduction of Chapter XVII was to encourage the use of

cheques and enhance the credibility of the instrument,

with adequate safeguards to prevent harassment of

honest drawers. The amendment foresaw the

development of businesses, in the wake of opening up of

the economy and ensured an effective and quick remedy

quite distinct from the existing cumbersome procedure

and deterrent penalties.

8. Sec.138, takes in every cheque drawn by a person,

maintaining an account with a banker, to another person

in discharge of a liability, either in whole or part. It

contemplates the contingency of dishonour of the cheque

issued, due to insufficiency of funds or exceeding the

arrangement with the banker when an offence is deemed

to have been committed; with penalty of imprisonment Crl.A.No.41 of 2005

extending to a period of two years or/and fine.

9. The provisos stipulate three conditions for attraction of

the section. Proviso (a) stipulates the time within which a

cheque is to be presented as six months from the date on

which it is drawn or within the period of validity,

whichever is earlier. Proviso (b) brings in a condition of

demand being made in writing to the drawer within 30

days of receipt of information of dishonour, prior to the

filing of the complaint. Proviso (c) enables the drawer to

pay the amount covered by the cheque within 15 days

failing which alone the complainant gets a right to

prosecute. Proviso (c) and the Explanation that the debt

or liability should be legally enforceable, are safeguards

for the drawer. Section 139 is the heart and soul of the

newly introduced scheme which statutorily provides a

presumption in favour of the holder that the cheque is

received for discharge of a debt or other liability, in whole

or part; unless the contrary is proved. The compelling

argument against Divakaran is that it renders otiose

Section 139.

Crl.A.No.41 of 2005

10. Sec.140 of the Act expressly bars the drawer from taking

a defence that at the time of drawing the cheque, it was

without knowledge (anticipating) of dishonour on

presentation. That is a protection to the payee

prohibiting an unnecessary defence to wriggle out from

the liability once the cheque is issued in the account

maintained with a banker.

11. Sec.142 of the Act deals with the procedure for taking

cognizance of offences and makes mandatory a written

complaint by the payee or the holder in due course, within

a month of the date on which the cause of action arose. It

starts with a non obstante clause which excludes the

procedure under the Code of Criminal Procedure. Sec.143

of the Act further empowers the Court to try the cases

summarily. Sec.143A inserted by Amendment Act, 2018

with effect from 1.9.2018 also confers power on the

Courts to direct payment of compensation. Sec.145

empowers the Magistrate to take evidence on affidavits.

The provisions above referred clearly indicate the

intention of the Parliament to have a speedy procedure for Crl.A.No.41 of 2005

taking cognizance, conduct of trial and imposition of

penalties. In other words, the procedure prescribed under

the Cr.P.C has been expressly excluded by the Parliament

by insertion of Chapter XVII.

12. Harihara Krishnan N. v. J. Thomas (2017 (4) KHC

699) arose in the context of an application for impleading

being allowed during the course of trial which was upheld

by the High Court. The accused took up the matter before

the Apex Court wherein the scope and ambit of

prosecution under Sec.138 of the Act as distinctly

opposed to that of the Crl.P.C was discussed. Paragraph

No.23 is relevant in this context which reads as follows :

"The scheme of the prosecution in punishing under S.138 of the Act is different from the scheme of the Cr.P.C. S.138 creates an offence and prescribes punishment. No procedure for the investigation of the offence is contemplated. The prosecution is initiated on the basis of a written complaint made by the payee of a cheque.

Obviously such complaints must contain the factual allegations constituting each of the ingredients of the offence under S.138. Those ingredients are (1) that a person drew a cheque on an account maintained by him with the banker; (2) that such a cheque when presented to the bank is returned by the bank unpaid; (3) that such a cheque was presented to the bank within a period of six Crl.A.No.41 of 2005

months from the date it was drawn or within the period of its validity whichever is earlier; (4) that the payee demanded in writing from the drawer of the cheque the payment of the amount of money due under the cheque to payee; and (5) such a notice of payment is made within a period of 30 days from the date of the receipt of the information by the payee from the bank regarding the return of the cheque as unpaid. It is obvious from the scheme of S.138 that each one of the ingredients flows from a document which evidences the existence of such an ingredient. The only other ingredient which is required to be proved to establish the commission of an offence under S.138 is that in spite of the demand notice referred to above, the drawer of the cheque failed to make the payment within a period of 15 days from the date of the receipt of the demand. A fact which the complainant can only assert but not prove, the burden would essentially be on the drawer of the cheque to prove that he had in fact made the payment pursuant to the demand."

13. What emerges from the above is that, a complaint filed

under Sec.138 of the Act should contain factual

allegations regarding the five ingredients underlined in

the extract above. Those are : (i) the cheque drawn in a

valid account by the holder, (ii) its presentation within six

months or validity period; whichever is earlier, (iii)

dishonour, (iv) demand by the payee or holder in due

course, (v) which demand is within 30 days of dishonour. Crl.A.No.41 of 2005

It is also held that all these ingredients are imbibed in

Sec.138 of the Act itself. The only fact which has to be

proved in addition to attract the offence under Sec.138 is

that in spite of the demand of notice, the drawer of the

cheque failed to make payment within 15 days from the

date of receipt of the demand.

14. The legislative intention is to overcome the cumbersome

procedure of filing police report or complaint and

subsequent enquiry or investigation etc., in matters of

cheque dishonour. It also seeks to avoid the filing of a civil

suit and a further execution for realisation of the decretal

amount. This is the reason why Proviso (b) to Sec.138

provides that once the cheque is returned on presentation

for reason of insufficiency of funds or for exceeding the

arrangement, the payee or the holder in due course may

make a demand for payment of money by giving a notice

in writing to the drawer of the cheque, but within 30 days

of the receipt of information of dishonour from the Bank.

Time frame prescribed under the proviso further is an

indication to ensure the bonafides of the drawee. Crl.A.No.41 of 2005

15. We may also place reliance on Central Bank of India &

Anr. v. M/s. Saxons Farms & Ors. [AIR 1999 SC

3607 : 1999 KHC 622], wherein it has been

categorically held that no form of notice is prescribed

under Clause (b) of the proviso to Section 138 of the Act.

Paragraph No.8 of the said judgment is relevant in this

context to be extracted, which reads as follows:

"8. The object of notice is to give a chance to the drawer of the cheque to rectify his omission and also to protect honest drawer. Service of notice of demand in Clause (b) of the proviso to S.138 is a condition precedent for filing a complaint under S.138 of the Act. In the present appeals there is no dispute that notices were in writing and these were sent within fifteen days of receipt of information by the appellant bank regarding return of cheques as unpaid. Therefore, only question to be examined whether in the notice there was a demand for payment."

16. The learned counsel for the complainant placed reliance

on Vijay v. Laxman (2013 (3) KLT 157 [SC] ) which

was relied on in Divakaran. Vijay, by another two judge

Bench was earlier to Harihara Krishnan and proceeded

on peculiar facts. There the S.L.P was against the

acquittal of an accused in a complaint instituted u/s.138 of Crl.A.No.41 of 2005

the Act. The case of the complainant was that accused

borrowed an amount of Rs.1,15,000/- from the

complainant for his personal needs and in repayment

issued a cheque, which stood dishonoured, on account of

insufficient funds. The defence of the accused, a villager,

was that he used to supply milk at the dairy of the

complainant's father, to ensure which advance payments

were made. The dairy owner obtained blank cheques from

the suppliers as security; to prove which an independent

witness was also examined. In the course of settlement of

accounts the accused asked for return of the blank

cheque issued which led to an altercation leading to the

accused lodging an FIS against the assault committed on

him. As a counter blast, the cheque was presented for

encashment. In the said fact situation, it was observed

that although the respondent failed to prove that the

cheque was not signed by him, there appears to be a

glaring loophole in the case of the complainant who failed

to establish the cheque having been issued by the accused

towards repayment of a personal loan. There the Crl.A.No.41 of 2005

complaint was lodged by the complainant without

specifying the date on which loan was advanced. The

complainant himself admitted that the cheque was issued

assuring repayment of the loan in two months and the

cheque was presented on the date shown on it. It was in

the said circumstances that the omission to mention the

date on which the loan was advanced was found to be

fatal to the complainant's case. We cannot discern a

dictum laid down by the Apex Court that in every

complaint the nature of the transaction has to be

disclosed in the notice of demand for initiating a

prosecution under Section 138 to enable the accused to

effectively defend himself and suppression of such

particulars is sufficient to order acquittal.

17. In Harihara Krishnan Apex Court noticed the scheme

of prosecution under Sec.138 of the Act to be different

from that in the Cr.P.C. No procedure for investigation of

an offence is contemplated and a complaint must contain

the factual allegations constituting each of the ingredients

of the offence under Sec.138. The ingredients have Crl.A.No.41 of 2005

already been referred to in the preceding paragraphs. At

best these are the bare facts that should find a place in

the statutory notice of demand.

18. Surendra Das actually arose in a petition filed under

Sec.482 Cr.P.C to quash the proceedings instituted upon a

complaint filed under Sec.142 of the Act. While disposing

that matter, the learned Single Judge quoted Harihara

Krishnan to hold that there is no requirement that the

complainant must specifically allege in the complaint that

there was a subsisting liability and it was also held that

the omission or error in the notice to mention the nature

of debt or liability does not render it invalid. One of the

grounds raised in support of the petition for quashing the

prosecution initiated was that no proper notice was sent

by the complainant since nature of the debt or liability

was not mentioned therein. Ultimately the Court

dismissed the Crl.M.C finding that complaint contains

averments with regard to the aspects noticed in Harihara

Krishnan and that the notice meets the requirement

under clause (b) of proviso to Sec.138.

Crl.A.No.41 of 2005

19. No particular form has been prescribed under the Act

with respect to a notice u/s.138(b) of the Act except that

the payee or holder in due course should make a demand

for the payment of the amount of money within 30 days

from the receipt of intimation from the bank regarding

the return of the cheque. The court cannot legislate by

prescribing a particular form and cannot require that the

nature of the transaction, leading to the issuance of

cheque, be disclosed in the notice when the statute does

not provide for it. It is also to be noted in this context that

the offence u/s.138 of the Act is an offence which would

be attracted on the ingredients above referred being

satisfied. The statute also provides a presumption in

favour of the holder which cannot be rendered otiose. We

are, with utmost respect, unable to agree with the

requirement mandated by Divakaran that the nature of

the transaction should be disclosed in the notice; as that

does not appear to be the correct position of law.

20. Now coming to the merits of the present Appeal. The

averment in the notice and complaint is about a business Crl.A.No.41 of 2005

transaction between the complainant and accused. The

complainant alleges that an amount of Rs.30,00,000/- is

due from the accused out of the business transaction. In

discharge of that liability, Ext.P1 cheque for

Rs.30,00,000/- was issued on 2.7.1997. There is no

contention about violation of statutory formalities prior to

the institution of the complaint, except with regard to the

defect in notice sent, which as per our earlier discussion

holds no merit.

21. According to the learned counsel for the complainant,

since the fact of issuance of cheque has been proved, the

presumption under Sec.139 and 118(a) of the Act would

come to the rescue of the complainant. The Appellate

Court dismissed the complaint without a proper

appreciation of facts and law involved in the case. The

learned counsel for the accused on the other hand, would

contend that complainant did not have any consistent

case and the cheque is not issued for valid consideration

and hence the presumption under Sec.118(a) and 139

stands rebutted.

Crl.A.No.41 of 2005

22. The learned counsel for the accused drew our

attention to Basalingappa v. Mudibasappa (2019 (2) KHC

451), Krishna Janardhan Bhat v. Dattatraya G.Hegde

(2008 (1) KHC 410), John K. Abraham v. Simon

C.Abraham and Another (2013 (4) KHC 853), APS Forex

Services Pvt. Ltd v. Shakti International Fashion Linkers

and Others (2020 (1) KHC 957) and ANSS Rajashekar v.

Augustus Jeba Ananth (2019 (2) KHC 155) to stress on the

aspect of presumption to be drawn by the Court under

Secs 118(a) and 139 of the Act and burden of proof on

rebuttal of the presumption.

23. To ascertain the rival contentions, it would be necessary

to ascertain the dictum of the precedents and analyze the

complaint as also the evidence led. But before that a

preliminary objection raised by the accused of violation of

Section 9 of the Foreign Exchange Regulation Act, 1973

(FERA, for short), which was in force during the relevant

time; which found favour with the appellate court, has to

be dealt with. The Court below found that the

consideration alleged is of amounts paid in foreign Crl.A.No.41 of 2005

currency at Riyadh and Pw1 having not received

permission from the RBI to transfer funds to India from a

foreign country, the transaction would be in violation of

the FERA Act. We cannot agree.

24. Section 9 prohibits a resident in India from making

payments to any person resident outside India and from

receiving any payment by order or on behalf of such non-

resident, otherwise than through an authorised dealer in

foreign exchange. Even when the receipt is through an

authorised dealer if there is no corresponding inward

remittance, then the same is deemed to be a payment

otherwise than through an authorised dealer. Here, both

the complainant and accused at the time of passing of

alleged consideration was in Riyad. The cheque issued by

the accused is in a non-resident account, in which

remittances can only be from a foreign country and the

Bank is an authorised dealer in foreign exchange. If the

cheque was honoured, the payment would have been in

Indian currency by the authorised dealer, the Bank, for

which there would definitely have been corresponding Crl.A.No.41 of 2005

inward remittance in the non-resident account.

25. Triveni Kodkani & Ors. v. Air India Ltd. & Ors. [2020

(3) KHC 50 SC : 2020 3 KHC 50] and Forasol v.

O.N.G.C. (AIR 1984 SC 241) held that a sum of money

expressed in a foreign currency can legitimately be

claimed by the plaintiff in a suit in India after converting

the same to equivalent value of Indian currency either on

the exchange rate prevailing on the date when it became

due or that on the date of institution of suit. In the event

of the claim having been made in foreign currency the

rate applicable would be as on the date of judgment. The

contention of the accused with regard to the bar under

Section 9 of FERA cannot be accepted.

26. Ext.P3 is the copy of the lawyer notice sent by the

complainant to the accused in which the specific

allegation is that an amount of Rs.30,00,000/- is due from

the accused to the complainant in the business

transaction between them. In the complaint also the

specific allegation is that the complainant and accused

had several business transaction between them and the Crl.A.No.41 of 2005

accused owes an amount of Rs.30,00,000/- to the

complainant as a result of those transactions. Towards

repayment of that, accused issued Ext.P1 cheque.

27. In chief-examination itself the complainant shifted his

stand and stated that accused availed a loan of

Rs.30,00,000/- from the complainant. The complainant

would state that the money was advanced to the accused

for conducting his business and that the money advanced

belonged to himself and three other persons. He shifted

his stance in cross-examination too.

28. Accused on the other hand, stoutly denied any business

transaction as also any loan availed. It was asserted that

the execution of the cheque was not in discharge of any

liability due from him to the complainant. It is his specific

case as brought out during cross-examination of the

complainant and also his evidence as Dw1 that while

accused and himself were in Riyad, accused requested

financial assistance in connection with the construction of

his house. The accused gave a blank cheque as Ext.P1 so

as to enable the complainant to withdraw the amount Crl.A.No.41 of 2005

required through the brother of the accused. It is also his

contention that the complainant was only a driver initially

(1986) in Riyad with a salary of 650 Riyal. Subsequently

he had served as a shop-in-charge and his salary was

1250 Riyal. He never had a job with salary of 2500 Riyal.

29. It is admitted by Pw1 that he was in Riyad from 1986 to

1997. Accused had gone to Riyad in 1981 and had been

continuing there even at the time of trial, which is not

disputed. It is his specific case that the complainant has

no capacity to advance an amount of Rs.30,00,000/- to

him. Pw1 admitted that initially, in 1986 his salary was

650 Riyal and that when he returned in the year 1997, his

salary was 2500 Riyal. He further admitted that while

working in Riyad, he was in a very cordial relationship

with the accused. He also admitted that in the year 1993

while he came to India he demanded some money from

accused. But he denied that accused gave him a cheque

as financial assistance.

30. Complainant stated that the money was advanced to

facilitate a visa business carried on by the accused. He Crl.A.No.41 of 2005

thus resiled from the specific contention that there

existed business transactions between them. It had been

initially deposed that all records in connection with the

business is kept by the accused and he has no document

at all in connection with that business. That would lead to

an inference as suggested during cross-examination of the

complainant that actually Pw1 was not having any

business transaction with Dw1 and that is why he was not

having any records in connection with the same. The

nature of business of the accused is said to be purchase of

visa from Arab Nationals, who alone can sponsor foreign

nationals, which, for a minor profit would be given to

seekers of jobs in Gulf countries. But he could not state

any of such visa transaction of the accused or himself with

a third party. The prevarication of the complainant would

probabilise the defence version that there was no joint

business conducted by them.

31. On further cross-examination, PW1 would state that he

advanced 1¼ lakhs Riyal to the accused in the year 1993,

75000 Riyal in the year 1995 and 1¼ lakhs Riyal again Crl.A.No.41 of 2005

was advanced in the year 1997. But admittedly there is no

document to prove the above transactions. It is very

curious in this context to note that accused admits during

cross-examination that in the year 1993 he requested

money from the accused while coming down to India. This

runs contrary to the claim that the complainant advanced

an amount of 1¼ lakhs Riyal to the accused in the year

1993. Even if his entire salary during this period till 1993

at the rate of 650 is calculated, it would only come to

54,600 Riyal ! It has come out in evidence that after five

years he has taken his wife also abroad, who was not

employed. So it is quite unbelievable that such a person

could advance an amount of 1.25 lakhs Riyal to the

accused in the year 1993. During cross-examination the

complainant again gave a different version that the money

advanced to the accused was sourced from his sister-in-

law's husband and also from his nephew and he has no

document to prove the advance of the amount by those

persons. He was particularly insistent that 1.25 lakhs

Riyal advanced in 1993 belongs to himself; which we find Crl.A.No.41 of 2005

to be highly improbable.

32. Further, during cross-examination, complainant admitted

that in the year 1993 he started construction of a new

house at Ramanattukara which was completed only in the

year 1998. The complainant also admits that he requested

money from the accused in the year 1993 while coming to

India. This would probabilise the case of the accused that

the complainant was in need of money for construction of

house and on his request the cheque was handed over. It

has come out from the evidence of Pw1 that, himself and

accused were on very cordial terms. So the evidence of

the accused that he gave Ext.P1 to the complainant in the

year 1993 when he requested money; directing to make

clearance through his brother, appears to be a quite

probable version. The accused, with an income of 650

Riyal, who was engaged in the construction of a house

and in need of money, cannot be believed to have

advanced an amount to the tune of 1.25 lakhs Riyal in

1993; especially when it is also admitted that he sought

financial assistance from the accused at the same time. Crl.A.No.41 of 2005

Though it is claimed that the total consideration was

sourced from his sister-in-law's husband and nephew,

there is no document or any other material to substantiate

that contention. They were also not examined. As has

been rightly contended by the learned counsel for the

accused, it is unbelievable that complainant has the

capacity to advance 1.25 lakhs Riyal + 75 Riyal + 1.25

lakhs Riyal to the accused in the year 1993, 1995 and

1997 respectively, as claimed by him. Hence the source of

money is also not proved.

33. At the instance of the accused, DW2-the Manager of SBI,

Ramanattukara was examined. Ext.D1 series letters

were issued from the Bank, Ext.D2 is his specimen

signature and Ext.D3 is the letter of the accused to the

Branch Manager of SBI, Ramanattukara intimating the

change of his signature. Ext.D4 is the certified extract of

the account of the accused kept in the Bank during July

1986 to October 1994. Ext.D4 would go to show that

cheque Nos.623381 and 623382 were drawn by the

accused in August 1986 and September 1994 respectively Crl.A.No.41 of 2005

and that account was closed on 22.3.1995 and it is also

stated to have been reopened. Ext. P1 cheque

(No.623387) is in the same series of the above two cheque

leaves. Ext.D6 series is a certified extract of cheque issue

34. As per Ext.D6 cheque Nos. 826001 to 826025 had been

issued on 21.6.1995, cheque Nos. 804821 to 804840 had

been issued on 11.8.1999 and cheque Nos.804701 to

804720 had been issued on 19.8.1999. DW2 deposed that

cheque Nos. 623381 to 623400 had been issued on

28.9.1995. But that evidence of DW2 is in conflict with

Ext.D4 which would show that cheque No.623381 has

been drawn by the accused in the month of August, 1986

and cheque No.623382 has been drawn by him in

September 1994. It appears that DW2's evidence that

cheque book Nos.623381 to 623400 had been issued on

28.9.1995 is an inadvertent mistake. Ext.D6 is for the

period starting from 4.8.1999 upto 28.8.1999. That would

probabilise the defence case that Ext.P1 cheque bearing

number 623387 was issued to the complainant in the year Crl.A.No.41 of 2005

1993 while he requested financial help from the accused

while coming to India. DW1 categorically deposed that

though he demanded the cheque back, complainant did

not return it stating that it went missing. He also

categorically stated that the complainant returned from

Gulf in the year 1997 abandoning his job. DW1 also came

down to India for a visit in June 1997 and then the

complainant again demanded money. But he did not

advance any amount and asked for the return of the

cheque and there was a wordy altercation. Then accused

threatened to misuse the old cheque. It is hence stop

payment to the Bank was issued on 3.7.1997. That is

proved by Ext.D7 dtd. 3.7.1997, a letter issued by the

accused to the Bank requesting stop payment with

respect to Ext.P1 cheque. Presentation of the cheque by

the accused admittedly is on 2.7.1997, the date on which

the cheque was given as alleged by the complainant. The

facts brought out during cross-examination of PW1 is

corroborated with the evidence of Dws 1 and 2 to a great

extent.

Crl.A.No.41 of 2005

35. This is a case in which accused denied the very execution

of the cheque itself. Though attempt was made by the

accused to contend that the signature in Ext.P1 is not that

of his, it has come out from the evidence adduced from

the defence side itself that in between 1993 and 1997 he

had three types of signatures and among them one tallies

with that in Ext.P1. Accused also admitted that there is no

difference in signature of Ext.P1 and P5 (acknowledgment

cards). So the signature in Ext.P1 is that of accused

himself. But as discussed in the previous paragraphs the

complainant did not have any consistent case as revealed

from the notice, the complaint and also the evidence led

before Court. Basalingappa held that when there is

contradiction in the complaint, examination in chief and

cross-examination of the complainant then it is fatal to the

prosecution and unless there is a satisfactory explanation

it would enable the court to conclude, presumption under

Sec.139 having been rebutted. John K Abraham found

that serious lacuna in the evidence of complainant strikes

at the root of a complaint. Krishna Janardhan Bhatt held Crl.A.No.41 of 2005

that in order to rebut the presumption under Sec.139 the

accused need not examine himself and he may discharge

the burden on the basis of the materials already brought

on record.

36. ANSS Rajasekhar found that when evidence elicited from

complainant during cross-examination creates serious

doubt about the existence of debt and about the

transaction and the complainant fails to establish the

source of funds the presumption under Section 139 is

rebutted and the defence case stands probabilised. APS

Forex Services Pvt. Ltd held that whenever the accused

questioned the financial capacity of the complainant in

support of his probable defence, despite the presumption

under Sec.139, onus shifts again on the complainant to

prove his financial capacity. Here we have already

discussed in detail the failure of the complainant to prove

the source of money alleged to have been advanced.

37. Facts, circumstances and evidence adduced probabilise

the version of the defence that in the year 1993 the

accused issued cheque as a financial assistance. We have Crl.A.No.41 of 2005

no hesitation to find that though execution of P1 cheque is

proved the accused has successfully rebutted the

presumption and it has been established that there was

no valid consideration for issuance of the cheque.

38. The accused having succeeded in rebutting the

presumption, the burden shifts to the complainant to

prove the consideration. In the case at hand apart from

producing Ext.P1 cheque, complainant did not produce

any document or other evidence to prove consideration.

Source of fund though alleged to be his nephew and

brother in law of his wife ,they were not examined. There

is no material produced to prove the alleged business

transaction between himself and the accused in Riyad or

the business of accused for which he asserted to have

advanced loan. In short this is a case in which the accused

rebutted the presumption available under Section 139 of

the Act and the complainant miserably failed to prove the

consideration for Ext.P1 cheque. The learned Addl.

Sessions Judge rightly acquitted the accused.

39. The learned counsel for the complainant would also Crl.A.No.41 of 2005

contend that, in spite of receiving the notice demanding

the amount, no reply has been sent by the accused which

is a strong circumstance making probable the case of the

complainant. DW1 though stated that a lawyer notice was

sent and copy was attempted to be marked during his

evidence, it was not seen marked. Even otherwise, the

failure to send reply cannot be a circumstance to prove

the case of the complainant or demolish the case of the

defence. The Apex Court in John K. Abraham

deprecated the High Court's findings based solely on the

fact of failure of the accused to send any reply to the

lawyer notice issued by the complainant. It was held that

based on that single circumstance, the presumption under

Sections 118 and 139 of the N.I. Act cannot be easily

drawn against the accused.

40. The reference is answered as follows:

The dictum laid down in Divakaran v. State of

Kerala [2016 (4) KLT 233] that non disclosure of the

nature of the transaction between the parties in the

notice is fatal and that the suppression of the Crl.A.No.41 of 2005

particulars of the transaction in the complaint is

sufficient to order acquittal is held to be not good law.