K. Suri Babu Surendra Babu vs U. Ramesh And Another
2022 Latest Caselaw 6749 Tel

          THE HONOURABLE DR. JUSTICE G. RADHA RANI

                CRIMINAL REVISION CASE No.994 of 2019
ORDER:

This Criminal Revision Case is filed by the petitioner-accused

aggrieved by the judgment dated 31.07.2019 passed in Criminal Appeal

No.794 of 2017 by the Additional Metropolitan Sessions Judge for trial of

Jubilee Hills Car Bomb Blast Case cum Additional Family Court cum XXIII

Additional Chief Judge cum IX Additional Metropolitan Sessions Judge,

Hyderabad in dismissing the appeal by modifying the sentence of simple

imprisonment from six months to three months while maintaining payment of

compensation of Rs.2,50,000/- (cheque amount) in default, to undergo simple

imprisonment for three months as imposed by the XII Special Magistrate,

Hyderabad at Erramanzil vide judgment dated 11.07.2017 in CC.No.134 of

2016.

2. The parties are hereinafter referred as arrayed before the trial court.

3. The case of the complainant was that the accused had borrowed a sum

of Rs.2,50,000/- from the complainant as hand-loan on 08.02.2012 and

promised to repay the loan amount within six months but failed to repay the

same within the stipulated time. On demand by the complainant, the accused

issued a cheque bearing No.597213 dated 28.01.2013 for Rs.2,50.000/-

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drawn on State Bank of India, Vanasthalipuram Branch, Hyderabad, but the

said cheque was dishonoured on presentation vide cheque return memo dated

29.01.2013. The complainant informed to the accused about the dishonor of

the subject cheque, but the accused requested the complainant to present the

said cheque after one week and that he would arrange sufficient funds in his

account. Thereafter, once again, the complainant presented the subject

cheque but again the cheque was returned with the endorsement that account

was inoperative/dormant-refer to drawer vide cheque return memo dated

06.02.2013. Thereafter, the complainant issued statutory legal notice on

19.02.2013. But, however, the said notice was returned with postal

endorsement that party refused on 25.02.2013. As such, the complainant

preferred the complainant.

4. The case was tried by the XII Special Magistrate, Hyderabad. During

the course of trial, the complainant examined PWs.1 and 2 and marked

Exs.P1 to P6. No defence evidence was adduced by the accused.

5. The defence taken by the accused was that he obtained hand loan of

Rs.50,000/- from the complainant and gave an empty cheque and pro-note to

the complainant towards security. The complainant was not having financial

capacity to advance Rs.2,50,000/- towards loan and the complainant failed to

file his income tax returns in proof of his lending loan. The complainant

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managed the postal authorities to get the endorsement on the legal notice. No

legal notice was served upon him.

6. The trial court, on considering the oral and documentary evidence on

record and considering the presumptions under Section 118 (a) and Section

139 of the Negotiable Instruments Act (for short 'NI Act'), held that the

burden would lie upon the accused to rebut the presumptions existing in

favour of the complainant, when he admitted his signatures on the cheque and

the pro-note and also placed reliance upon Section 27 of the General Clauses

act and Section 114 of the Indian Evidence Act and observed that a mere

denial that the legal notice was not served upon him, was not sufficient to

rebut the presumption of deemed service under the above provisions, when

the accused was not denying his address appearing on the legal notice. It

further observed that there was no law that mandates the lender to declare the

amount of loan in his income tax returns and considering the provisions of

Section 269 SS of the Income Tax Act held that the bar pertained to taking

the loan and not for giving the loan and found the accused guilty for the

offence under Section 138 of the NI Act and convicted him and sentenced to

simple imprisonment for six months and to pay compensation of

Rs.2,50,000/- to the complainant within one month and in default of payment

of such compensation, to suffer simple imprisonment for three months.

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7. Aggrieved by the said judgment of conviction and sentence, the

accused preferred an appeal. The appeal was heard by the IX Additional

Metropolitan Sessions Judge, Hyderabad vide Criminal Appeal No.794 of

2019 and vide judgment dated 31.07.2019 dismissed the appeal modifying

the sentence by reducing it from six months imprisonment to three months

imprisonment while maintaining the compensation amount and the default

sentence as imposed by the trial court.

8. Aggrieved further, the accused preferred this revision contending that

the trial court as well as the appellate court failed to observe that the burden

cast on the accused was not as high as compared to the burden cast on the

complainant and it was enough for the accused to rebut the statutory

presumption under Section 139 of NI Act on mere preponderance of

probabilities and prayed to set aside the judgment of conviction and sentence

recorded by the courts below.

9. Heard learned counsel for the revision petitioner - accused and the

learned counsel for the respondent No.1-complainant.

10. Learned counsel for the revision petitioner-accused contended that the

legal notice marked under Ex.P4 was not signed by the counsel and the same

would not amount to valid issuance of notice under Section 138(b) of NI Act.

The counsel had not entered into the witness box to prove that the same was

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issued by him. The party's signature was also not available on the said

notice. It cannot be considered as valid service of notice. The initial burden

would lie upon the complainant to prove the ingredients of Section 138 of NI

Act before raising a presumption under Section 139 of NI Act. Pw.1 also

admitted in her cross-examination that neither her signature nor the signature

of her Advocate was present on Ex.P.4 legal notice.

11. Learned counsel for the respondent No.1-complainant, on the other

hand, contended that both the trial court and the lower appellate court

considered the said argument and rejected the same. As the accused refused

to receive the legal notice, it was considered as deemed service by both the

courts below and the said argument was not raised in the grounds of revision

and prayed to dismiss the revision case filed by the petitioner-accused.

12. On a perusal of the record, the learned counsel for the revision

petitioner had not taken this ground in the grounds of revision. The facts of

the case also would disclose that the revision petitioner - accused refused to

receive the notice and as such, it was considered as deemed service by the

courts below by considering the presumptions under Section 27 of the

General Clauses Act and Section 114 of the Indian Evidence Act and also

considering the judgment of the Hon'ble Apex Court in C.C.Alavi Haji v.

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Palapetty Muhammed and another1. The revision petitioner-accused had

not disputed his address appearing on the legal notice that it did not belong to

him. Summons were also served on the accused on the same address. Hence,

the revision petitioner-accused was not aware whether the legal notice was

signed or unsigned until the same was exhibited before the court.

13. The Calcutta High Court in Barendra Kumar Bera v. Santanu #

Chottan Mukherjee2 considering the aspect of an Advocate omitting to sign

on a demand notice issued under the provisions of the NI Act held that:

"As held earlier, the notice contains all the ingredients of a requisite notice under section 138 (b) of the act. It contains the entire fact of the case of the complainant as presented in the petition of complaint. Existence of debt, liability of the respondent to discharge the debt, issuance of cheques, fact of dishonourment, demand to make payment were all given in the notice. Notice was properly addressed and stamped and it reached the sendee. The sendee accepts the notice and in the trial all these facts have been put in evidence - oral and documentary and have not been or could not be denied. The respondent did not deny the issuance of cheques of the amount given in the notice. What he denied is the amount of loan advanced which could not meet with success in the trial. In such circumstances, it could not be said that omission to put signature of the lawyer in the notice is vital and for that the notice has to be said invalid or illegal in the eye of law. I am emboldened by the judgment of the Hon'ble Supreme Court in Sil Import v. Exim Aides, reported in 1999 Cr. LI 2276, where their lordships observed as follows:

"the upshot of the discussion is, on the date when the notice sent by fax reached the drawer of the cheque the period of 15 days (without which he has to make the payment) has started running and on the expiry of

(2007) 6 SCC 555

2011 (6) R.C.R. (Criminal) 676

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that period the offence is complete unless the amount has been paid in the meanwhile."

Thus notice by fax was considered sufficient.

(15) The above decision of the Supreme Court which also has been referred to by the learned Magistrate gives rise to the reasoning that omission to put signature in the notice is not fatal though notice no doubt has to be in writing. It may be sent by, telegram, it may be sent through fax or E-mail or through modern devices. When the position is so, it entails that it need not be signed provided authorship is not disputed or identity of the person issuing the notice is established or the drawer of the cheque is not misled or misguided. None of the situations does arise here. In such circumstances, it cannot be said that omission to put an advocate's signature in the notice which has not been deliberate but mere accidental has been fatal to the case of the appellant."

14. The Karnataka High Court in Satyanarayanan Gowda v. B.

Rungappa3 held that:

"The Advocate by mistake missed to sign the notice under Section 138 of the N.I. Act but that by itself would not lead to the conclusion that notice is invalid in the eye of law. there is no contemplation that the notice should be signed by the party and the only requirement is that the same is duly served on the respondent."

15. The Kerala High Court in Janardhan v. Jayachandran4 held that:

"merely because the counsel concerned had failed to put his signature it cannot be held inadmissible because no prejudice has been caused to the respondent. The Advocate not signing the notice by inadvertence would not make the notice invalid in any way."

1996 Crl.L.J. 2264

2005 (2) Criminal Court Cases 590 (Kerala)

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16. The Madras High Court in C.N. Hari Krishnan v. Kinetic Finance

Ltd.,5 wherein also notice under Section 138 (b) was not signed by the

counsel, observed that:

"where notice could be sent by fax or telegram, as I observed earlier, the fact that notice was not signed by the Counsel would not be a ground for quashing of the proceeding".

17. Thus, there is no requirement in law to send the notice by post only. It

can be sent by telegram, through fax or e-mail or through modern devices

where it could not be signed.

18. Section 138 (b) of NI Act does not contemplate that a notice need to be

signed. It only requires that a notice need to be sent to the accused

demanding payment and the accused to pay the same within 15 days on

receipt of notice. But, in the present case, the revision-petitioner accused had

not even received the notice and refused to receive the notice. It amounts to

deemed service of notice. Hence, absence of signature of the Advocate on

the notice is not a material violation and it cannot be considered as non-

compliance of the requirements of Section 138 of the NI Act to be proved by

the complainant before raising the presumption. Hence, this court does not

find any merit in the contention of the learned counsel for the revision

petitioner-accused in this regard.

2004 (2) DCR 233

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19. On a perusal of the judgments of the courts below, the trial court by

discussing all the points and the case law on each and every aspect and the

presumptions available, discussed the evidence of the complainant and the

defence of the accused and came to the conclusion that the accused failed to

rebut the presumptions raised against him. As the accused admitted his

signatures on the cheque marked as Ex.P.1 as well as on the promissory note,

presumptions under Section 118-A of NI Act that every negotiable

instrument was made or drawn for consideration and under Section 139 of the

NI Act that unless the contrary was proved, the holder of a cheque received

the cheque of the nature referred to under Section 138 of the NI Act for the

discharge, in whole or in part of any debt or other liability are rightly raised.

20. As per the judgments of the Hon'ble Apex Court in K. N. Beena v.

Muniappan6, Hiten P. Dalal v. Bratindranath Banerjee7, Rangappa v. Sri

Mohan8, Rohit Bhai Jeevanlal Patel v. State of Gujarath and another9

and Bir Singh v. Mukesh Kumar10, the initial presumption that the cheque

was issued in discharge of legally enforceable debt is raised in favour of the

complainant and a reverse onus is placed upon the accused to discharge the

said burden. It was also noted that the accused had to discharge the said

burden by raising a probable defence but not showing a mere possibility.

AIR 2001 SC 2895

(2001) 6 SCC 16

AIR 2010 SC 1898

2019 (18) SCC 106

(2019) 4 SCC Crl. 197

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21. A three Judge Bench of the Hon'ble Apex Court in Kalamani Tex and

another v. P. Balasubramanian11 held that:

"13...The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystalized by this Court in Rohitbhai Jivanlal Patel v. State of Gujarat [2019 (18) SCC 106] in the following words:

"In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused....."

14. Once the 2nd Appellant had admitted his signatures on the cheque and the Deed, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial Court fell in error when it called upon the Complainant Respondent to explain the circumstances under which the appellants were liable to pay. Such approach of the trial Court was directly in the teeth of the established legal position as discussed above, and amounts to a patent error of law.

15. No doubt, and as correctly argued by senior counsel for the appellants, the presumptions raised under Section 118 and Section 139 are rebuttable in nature. As held in MS Narayana Menon v. State of Kerela [(2006) 6 SCC 39], which was relied upon in Basalingappa v. Mudibasapa [(2019) 5 SCC 418], a probable defence needs to be raised, which must meet the standard of "preponderance of probability", and not mere possibility. These

(2021) 5 SCC 283

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principles were also affirmed in the case of Kumar Exports v. Sharma Carpets [(2009) 2 SCC 513], wherein it was further held that a bare denial of passing of consideration would not aid the case of accused."

22. Thus, the defence taken by the accused with regard to the complainant

not having financial capacity to lend the amounts or failed to file any IT

returns to show that he lent the said amounts were inconsequential as per the

observations of the Hon'ble Apex Court as extracted above. The accused

failed to adduce any evidence or failed to probabilise the defence taken by

him that the complainant lent only an amount of Rs.50,000/- to him and had

misused the blank cheque and promissory note taken as security towards

discharge of the said liability. The Hon'ble Apex Court in Kalamani Tex's

case (11 supra) also held that:

"17. Even if we take the arguments raised by the appellants at face value that only a blank cheque and signed blank stamp papers were given to the respondent, yet the statutory presumption cannot be obliterated. It is useful to cite Bir Singh v. Mukesh Kumar [(2019 4 SCC 197, where this court held that:

"Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."

23. In the present case also admittedly, there is business relationship

between the parties and both the accused and the complainant were in the

field of construction of houses and were selling the same to prospective

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purchasers. The defence taken by the accused does not inspire confidence or

meet the standard of the preponderance of probability even in this case also.

Both the trial court and the lower appellate court rightly considered all the

aspects and came to the conclusion about the guilt of the accused.

24. Hence, this Court does not find any merit in the contentions of the

learned counsel for the revision petitioner-accused that the trial court and the

lower appellate court passed the judgments on conjenctures and surmises and

that the accused discharged the presumptions by preponderance of

probability.

25. In the result, the Criminal Revision Case is dismissed confirming the

judgment of conviction recorded by both the courts below against the

petitioner-accused for the offence under Section 138 of the Negotiable

Instruments Act.

26. The Hon'ble Apex Court in Kalamani Tex's case (11 supra) also held

that:

"19. As regard to the claim of compensation raised on behalf of the respondent, we are conscious of the settled principles that the object of Chapter XVII of the NIA is not only punitive but also compensatory and restitutive. The provisions of NIA envision a single window for criminal liability for dishonour of cheque as well as civil liability for realisation of the cheque amount. It is also well settled that there needs to be a consistent approach towards awarding compensation and unless there exist special circumstances, the Courts should uniformly levy fine up to twice

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the cheque amount along with simple interest at the rate of 9% per annum",

27. Hence, it is considered fit to modify the sentence of imprisonment

imposed against the petitioner-accused to fine of Rs.5,00,000/- i.e. double the

cheque amount to be paid by the accused within two months from the date of

this order and on payment of the said fine, the same to be paid as

compensation to the complainant and on his failure to pay the said amount,

the petitioner-accused is liable to undergo simple imprisonment for a period

of two (2) years. The amount of Rs.50,000/- deposited before the trial court

shall be treated as part of the fine amount awarded and the respondent-

complainant is permitted to withdraw the same, if not permitted earlier.

As a sequel, miscellaneous petitions pending if any, shall stand closed.

_____________________ Dr. G.RADHA RANI, J

December 13, 2022 KTL