SRI.SHANTHARAMA BHANDARY v. SRI.PRASAD RAI

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? - 3 - CRL.A.No.908 of 2014

#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 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 - 4 - CRL.A.No.908 of 2014 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. - 5 - CRL.A.No.908 of 2014

#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 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 - 6 - CRL.A.No.908 of 2014 accused to place rebuttal evidence to displace the statutory presumption available favour of 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 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 - 7 - CRL.A.No.908 of 2014 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 - 8 - CRL.A.No.908 of 2014 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 - 9 - CRL.A.No.908 of 2014 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, communication would have been delivered at the address of the addressee. But 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 - 10 - CRL.A.No.908 of 2014 expression 'serve' or either of 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 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 - 11 - CRL.A.No.908 of 2014 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 - 12 - CRL.A.No.908 of 2014 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 - 13 - CRL.A.No.908 of 2014 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 - 14 - CRL.A.No.908 of 2014 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 - 15 - CRL.A.No.908 of 2014 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 - 16 - CRL.A.No.908 of 2014 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. - 17 - CRL.A.No.908 of 2014

#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. - 18 - CRL.A.No.908 of 2014 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. Registry to send back the records to Trial Court with a copy of this order. SD/- JUDGE GSR