Bangalore District Court
Sathish Kumar vs Sri. Fazlul Hassan Zahid on 20 May, 2023
KABC020260292019
IN THE COURT OF ADDL. CHIEF METROPOLITAN
MAGISTRATE, BENGALURU CITY.
SCCH-6
PRESENT: SMT. K. LAKSHMI, B.A.L, LL.B.,
IV Addl., Small Cause Judge &
ACMM, Court of Small Causes,
BENGALURU.
C.C. No.5738/2019
Dated this the 20th day of May 2023
COMPLAINANT : Sathish Kumar
Aged about 47 years,
Son of Late Seetharam,
Residing at No.145, 6th Cross,
Pillanna Garden, 1st Stage,
Bengaluru-560 084.
(By Advocate Shri. H. Jayarama
Shetty)
V/s
ACCUSED : Sri. Fazlul Hassan Zahid
Aged about 53 years,
Proprietor, Z. S. Collections,
S/o Late S. Basheer Ul Hassan,
C.C. No. 5738/2019
No.11/1, Davis Road,
St. Thomas Town Post,
Bengaluru-560 084.
(By Advocate Shri. S. A. Wajid)
* * *
-: J U D G M E N T :-
The complainant has filed the present complaint
against the accused under section 200 of Cr.P.C for the
offence punishable under section 138 of Negotiable
Instrument Act.
2. According to the Complainant, the accused
approached him and availed a credit facility to the tune
of Rs. 2,00,000/- on 15-01-2019. He assured that he
will return the amount within six months. The accused
has issued a post dated cheque bearing No. 978409
dated 28-05-2019 for a sum of Rs. 2,00,000/- drawn
on Canara Bank, Devarajeevanahalli Branch, Bengaluru.
Thereafter, the cheque was presented for collection in
the account of the complainant and the cheque was
C.C. No. 5738/2019
dishonored by the said Bank on 14-06-2019 on the
ground that the " drawers signature differs ".
3. Thereafter, the complainant issued a statutory
notice dated 28-06-2019 under section 138 of the
Negotiable Instrument Act, to the accused. The said
notice returned with an endorsement that 'not delivered
addressee moved'. The accused has knowledge about the
issuance of notice. Since the said notice was not complied
with, the above said complaint is preferred by the
complainant.
4. In his pre-summoning evidence, complainant was
examined on affidavit. He reiterated the contents of
complainant and got marked five documents as per Ex.
P-1 to Ex. P-5. Upon appreciation of pre-summoning
evidence, accused was summoned for an offence
punishable under section 138 of the Negotiable
Instrument Act. After receipt of summons, the accused
appeared before this Court through his counsel and he
C.C. No. 5738/2019
was enlarged on bail. Plea of accusation has been read
over and explained to the accused and he pleads not
guilty and claims to be tried. The accused was examined
u/Sec.313 of Cr.P.C. He totally denied the entire case
of the complainant.
5. The accused moved an application to cross
examine the complainant and said application came to be
allowed. The sufficient opportunity has given to the
accused to cross examine the complainant. The accused
has cross examined the complainant. On the other hand,
the accused has led evidence as DW-1. He relied on Ex.
D-1 to Ex. D-3. Thereafter, the case is posted for
arguments.
6. Heard the arguments.
7. On the basis of the above facts, the following
points arise for my consideration :-
1. Whether the complainant proves beyond all
the reasonable doubt that, the accused has
taken the hand of Rs. 2,00,000/- from him
C.C. No. 5738/2019
and for the repayment of said amount issued a
post dated cheque bearing No. 978409 dated
28-05-2019 for a sum of Rs. 2,00,000/-
drawn on Canara Bank, Devarajeevanahalli
Branch, Bengaluru and when the complainant
presented the cheque for encashment and the
cheque was dishonored due to "drawer
signature differs", for which the complainant
has issued a legal notice through RPAD and
the same was served, but the accused has not
repaid the said amount and thereby the
accused has committed the offence punishable
under section 138 of Negotiable Instruments
Act?
2. What order ?
8. My answers to the above points are as follows :
Point No.1 : In the Negative,
Point No.2 : As per final order,
for the following:
C.C. No. 5738/2019
-: R E A S O N S :-
POINT No.1 :-
9. The complainant has filed his affidavit in lieu of
his oral chief examination. In his affidavit he has testified
regarding lending of Rs. 2,00,000/- to the accused,
issuance of the post dated cheque, its dishonour, issuance
of legal notice and failure of the accused to pay the
cheque amount. The complainant has produced cheque
bearing No. 978409 dated 28-05-2019 for a sum of
Rs.2,00,000/- drawn on Canara Bank,
Devarajeevanahalli Branch, Bengaluru alleged to be
issued by the accused in favour of the complainant. Ex.
P-1 stands in the name of the complainant. Ex. P-2 is
the office copy of the legal notice, which is dated 28-06-
2019. Ex. P-3 is the postal receipt. Ex. P-4 is the
unserved postal cover. Ex. P-5 is the postal track
consignment.
10. On the other hand, the accused has led evidence
as DW-1. He deposed that the complainant let the
C.C. No. 5738/2019
premises to him to run the the education instrument. He
is running a educational institution under the name and
style 'Prestige Public School'. The brother of
complainant has executed the memorandum of
understanding in his favour. It is further alleged that the
complainant and his brother came to the school and
threatened to vacate the premises. Hence, he filed a suit
for permanent injunction against the complainant and his
brother in O.S. No. 3390/ 2019 before the City Civil
Court, Bengaluru. He further stated that the
complainant has secured the cheque from his school
without his knowledge and misused the same. He is not
signatory of the impugned cheque. He never borrowed a
loan from the complainant nor issued the cheque for the
discharge of debt. He is not liable to pay the cheque
amount to the complainant. The notice not served on
him. The complaint is not maintained.
11. Learned counsel for the complainant argued
that the complainant has discharged his initial burden of
C.C. No. 5738/2019
proving the case by his oral as well as documentary
evidence. It is also contention of the complainant that the
accused has not initiated the legal action against the
complainant to recover the disputed cheque. The accused
was aware of the fact that the disputed cheque was with
the complainant. He has also contended that the benefit
of presumption under Sections 118 and 139 of
Negotiable Instruments Act is in favour of the
complainant, and therefore the accused has failed to rebut
the presumption. Hence, the accused is liable to be
convicted.
12. On the contrary, the lerned defence counsel
submits that there was no transaction between the
complainant and the accused. The accused never
borrowed a loan from the complainant nor issued the
cheque in dispute for discharge of debt. The notice not
served on him. The accused is not a signatory of the
impugned cheque. It is further contended that though
there is presumption under Sec.118 and 139 of
C.C. No. 5738/2019
Negotiable Instruments Act, existence of legally
enforceable debt is not a matter of presumption
u/Sec.139 of Negotiable Instruments Act.
13. In view of rival contentions raised by the
parties, it is necessary to consider the statutory
provisions in this regard and also proposition of law.
Section 118 of Negotiable Instrument Act lays
down that:
"Until the contrary is proved, it shall
be presumed that every Negotiable
instrument was made or drawn for
consideration."
Section 139 of N.I. Act contemplates that :
" Unless the contrary is proved, it
shall presume that holder of the
cheque receive the cheque of the
nature referred to section 138 of the
N.I. Act for the discharge, in whole
or in part, of any debt or other
liability."
C.C. No. 5738/2019
14. The presumption mandated by Section 139 of
N.I. Act does indeed show the existence of legally
enforceable debt or liability. It is a rebuttal presumption.
It is open to raise the defence, wherein the existence of
legally enforceable debt or liability can be contested. For
rebutting presumption accused is not required to adduce
evidence with unduly high standard of proof, but the
standard of proof for doing so is that preponderance of
probability. If the accused is able to raise probable
defence, which creates doubt about the existence of
legally enforceable debt or liability, then the onus shift
back to the complainant. It is also clear that for rebutting
the presumption accused can rely on the material
submitted by the complainant or his cross examination
and he need not necessarily adduce his defence evidence
in all the cases.
15. The specific case of the complainant is that, the
accused has borrowed a loan of Rs. 2,00,000/-. The
accused issued the disputed cheques for discharging of
C.C. No. 5738/2019
debt and the said disputed cheque was dishonored.
Thereafter a legal notice was issued and then he filed
complaint. It is further contended that once the cheque
relates to the account of the accused, then initial
presumption as contemplated u/Sec.139 of N.I. Act has
to be raised by the court in favour of the complainant.
16. In order to prosecute the drawer of the cheque
for the offence punishable under offence Sec.138 of
Negotiable Instrument Act, the following facts are
required to be proved :
That the cheque was drawn for
payment of money for discharging the
of a debt or liability,
The cheque was dishonored,
That the cheque was presented within
the prescribed period,
The payee made a demand for payment
of the money by giving demand notice
in writing to the drawer within
stipulated period.
That the drawer failed to make the
payment within 15 days of the receipt
of notice.
C.C. No. 5738/2019
17. According to the accused, he never borrowed
a loan from the complainant. In this case, the accused has
not denied the cheque. Section 20 of Negotiable
Instrument Act, 1881, states that when a person signs
and delivers blank cheque to another, he thereby gives
prima-facie authority to holder thereof to make or
complete it for any amount specified therein and not
exceeding the amount covered by stamp. After
combined reading of said section 20 and 138 of
Negotiable Instrument Act, it appears that to made out
an offence in question against the accused, the necessary
ingredient is that the cheque should be drawn on the
account of the drawer and it is immaterial the contents
therein are in whose handwriting as per section 20 of the
Negotiable Instruments Act. After perusal of said section
20, it appears that the drawer of a cheque can issue blank
cheque to other person and by his said act he gives an
authority to said concern person to fill up it contents. It
enables the holder of the cheque to fill up the incomplete
cheque.
C.C. No. 5738/2019
18. In the case of Bir Singh -Vs- Mukesh Kumar,
AIR 2019 SUPREME COURT 2446, our Apex Court
held that the complainant can fill up amount or
particulars in blank cheque. If voluntarily presented to
payee towards payment, payee may fill up amount and
other particulars and it in itself would not invalidate
cheque. Onus would still be on accused to prove that
the cheque was not issued for the discharge of debt or
liability.
19. In the case of K. N. Beena -Vs- Muniyappan,
(2001) 8 SCC 458 the Hon'ble Apex Court held that
under Section 118 of the Negotiable Instrument Act,
unless the contrary is proved, it is to be presumed that
the negotiable instruments had been made or drawn for
consideration. It is further held that under section 139,
the Court has to presume, unless the contrary is proved,
that the holder of the cheque received the cheque for
discharge, in whole or in part, of a debt or liability. It is
further held that the cheque had been issued for debt or
C.C. No. 5738/2019
liability. This presumption is rebuttable. However, the
burden of proving that the cheque has not been issued
for a debt or liability is on the accused. Further in the
case of Kumar Exports -Vs- Sharma Carpets, (2009)
2 SCC 513, it is held that the accused may adduce
evidence to rebut the presumption, but mere denial
regarding existence of debt shall not serve nay purpose.
20. The position of law which emerges is that once
issuance of cheque is admitted, the presumption under
Section 118 (a) of Negotiable Instrument Act would
arise that it is supported by a consideration. Such a
presumption is rebuttal. The accused can prove the non-
existence of a consideration by raising a probable
defence. If the accused is proved to have discharged the
initial onus of proof showing that the existence of debt
was improbable or doubtful or the same was illegal, the
onus would shift to the complainant who will be obliged
to prove it as a matter of fact and upon it failure to
prove would dis-entitle him to grant of relief on the basis
C.C. No. 5738/2019
of the negotiable instrument. The burden upon the
accused of proving the non-existence of the consideration
can be either direct or by bringing on record the
preponderance of probability by reference to the
circumstances upon which he relies. In such event, the
complainant is entitled under law to rely upon all the
evidence led in the case. In case, where the accused fails
to discharge the initial onus of proof by showing the
non-existence of the consideration, the complainant
would invariably be held entitled to the benefit of
presumption arising under Section 118 (a) of Negotiable
Instrument Act in his favour. The Court may not insist
upon the accused to disprove the existence of
consideration by leading direct evidence as the existence
of negative evidence. It is neither possible not
contemplated and even of led, is to be seen with a doubt.
The standard of proof evidently is preponderance of
probabilities. Inference of preponderance of probabilities
can be drawn not only from the materials on records,
C.C. No. 5738/2019
but also by reference to the circumstances upon which
relies.
21. Thus, this Court has to consider whether the
complainant has to prove the existence of legally
recoverable debt. From the statement of the complainant
reveals that the accused borrowed a loan from him and
disputed cheques were issued in favour of complainant.
The accused has admitted the issuance of cheques in
favour of complainant. In the present case, the
complainant has presented the disputed cheque within 3
months from the date of the cheque as it could be seen
from endorsement. The bank endorsement reveals that
the cheque in question was dishonored. The demand
notice was issued within a statutory period. Then the
complainant has filed this complaint within the statutory
period. Admittedly, in this case, the accused has not
taken any legal action against the complainant to recover
the cheque in issue from him.
C.C. No. 5738/2019
22. It is well settled that the party who pleads has
also to prove his case. Section 101 of the Indian Evidence
Act, 1872 defines 'burden of proof' , which clearly lays
down that whosoever desires any Court to give judgment
as to any legal right or law dependent on the existence of
facts which he asserts, must prove that those facts exist.
When a person is bound to prove the existence of any
fact it is said that the burden of proof lies on that person.
Section 106 of the Indian Evidence Act, 1872 defines'
burden of proving fact especially within knowledge'.
Burden on the complainant to establish facts which are
especially within his knowledge. Admittedly, the accused
filed a civil suit against the complainant before the
presentation of compliant. The complainant has not
stated the pendency of civil suit in the complaint.
Burden lies heavily on complainant to establish the
circumstances under which the cheque came to the
possession of the complainant. In this case, the accused
has denied the signature in cheque, then under what
circumstances it came to complainant's possession is to
C.C. No. 5738/2019
be stated. In the absence of such statement, court cannot
proceed on any assumption that it was handed over to
complainant by accused. In this case, the cheque in
dispute bounced on account of the fact that the signature
of Ex. P-1 was not tallying with the specimen signatures
of the accused kept with the Bank. The Bank has
returned the same with the remark that the signature on
Ex.P-1 was not tallying with the accuser's specimen
signature kept with the bank. The memo issued by the
bank clearly shows that the signature of the accused on
Ex. P.1 was objected by the Bank. This circumstances
shows that the signature of Ex.P-1 was not that of the
accused. Further, the complainant has not placed any
material to show that the signature in the cheque was
that of the accused. Now, coming to the facts of this
case, the accused has taken a defence that the cheque in
question has not been issued by him. The accused has
also stated that since the cheque was not issued and he
had never signed the cheque. During entire proceedings,
the accused has disputed signature on the cheque. It is a
C.C. No. 5738/2019
settled position of law that the dishonour of the cheque
even because of the reason account closed ensues liability
on the accused and the accused is not be acquitted only
on the basis that the cheque has been dishonored because
of the reasons 'account close'. payment stopped' or
'refereed to drawer''. It is true that the cheque got
dishonored because of the reason of 'signature differs'.
Admittedly, the accused filed the injunction suit against
the complainant before the presentation of this
complaint. Ex. D-1 is a certified copy of order-sheet and
it reveals that the accused filed suit in O. S. No.
3390/2019 on 27.04.2019. Admittedly, the complainant
has issued the notice to the accused on 28.06.2019 i.e.,
after filing of the civil suit against the accused. This fact is
not disclosed by the complainant. What prevented him
to disclose the said fact is not forthcoming in this case.
23. Another contention of the defence counsel is
that the demand notice was not served to the accused.
The burden is on the complainant that the notice was
C.C. No. 5738/2019
dispatched by post with correct address. Per contra,
Learned Counsel for complainant argued that the notice
was duly served on the accused. Admittedly, the
requirements of Section 138 (b) of the Negotiable
Instrument Act is that notice should be sent to the
drawer of the cheque. Clause (b) of the proviso to
Section 138 of the Negotiable Instrument Act lays down
that notice regarding dishonor of the cheque should be
sent to the drawer of the cheque within 15 days of the
receipt of intimation regarding the dishonor of the
cheque. Considering the provision contained in Section
27 of the General Clauses Act once the sender establishes
the fact that the notice was dispatched by post with
correct address written thereon, it should be deemed to
have been served on the sendee unless he establishes that
it was not really served and that he was not responsible
for such non-service.
24. The Statue stipulates that the holder of the
cheque makes a demand for the payment of money
C.C. No. 5738/2019
covered by the cheque by issuing demand notice in
writing to the drawer of within thirty days of the receipt
of information by him from the bank regarding the
return of the cheque as unpaid. Notice in writing, which
is required under Section 138 (b) of Negotiable
Instrument Act, need not necessarily be only by a
registered post, and it can as well be by a telegram or by
a letter. Service of notice of demand in Clause (b) of
proviso t section 148 is a condition precedent for filing a
complaint under Section 138 of the Negotiable
Instrument Act. Whether the notice was served or not
and how it was served and which service was effected on
the accused person namely, whether by registered post,
or by hand, or by courier, is a matter imposes burden
on the complainant to service of demand notice upon the
accused.
25. In the case of Harman Electronics (P) Ltd. v.
National Panasonic India (P) Ltd., AIR 2009 SC 1168
Hon'ble Apex Court held that as hereunder:-
C.C. No. 5738/2019
' It is one thing to say that sending of a
notice is one of the ingredients for maintaining
the complaint but it is another thing to say
that dishonour of a cheque by itself constitutes
an offence. For the purpose of proving its case
that the accused had committed an offence
under Section 138 of the Negotiable
Instruments Act, the ingredients thereof are
required to be proved. What would constitute
an offence is stated in the main provision. The
proviso appended thereto, however, imposes
certain further conditions which are required
to be fulfilled before cognizance of the offence
can be taken. If the ingredients for constitution
of the offence laid down in provisos (a), (b) and
(c) appended to Section 138 of the Negotiable
Instruments Act are intended to be applied in
favour of the accused, there cannot be any
doubt that receipt of a notice would ultimately
give rise to the cause of action for filing a
complaint. As it is only on receipt of the notice
that the accused at his own peril may refuse to
pay the amount. Clauses (b) and (c) of the
proviso to Section 138 therefore must be read
together. Issuance of notice would not by itself
give rise to a cause of action but
communication of the notice would.'
C.C. No. 5738/2019
26. The requirement of giving notice is mandatory
for maintaining a complaint, but there is no procedure
prescribed under Sec.138 of the NI Act for serving
notice on the accused. Notice means notice in writing
and not a verbal demand to the drawer. The Hon'ble
Apex court in K.Bhaskaran v. Sankaran Vaidhyan
Balan [(1999) 7 Supreme Court Cases 510] held that
once notice has been sent by a registered post with
acknowledgment due in the correct address, it must be
presumed that the service has been made effective. In V.
Rajakumari v. P. Subbarama Naidu [(2004) 8
Supreme 774] it was held that statutory notice under
Section 138(b) of the NI Act sent in the correct address
of the drawer but returned with endorsement must be
presumed to be served on the drawer and the burden to
show that accused/drawer had managed to get an
incorrect postal acknowledgment letter on the
complainant have to be considered during trial and on
the background facts of the case.
C.C. No. 5738/2019
27. The provision under Sec.138 of the NI Act
shows that where a cheque issued by a drawer in
discharge of any debt or liability, in whole or in part, is
returned by the bank unpaid, because of the amount of
money standing to the credit of that account is
insufficient to honour the cheque or that it exceeds the
amount arranged to be paid from that account, such
person shall be deemed to have committed an offence.
This is subject to the proviso to Section 138 that the
cheque should have been presented before the bank
within a period of six months from the date on which it
is drawn or within the period of its validity, whichever is
earlier. The payee must make a demand for the payment
of the said amount of money by giving a notice in
writing, to the drawer of the cheque, within thirty days
of the receipt of information by him from the bank
regarding the return of the cheque as unpaid. In spite of
the demand, if the drawer fails to make the payment of
the said amount of money to the payee within fifteen
days of the receipt of the notice, a cause of action would
C.C. No. 5738/2019
arise for prosecuting him under Section 138 of the NI
Act. It is mentioned under Sec.142 of the NI Act that
the court shall take cognizance of an offence punishable
under Sec.138 of the NI Act upon receipt of a complaint
in writing by the payee or as the case may be, the holder
in due course of the cheque. Proviso to Sec.138(c) says
that such complaint must be made within one month of
the date on which the cause of action arises. However,
discretion has been given to the court to take cognizance
of the complaint after the expiry of the period of
limitation, if the complainant satisfies the court that he
had sufficient reason for not making the complaint
within the limitation period.
28. A bare reading of Sec.138 of the Negotiable
Instruments Act shows that the purport of Sec.138 is to
punish the dishonest drawers of cheque who evade and
avoid their liability. As stated in Clause(b) of the
proviso, the payee or the holder of the cheque in due
course is necessarily required to serve a written notice on
C.C. No. 5738/2019
the drawer of the cheque within 15 days from the date of
intimation received from the bank about the dishonor of
the cheque. It is clear from Sec.27 of the General Clauses
Act, 1897 and Sec.114 of the Evidence Act, 1872, that
once a notice is sent by registered post by correctly
addressing to the drawer of the cheque, the service of
notice is deemed to have been completed. The
requirements under Sec.138(b) stand complied, if notice
is sent in the above prescribed manner. In this context, I
may refer an decision of the Hon'ble Apex court in
M/s. Dalmia Cement (Bharat) Ltd. v. M/s. Galaxy
Traders and Agencies Ltd. [AIR 2001 Supreme Court
676] in which it was held that the presumption is
rebuttable. But, in the subsequent decision M/s.
Harman Electronics (P) Ltd. and Anr. v. M/s.
National Panasonic India Ltd. [AIR 2009 Supreme
Court 1168] it was held that the presumption in support
of service of notice depends upon the facts and
circumstances of each case. In Jagdish Singh v. Natthu
Singh (1992) 1 SCC 647 , State of M.P. v. Hiralal
C.C. No. 5738/2019
(1996) 7 SCC 523 , V. Rajkumari v. P. Subrama
Naidu 2005 SCC (Cri) 393 Hon'ble Apex court held
that when a notice is sent by registered post and is
returned with 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. However, the drawer is at liberty to rebut
this presumption either by adducing evidence or on the
basis of evidence produced by the complainant.
29. The Hon'ble Apex court in New India Sugar
Mills Ltd. v. CST [AIR 1963 SC 1207 ] held that the
interpretation of the statute should be based on the
object which the intended legislation has sought to
achieve, which reads as follows:
"It is a recognized rule of
interpretation of statutes that expressions
used therein should ordinarily be
understood in a sense in which they best
harmonise with the object of the statute,
and which effectuate the object of the
Legislature. If an expression is susceptible
C.C. No. 5738/2019
of a narrow or technical meaning, as well
as popular meaning, the Court would be
justified in assuming that the Legislature
used the expression in the sense which
would carry out its object and reject that
which renders exercise of its power
invalid."
30. My attention has been drawn to the decision of
the Hon'ble Apex court reported in D. Vinod
Shivappa v. Nanda Belliappa [(2006) 6 Supreme Court
Cases 456] which reads as follows:
"14. If a notice is issued and served
upon the drawer of the cheque, no
controversy arises. Similarly if the notice is
refused by the addressee, it may be
presumed to have been served. This is also
not disputed. This leaves us with the third
situation where the notice could not be
served on the addressee for one or the
other reason, such as his non-availability at
the time of delivery, or premises remaining
locked on account of his having gone
elsewhere, etc. etc. If in each such case the
law is understood to mean that there has
been no service of notice, it would
completely defeat the very purpose of the
C.C. No. 5738/2019
Act. It would then be very easy for an
unscrupulous and dishonest drawer of a
cheque to make himself scarce for some
time after issuing the cheque so that the
requisite statutory notice can never be
served upon him and consequently he can
never be prosecuted. There is good
authority to support the proposition that
once the complainant, the payee of the
cheque, issues notice to the drawer of the
cheque, the cause of action to file a
complaint arises on the expiry of the
period prescribed for payment by the
drawer for the cheque. If he does not file a
complaint within one month of the date on
which the cause of action arises under
clause (c) of the proviso to Section 138 of
the Act, his complaint gets barred by time.
Thus, a person who can dodge the postman
for about a month or two, or a person who
can get a fake endorsement made regarding
his non-availability can successfully avoid
his prosecution because the payee is bound
to issue notice to him within a period of 30
days from the date of receipt of
information from the bank regarding the
return of the cheque as unpaid. He is,
therefore, bound to issue the legal notice
which may be returned with an
C.C. No. 5738/2019
endorsement that the addressee is not
available on the given address.
31. We cannot also lose sight of the fact that the
drawer may by dubious means manage to get an
incorrect endorsement made on the envelope that the
premises has been found locked or that the addressee was
not available at the time when postman went for delivery
of the letter. It may be that the address is correct and
even the addressee is available but a wrong endorsement
is manipulated by the addressee. In such a case, if the
facts are proved, it may amount to refusal of the notice.
If the complainant is able to prove that the drawer of the
cheque knew about the notice and deliberately evaded
service and got a false endorsement made only to defeat
the process of law, the court shall presume service of
notice. This, however, is a matter of evidence and proof.
Thus even in a case where the notice is returned with the
endorsement that the premises has always been found
locked or the addressee was not available at the time of
postal delivery, it will be open to the complainant to
C.C. No. 5738/2019
prove at the trial by evidence that the endorsement is not
correct and that the addressee, namely, the drawer of the
cheque, with the knowledge of the notice had
deliberately avoided to receive notice.
32. In the above decision, it is held that each
question with regard to the service of notice has to be
answered by reference to the facts of the case and no rule
of universal application can be laid down in all cases
when notice is not served on account of non availability
of the addressee in the given address. If notice is served
upon the drawer of the cheque, no controversy arises.
However, if the addressee refuses the notice it may be
presumed that the notice have been properly served.
Another situation is that the notice could not be served
on the addressee on the ground of his non availability at
the time of delivery or the house is remaining locked on
account of his non availability in the station or in India
or he has gone elsewhere permanently etc., in each such
cases it means that there has been no service of notice. If
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there is no service of notice in the aforesaid grounds, it
would completely defeat the purpose of the Negotiable
Instrument Act. If complainant is able to prove that the
drawer of the cheque knew about the notice and
deliberately evaded from the premises making a false
endorsement, it will defeat the process of law and in such
situation the apex court held that the Court shall
presume that there was proper service of notice. This is
really a matter of evidence and proof. Therefore, if the
service of notice is fraudulently refused or avoided by the
accused in an unscrupulous manner, that is a matter of
evidence and that fact can be proved on the basis of
evidence.
33. In this case, the complainant knew that the
accused is not available in his residence, even then, he
issued a notice under Sec.138(b) of the NI Act. The
complainant has no case that the accused deliberately
evaded from his residence in order to avoid service of
notice. On the other hand, when complainant issued
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notice under Section 138(b) of the NI Act, he knew that
the accused is not residing in the given address, the
question arises is whether the said service of notice in the
available address is sufficient for proper compliance of
Sec.138(b) of the Negotiable Instrument Act. If the
complainant is able to prove that the drawer of the
cheque deliberately evaded service, then the presumption
of service will attract. On the other hand, if the
registered notice as contemplated under Section 138(b) of
the Negotiable Instrument Act was issued by the
complainant but it was returned with endorsement
"addressee left" and the complainant at the time of
issuance of notice knew that the accused vacated the
house there is no deliberate avoidance of notice and it is
presumed that there is no notice under Section 138(b)
and no presumption of service can be drawn against the
drawer. In such a situation, prosecution under Section
138 of the Negotiable Instrument Act is not possible and
the complainant will have every right to approach the
civil court for proper remedies. However, no evidence
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has been adduced by the complainant with regard to the
knowledge of the accused about notice. Therefore, the
endorsement made by the postal authorities in the notice
itself is not sufficient to draw a presumption of service of
notice. An enquiry with regard to the knowledge of non
availability at the residence is necessary in this matter.
The evidence in a case can be given of fact in issue and
relevant fact alone. The court is bound to prevent
admission of inadmissible evidence. When the relation of
a relevant fact to the fact in issue is proximate it is called
direct evidence and is admissible. The credibility of a fact
depend upon various factors. If one witness has no
knowledge of a fact the evidence given by that witness is
worthless. Section 27 of the General Clause Act gives a
presumption of service of notice sent by post and the
dispatcher of the notice can claim the benefit of
presumption of service and it is a rebuttable
presumption. If the evidence of the witness discloses his
inability to speak about the service of notice, it is difficult
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for the court to accept that evidence for drawing the
above presumption.
34. The offence under Sec.138 of the NI Act is not
a natural crime like hurt or other offence under the
Indian Penal Code, but, it is an offence created by a legal
fiction in the statute, transformed civil liability into
criminal liability. The onus of proving all the ingredients
of the offence in a criminal case is on the prosecution.
When an accused person is charged with having
committed an offence, it is for the prosecution to prove
all the ingredients of the offence. It is only when this
burden is discharged, the accused has to explain the
essential elements in the prosecution case which would
negative it. Even after the civil liability transformed into
criminal liability under restricted conditions by
amendment of the Negotiable Instrument Act, by
introducing the relevant provisions, the strict liability
provided for criminal cases has not changed. In this
context, the decision of the Hon'ble Apex court in D.
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Vinod Sivappa v. Nanda Belliappa [(2006) 6 Supreme
Court Cases 456] is relevant.
35. Undoubtedly, the accused has a right to pay the
money within 15 days from the date of the service of
notice and only when it fails to pay, it is open for the
complainant to file a case under Section 138 of the
Negotiable Instruments Act. That being the position and
in the complaint itself having not been mentioned that
the notice has been served, on the assertions made in the
complaint itself is not maintainable. Absolutely, there
is no an iota of evidence on the record to show that legal
notice has been served on the accused. Admittedly, the
complainant has not examined the official of the Postal
Authorities to show that the notice was served on the
accused. Non-examination of postman is fatal to the case
of the complainant. Therefore, the contention of
complainant that the notice was severed on accused
cannot be acceptable.
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36. Admittedly, once the cheque relates to the
account of the accused and he accepts and admits his
signature on the cheque, then initial presumption as
contemplated u/Sec.139 of N.I. Act has to be raised by
the court in favour of the complainant. The presumption
referred to u/Sec.139 of N.I. Act is a mandatory
presumption and not a general presumption. But, the
accused is entitled to rebut the said presumption by
probable and acceptable evidence. Admittedly, in this
case, the accused had not taken any legal action against
the complainant after receipt of the notice to recover the
cheque in issue from him. Merely, the accused has not
taken legal action against the complainant is not sufficient
to draw the presumption against him, because in this
case, the complainant failed to prove and establish his
case beyond all reasonable doubt. In this case, the
complainant failed to prove the existence of legally
enforceable debt. Hence, I answer point No.1 in the
"Negative".
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POINT No. 2 :-
37. Section 139 of N.I. Act creates presumption that
the cheque received in the nature referred to Section 138
of N.I. Act is always issued in discharge of debt or other
liability. For a successful prosecution of offence under
section 138 of the Act, complainant must allege and
prove that the cheque was drawn or executed by the
accused. In the absence of proof of lending loan to the
accused, presumption cannot be drawn in favour of the
complainant. In this case, the accused had a probable
defence and complainant failed to prove and establish his
case beyond all reasonable doubt. Hence, the benefit of
doubt given to the accused. In view of my findings to the
above point, I proceed to pass the following :
ORDER
The accused is not found guilty of the offence punishable under Section 138 of Negotiable Instruments Act.
Hence, the accused is acquitted acting Under Section 255(1) of Cr.P.C of the charges leveled against her for the offence C.C. No. 5738/2019 punishable under Section 138 of Negotiable Instruments Act.
The bail bond of accused stands cancelled and surety stands disbursed. (Dictated to the Stenographer, transcribed and typed on Lap-top, then corrected by me, Print out taken, signed and then pronounced by me in the open court on this the 20th day of May 2023) (K. LAKSHMI) IV Addl. SCJ & ACMM., Bengaluru.
C.C. No. 5738/2019 ANNEXURE List of witnesses Examined for Prosecution:
PW.1 : Sathish Kumar List of documents marked for prosecution :
Exp.1 : Cheque Exp.1(a) : Signature of accused Exp.2 : Office copy of Legal notice Exp.3 : Postal Receipt Exp.4 : Postal Cover Exp.5 : Postal Track Exp.6 : Bank Statement List of witnesses examined for accused :
DW-1 : Fazlul Hassan Zahid List of documents marked for accused :
ExD.1&2 : C/c of ordersheet and plaint in O. S. No. 3390/2019 ExD.3 : C/c of MOU dtd: 29.04.2016 (K. LAKSHMI) IV Addl. SCJ & ACMM., Bengaluru.
C.C. No. 5738/2019 Due to rush of work Judgment not ready. For Judgment 28.04.2023.
IV ASCJ & ACMM C.C. No. 5738/2019 Dt: 28.04.2023 Due to rush of work Judgment not ready. For Judgment 20.05.2023.
IV ASCJ & ACMM Dt: 20.05.2023 C-
A-
For Judgment (Order pronounced in open court vide separate judgment) ORDER The accused is not found guilty of the offence punishable under Section 138 of Negotiable Instruments Act.
Hence, the accused is acquitted acting Under Section 255(1) of Cr.P.C of the charges leveled against her for the offence punishable under Section 138 of Negotiable Instruments Act.
The bail bond of accused stands cancelled and surety stands disbursed.
(K. LAKSHMI) IV Addl. SCJ & ACMM, Bengaluru.
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