Telangana High Court
S.Pavan Kumar, R.R.Dt., vs State Of Telangana, Rep Pp Anr., on 14 September, 2022
Author: G. Radha Rani
Bench: G. Radha Rani
HON'BLE Dr. JUSTICE G. RADHA RANI
CRIMINAL REVISION CASE No.103 of 2015
ORDER:
This Criminal Revision Case is filed by the petitioner-appellant- accused against the judgment passed in Crl.A. No.704 of 2012 dated 18.12.2014 by the Additional Metropolitan Sessions Judge, Ranga Reddy District at L.B.Nagar confirming the conviction and sentence passed in CC No.108 of 2011 dated 26.11.2012 on the file of the VI Special Magistrate, Hasthinapuram, Ranga Reddy District.
2. The parties are hereinafter referred as per their array before the trial court.
3. The case of the complainant was that the complainant and the accused were known to each other and out of the said acquaintance, the accused approached the complainant and requested for a hand loan of Rs.4,50,000/- and on 07.11.2008, the complainant advanced an amount of Rs.4,50,000/- by way of cash. The accused acknowledged the same and executed an agreement dated 07.11.2008 in favour of the complainant and issued two post dated cheques bearing No.634619 dated 20.11.2008 for Rs.50,000/- and another bearing No.634621 dated 15.12.2008 for Rs.4,00,000/- drawn on Development Credit Bank Limited, Gaddiannaram Dr.GRR,J 2 Crl.R.C. No.103 of 2015 branch for discharging the liability to repay the said hand loan. The complainant deposited the said cheques for clearance in the bank, but the cheques were returned unpaid on 19.05.2009 with an endorsement 'account closed'. The complainant informed the same to the accused and demanded to repay the amount forthwith, but the complainant failed to pay the loan amount as such, the complainant got issued a legal notice dated 23.05.2009. The same was sent through RPAD and UCP. The notice sent through RPAD was returned with an endorsement 'addressee left'. The complainant alleged that the letter sent through UCP was deemed to have been received by the accused and the accused neither gave any reply nor repaid the amount, hence, preferred the private complaint.
4. The case was tried by the VI Special Magistrate, Hasthinapuram, R.R. District. During the course of trial, the complainant examined himself as PW.1 and got examined the Branch Manager of Development Credit Bank (DCB), Gaddiannaram Branch as PW.2. Exs.P1 to P12 were marked on behalf of the complainant. Ex.D1 was marked for the accused. The defence taken by the accused was that he never executed the agreement dated 07.11.2008, marked under Ex.P1, nor issued the cheques marked under Exs.P2 and P3 and he had not received the notice under Dr.GRR,J 3 Crl.R.C. No.103 of 2015 Exs.P7 and P8. He was residing at Aliabad, Shamirpet Mandal and filed Ex.D1, the photostat copy of his household card in proof of the same.
5. The trial court, after considering the oral and documentary evidence on record and as the accused had not disputed his signatures on the cheques, by considering the presumptions under Sections 118 and 139 of Negotiable Instruments Act and under Section 27 of General Clauses Act and Section 114 of the Evidence Act that the notice was sent to the correct address of the accused, found the accused guilty for the offence under Section 138 of the NI Act, and sentenced him to undergo simple imprisonment for a period of one year and directed to pay compensation of Rs.7,00,000/- and out of that compensation Rs.6,75,000/- to be paid to the complainant.
6. Aggrieved by the said judgment of conviction and sentence imposed against him, the accused preferred an appeal. The appeal was heard by the Additional Metropolitan Sessions Judge, R.R. District at L.B. Nagar and on re-appreciating the evidence on record, the appellate court dismissed the appeal confirming the judgment passed by the VI Special Magistrate, Hyderabad, RR District in CC No.108 of 2011.
Dr.GRR,J 4 Crl.R.C. No.103 of 2015
7. Aggrieved further, the accused preferred this revision contending that the courts below failed to appreciate the evidence on record in proper perspective and committed illegality in convicting and sentencing him on the basis of presumptions and assumptions. The trial Judge ought not to have held that Ex.P1 was proved which was contrary to Section 114 of Indian Evidence Act. The courts below failed to see that statutory notice under Ex.P.7 was not served. The presumption of drawing the inference of the address written on it as deemed service under General Clauses Act, was contrary to law. The learned Judge failed to appreciate Ex.D1 filed in support of proof of his residence. The accused discharged his burden of non-service of notice under Ex.D1 by rebutting the presumption under Indian Evidence Act. The complainant failed to prove that Ex.P.1 was executed at the address given in it and prayed to set aside the judgment of conviction and sentence passed by the courts below.
8. Heard learned counsel for the petitioner-accused and the learned counsel for the respondent-complainant.
9. The learned counsel for the petitioner - accused argued on the same lines as raised in the grounds of revision and contended that the accused never obtained any hand loan and denied execution of Exs.P1 to Dr.GRR,J 5 Crl.R.C. No.103 of 2015 P5. He contended that Ex.P1 agreement did not contain the signatures of any witness. The complainant had no capacity to lend the amount and failed to prove the mandatory requirements of Section 138 of NI Act. Both the trial court and the appellate court ignored the same and convicted the accused and sentenced him and relied upon the judgments of the Hon'ble Apex Court in Jugesh Sehgal v. Shamsher Singh Gogi1; Rangappa v. Sri Mohan2 on the aspect that the standard of proof for rebutting the presumption under Section 139 of the NI Act was that of preponderance of probabilities, that the accused could rely on the material submitted by the complainant and need not raise such a defence,
10. He further contended that the accused was not residing at Malakpet. Summons were also not served on the accused. He was produced before the trial court on execution of NBW. The household card, marked under Ex.D1, was issued by the Tahsildar and relied upon the judgment of the Hon'ble Apex Court in Harman Electronics Private Limited and another v. National Panasonic India Private Limited3, wherein it was held that:
"19. Presumption raised in support of service of notice would depend upon the facts and circumstances of each case. Its 1 (2009) 14 SCC 683 2 (2010) 11 SCC 441 3 (2009) 1 SCC 720 Dr.GRR,J 6 Crl.R.C. No.103 of 2015 application is on the question of law or the fact obtaining.
Presumption has to be raised not on the hypothesis or surmises but if the foundational facts are laid down therefor. Only because presumption of service of notice is possible to be raised at the trial, the same by itself may not be a ground to hold that the distinction between giving of notice and service of notice ceases to exist.
20. ... Only on a service of such notice and failure on the part of the accused to pay the demanded amount within a period of 15 days thereafter, commission of offence completes. Giving of notice, therefore, cannot have any precedent over the service."
11. He also relied upon the judgment of the High Court of Jammu and Kashmir at Ladakh in Engineering Control v. Banday Infratech Pvt. Ltd.4 on the aspect that:
"Once the material on record clearly suggests that the statutory notice of demand was sent by the respondent/complainant on a wrong address, the presumption of receipt of notice by the petitioner/accused does not arise. Thus, the pre-condition of filing a complaint under Section 138 of the NI Act of sending a statutory notice has not been satisfied in the present case. Therefore, no cause of action arose in favour of the respondent/complainant to file the subject complaint. He, therefore, could not have instituted the complaint nor the trial court could have taken cognizance of the offence and issued process against the petitioner."
12. He further relied on the judgment of this Court in K. Ashok Kumar Goud v. Sree Ramulu and another5 on the aspect that the complainant failed to establish his source of income to lend the amount of Rs.4,50,000/-.
4 2022 SCC OnLine J&K 540 5 2017 (1) ALT (CRI.) 320 (S.B.) Dr.GRR,J 7 Crl.R.C. No.103 of 2015
13. The learned counsel for the respondent-complainant submitted that both the trial court as well as the appellate court on considering the evidence on record and the defence taken by the accused had passed reasoned orders. The concurrent findings of the courts below would not need any interference by this court in the revision and prayed to dismiss the revision case. He relied upon the judgment of the High Court of Kerala in P. Sasidharan v. Selvaraj6 and of the judgment of the Hon'ble Apex Court in Rohitbhai Jivanlal Patel v. State of Gujarat and Anr.7
14. Now the point for consideration is:
Whether the orders of the courts below are in accordance with law and need any interference by this court?
POINT:
15. Section 138 of NI Act reads as follows:
"138. Dishonour of cheque for insufficiency, etc., of funds in the account--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either 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 by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:6
Law Finder Doc Id # 1357270 7 2019 LawSuit (SC) 820 Dr.GRR,J 8 Crl.R.C. No.103 of 2015 Provided that nothing contained in this section shall apply unless--
(a) the cheque has been presented to 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;
(b) the payee or the holder in due course of the cheque, as the case may be, makes 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;
and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.--For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability."
16. The accused took up a defence totally denying the execution of Ex.P.1 and issuance of Exs.P2 and P3 cheques and that he was not residing in the address as mentioned in Ex.P1 or the notice sent to him under Exs.P7 and P8. Exs.P7 and P8 were sent to the address of the accused as mentioned in Ex.P1.
17. The trial court on observing that Ex.P.1 document was executed on 07.11.2008 and the accused mentioned his address as 16-2- 705/9/4 situated at New Malakpet, and that the accused failed to state where he was residing at the time of executing the said document and Ex.D1 was issued in the year 2009 and Ex.D1 did not contain the date and Dr.GRR,J 9 Crl.R.C. No.103 of 2015 signature of the person who issued it and when it was issued, had not believed on Ex.D1 to consider that the accused resided in the said address at the time of executing Ex.P1. The trial Court observed that the reliance placed by the accused on Ex.D1 was an afterthought to avoid the legally enforceable debt.
18. The trial court discussed in detail about the other material papers filed by the complainant to show that the accused was residing along with his father at New Malakpet, at the time of execution of Ex.P1. It discussed that Ex.P9 and P10 statements of account of the accused from 01.09.2006 to 31.03.2007 and the payment of annual maintenance fee dated 11.08.2008 would disclose that as on the date of opening of his bank account in DCB, the accused had shown his address as 16-2-705/4/A, New Malakpet, which was the address given by him in Ex.P1. Ex.P11 the memorandum of deposit of title deed document would disclose that the father of the accused deposited his title deeds to secure the loan borrowed by the accused for setting up a Cool Drinks and Snacks shop and the address specified in the mortgage deed was H.No.16-2-705/9/4/A, considered that the accused deliberately furnished his address as in Ex.P1 and thereafter could have obtained Ex.D1 as an afterthought to avoid legally enforceable debt.
Dr.GRR,J 10 Crl.R.C. No.103 of 2015
19. The trial court also observed that the evidence of PW.2 would disclose that the account bearing No.07611300023630 belonged to the accused and the cheques under Exs.P2 and P3 were pertaining to the accused. The account was opened on 16.09.2006 and was closed by the accused on 29.10.2008 and after closure of the account, executed Ex.P1 on 07.11.2008 and obtained hand loan from the complainant on the said date and issued two posted cheques under Exs.P2 and P3 dated 20.11.2008 and 15.12.2008 after closing his account, only to avoid the legally enforceable debt. The trial Court held that the accused with a malafide intention obtained loan from the complainant and issued the cheques without any amount to avoid payment.
20. As the accused had not denied his signatures on Exs.P2 and P3, the trial court compared the signatures of the accused on Exs.P2 and P3 with that of Ex.P1 and opined that Ex.P1 was executed by the accused. The trial court also brushed aside the defence taken by the accused that the complainant had no capacity to lend the amount of Rs.4,50,000/- to the accused and placed reliance upon the judgment of this Court in M. Vidyavathi v. Chandraiah @ Chandrababu and another8, wherein it was held that capacity to lend the amount is not an ingredient for the 8 2010 (1) ALT (Crl.) 347 (AP) Dr.GRR,J 11 Crl.R.C. No.103 of 2015 offence punishable U/Sec.138 of the Negotiable Instruments Act and that the complainant had no necessity to establish his financial capacity.
21. The Hon'ble Apex Court in Rangappa's case (2 supra) held that the presumption mandated by Section 139 of NI Act includes a presumption that there existed a legally enforceable debt or liability. Section 139 of NI Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of Negotiable Instruments. While Section 138 of NI Act specified a strong criminal remedy in relation to the dishonour of cheques, the rebuttal presumption under Section 139 is a device to prevent undue delay in the course of litigation. It was held that:
"27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard of proof.
28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position Dr.GRR,J 12 Crl.R.C. No.103 of 2015 that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
22. But, the accused failed to rebut the presumption by raising any probable defence. He failed to explain how the cheques issued by the Bank to him went into the hands of the complainant. Hence the trial Court had rightly taken the aid of the presumptions under Section 118 and 139 of NI Act to consider that the accused issued Exs.P2 and P3 cheques to discharge the legally enforceable debt. The trial court also rightly considered that the accused resided in the address mentioned under Ex.P1 along with his father at the New Malakpet house by placing reliance on Exs.P9, P10 and P11 and considered that the notice was sent to the correct address of the accused as mentioned by him in Ex.P1 and hence had taken the aid of the presumptions under Section 27 of the General Clauses Act and Section 114 of the Evidence Act to consider that there was proper service of notice.
23. The appellate court also on re-appreciating the evidence observed that the legal notice was sent to the correct address of the accused Dr.GRR,J 13 Crl.R.C. No.103 of 2015 and it was not known when Ex.D1 was issued; when the accused himself furnished his address at New Malakpet by executing the undertaking letter Ex.P1, he could not state contrary to his undertaking letter; the accused though alleged that he did not execute the promissory note, undertaking and the cheques, had not taken any steps to get them examined through an expert; when legal notice was issued, he took up a false plea stating that he was staying at Shamirpet Mandal, as such, upheld the judgment passed by the VI Special Magistrate, Cyberabad.
24. The learned counsel for the respondent-complainant relied upon the judgment of the Hon'ble Apex Court in Rohitbhai Jivanlal Patel's case (7 supra), wherein it was held that:
"17. 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 accused-appellant. The aspect relevant for consideration had been as to whether the accused-appellant has brought on record such facts/material/ circumstances which could be of a reasonably probable defence."
Dr.GRR,J 14 Crl.R.C. No.103 of 2015
25. In this case also, the accused failed to discharge his burden by bringing on record the material evidence to tilt the preponderance of probabilities in his favour. As such, this Court does not find any merit in the contention of the learned counsel for the revision petitioner-accused to set aside the well reasoned judgments of the courts below passed in accordance with law.
26. In the result, the Criminal Revision Case is dismissed confirming the judgment dated 18.12.2014 passed in Criminal Appeal No.704 of 2012 on the file of Additional Metropolitan Sessions Judge, Cyberabad, Ranga Reddy District. The bail granted to the petitioner-accused shall stand cancelled. The petitioner-accused is directed to surrender before the trial court forthwith and in case he fails to do so, the trial court is directed to take steps in accordance with law to take him into custody.
Pending miscellaneous petitions, if any, shall stand closed.
_____________________ Dr. G. RADHA RANI, J September 14, 2022 KTL