Karnataka High Court
Sri. Sudhir Kumar vs Smt. Geetha on 23 February, 2024
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CRL.A.No. 1065 of 2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE ANIL B KATTI
CRIMINAL APPEAL NO. 1065 OF 2015 (A)
BETWEEN
SRI. SUDHIR KUMAR
AGED ABOUT 51 YEARS
R/AT "AMIN VILLA"
KATEEL ROAD, BAJPE
MANGALORE-574 142
...APPELLANT
(BY SRI VINAYAKA S., ADVOCATE FOR
SRI S RAJASHEKAR, ADVOCATE)
AND
SMT. GEETHA
W/O MR. SANTHU ALIAS JAGANNATH
AGED ABOUT 40 YEARS
R/AT PADIL CROSS ROAD
BATRAKERE, PERMUDE
MANGALORE-574 142
....RESPONDENT
(BY SRI VEERESH M.UPPIN, ADVOCATE FOR
SRI K.CHANDRANATH ARIGA, ADVOCATE)
THIS CRL.A. FILED U/S.378(4) CR.P.C., PRAYING TO SET
ASIDE THE ORDER DATED 31.7.2015 PASSED BY THE J.M.F.C.-
IV, MANGALURU IN C.C.NO.1195/2014 - ACQUITTING THE
RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF
N.I.ACT.
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
13.02.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT
THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
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CRL.A.No. 1065 of 2015
JUDGMENT
Appellant/complainant feeling aggrieved by judgment of Trial Court on the file of JMFC-IV Court, Mangaluru in C.C.No.1195/2014 dated 31.07.2015, preferred this appeal.
2. Parties to the appeal are referred with their ranks as assigned in the Trial Court for the sake of convenience.
3. Heard the arguments of both sides.
4. After hearing arguments of both sides and on perusal of Trial Court records, so also the impugned judgment under appeal, the following points arise for consideration:
1) Whether the impugned judgment under appeal 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. 1065 of 2015
5. On careful perusal of oral and documentary evidence placed on record, it would go to show that in the month of June 2012 accused approached the complainant for hand loan of Rs.4,50,000/- for her urgent legal necessity. Complainant has paid Rs.4,50,000/- to accused, who had undertaken to repay the same within a short period of time. Accused in order to discharge legally enforceable debt issued cheque bearing No.799877 dated 02.04.2013 drawn on Karur Vysya Bank Ltd., Karangalpady, Mangaluru - Ex.P1. Complainant presented the said cheque for encashment through his banker and the same was dishonoured vide Bank endorsement - Ex.P2 dated 04.04.2013. Complainant issued demand notice dated 29.04.2013 - Ex.P3 through RPAD. The postal receipt is produced at Ex.P4 and undelivered envelope sent through RPAD is produced at Ex.P5 and the notice contained in the said envelope was opened and marked as Ex.P5(a). If the above referred documents are perused and appreciated with oral testimony of PW.1, then it would go to show that complainant has complied all the necessary legal requirements in terms of Section 138(a) to -4- CRL.A.No. 1065 of 2015
(c) of Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as "N.I.Act"). Complainant has filed a complaint on 10.06.2013 within a period of one month from the date of accrual of cause of action in terms of Section 142(1)(b) of N.I.Act. Therefore, statutory presumption in terms of Sections 118 and 139 of the NI 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.
7. It is also profitable to refer another judgment of Hon'ble Apex Court in P. Rasiya vs. Abdul Nazer and -5- CRL.A.No. 1065 of 2015 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 it is 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 accused to place rebuttal evidence to displace the -6- CRL.A.No. 1065 of 2015 statutory presumption available in favour of the complainant.
8. It is now upto the accused to place rebuttal evidence to displace the statutory presumption available in favour of complainant. Accused to her defence apart from relying on the materials produced by complainant, also relied on the evidence of DWs.1 to 3 and the documents - Exs.D1 to D7 and Ex.C1 - Vakalath, came to be marked during the evidence of DW.1. Whether the said rebuttal evidence placed on record by accused would be sufficient to displace the statutory presumption available in favour of complainant or not is to be decided.
9. It is the specific defence of accused that demand notice dated 29.04.2013 - Ex.P3 issued by the complainant is not duly served to the accused. Secondly, there is no loan transaction of accused with complainant and lastly complainant has no financial capacity to lend the money of Rs.4,50,000/- covered under Ex.P1. Whether the said defence has been probabalised by the accused out of the evidence placed on record or not has to be decided. -7- CRL.A.No. 1065 of 2015
10. Complaint averments and also during the course of evidence, complainant has claimed that on receipt of intimation of dishonour of cheque Ex.P2 on 04.04.2013, issued demand notice dated 29.04.2013 - Ex.P3 through RPAD. The undelivered postal envelope bears the endorsement of the postal authority that the addressee 'not claimed' the consignment in spite of service of Ex.P5. The Trial Court by order dated 10.10.2013, has ordered to issue summons to accused through RPAD on the same address as given in the complaint. The postal endorsement would go to show that the addressee has refused to receive the consignment. Accused after appearing in this case has not disputed the correctness of the address shown in the complaint. DW.1 in her examination-in-chief has stated that she is available in the house always and never refused the notice. DW.1 has stated in her evidence that she is residing at Batrekere, Mangaluru. Therefore, in view of the aforementioned postal endorsement and the evidence of PW.1, it is evident that the accused is residing at the address given in the -8- CRL.A.No. 1065 of 2015 Complaint. When the notice is sent to the correct address of the accused through registered post and the same is returned with postal endorsement that addressee 'not claimed' the consignment, then it will have to be held that there is deemed service of demand notice.
11. In this context of the matter, it is useful to refer 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 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 -9- CRL.A.No. 1065 of 2015 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, the communication would have been delivered at the address of the addressee. But the 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 expression 'serve' or either of the 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
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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."
12. 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 that 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 is sent by registered post and is returned with a postal endorsement "refused" or "not available in the house" or "house locked"
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or "shop closed" or "addressee not in station", due service has to be presumed.
Therefore, in view of the principles enunciated in the judgment and also the aforementioned evidence on record, the contention of accused that demand notice -
Ex.P3 is not duly served to the accused cannot be accepted.
13. The accused has not replied to the demand notice issued by the complainant. Accused after appearance in this case has also not made any application disclosing the defence before seeking permission to cross- examine PW.1. Thus, the accused on the first available opportunity has failed to make proper foundation to put- forthing her defence. However, though the accused has not replied to the demand notice, she is not prevented from put forth her defence and bring material evidence in the cross-examination of PW.1 and also can place her independent evidence to probabalise her defence.
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CRL.A.No. 1065 of 2015
14. Accused got herself examined as DW.1 and she has deposed to the effect that she has not taken any loan from the complainant in the year 2012 and she has completed construction of her house in the year 2010. She was having no financial necessity in the year 2009 or 2012. She further deposed to the effect that complainant had agreed to arrange for sale of the property belongs to his father-in-law and taken advance amount of Rs.70,000/-. However, complainant did not arrange for sale of property of his father-in-law and did not return the advance amount. She further deposed to the effect that the complainant has taken loan from the Society and she was surety for the said amount and she has not written the contents of cheque - Ex.P1. She further states that the demand notice issued by the complainant is not served on her.
15. DW.2 is General Manager of Bajpe Vyavasaya Seva Sahakari Sangha and spoken about the documents - Exs.D2 to D4.
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CRL.A.No. 1065 of 2015
16. DW.3 is a Manager of Karur Vysya Bank. He has deposed about issuance of cheque book to the accused on the account maintained by her in the Bank and the certified copy of cheque issue register pertaining to the said Bank is marked as Ex.D6. DW.3 further deposed to the effect that after 2012-2013 Bank is not issuing the Cheque Book as appearing in cheque - Ex.P1, instead issuing CTS cheque (Clearance System Cheque).
17. It is the specific case of complainant that accused has taken hand loan of Rs.4,50,000/- on 15.06.2012. On the same line, demand notice has been issued - Ex.P3. However, for the first time during the course of his evidence before the Court in the Chief Examination by way of affidavit of PW.1, given totally different version than what was stated in the complaint. In order to better appreciate the evidence on record, it is appropriate to reproduce paragraph Nos.2 and 3 of Chief Examination by way of affidavit of PW.1, which reads as under:
"2. I say that, the accused approached me for a loan of Rs.4,50,000/- (Rupees four lakhs fifty
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thousand only) for her urgent and legal necessity. I have paid her a sum of Rs.3,00,000/- (Rupees three lakhs only) by way of cheque bearing No.00443690 drawn on Canara Bank, Permude dated 22.07.2009 and remaining amount of Rs.1,50,000/- (One Lakh fifty thousand only) paid in cash.
3. I say that, in the complaint filed by me in this case I have wrongly mentioned that I have paid the amount to the accused in the month of June 2012 as by hand loan and also in the notice issued by me dated 29.04.2014 in that also wrongly mentioned that I have paid the amount in cash on 15.06.2012 instead of Rs.3,00,000/- (Rupees three lakhs only) by way of cheque bearing No.00443690 drawn on Canara Bank, Permude dated 22.07.2009 and remaining amount of Rs.1,50,000/- (Rupees One Lakh Fifty Thousand only) paid in cash."
18. If the above referred evidence of PW.1 in examination-in-chief is perused, then it would go to show that complainant has improvised his contention than what he has pleaded in the complaint. Whereas the complainant in the cross-examination on page No.7 in last para has stated that he has paid cash to accused in three installments. But he do not remember when he has paid the money by installments. The said material evidence
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CRL.A.No. 1065 of 2015placed on record by the complainant himself, it would go to show that the complainant has not paid cash of Rs.4,50,000/- on 15.06.2012 as stated in examination-in- chief or in the month of June 2012 as stated in paragraph No.1 of complaint. Complainant has not produced any documents to show that as to how in three installments cash amounting to Rs.4,50,000/- was paid to the accused.
19. If the evidence of PW.1 is to be accepted that he has given cash of Rs.3 Lakhs by way of cheque on 22.07.2009 and remaining amount he has paid in cash i.e., Rs.1,50,000/-, then complainant has not substantiated as to when cash of Rs.1,50,000/- was paid, since according to the complainant in the cross- examination he has given money to the accused in three installments on different dates.
20. Complainant has produced the Bank statement of his account - Ex.P6 to show that he has paid Rs.3 Lakhs by way of cheque on 22.07.2009. Complainant first of all has not stated in the complaint that he has issued cheque of Rs.3 Lakhs dated 22.07.2009 to the accused. The
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CRL.A.No. 1065 of 2015transaction in question covered under Ex.P1 took place in the year 2012 and the cheque in question - Ex.P1 came to be issued on 02.04.2013. Complainant remained silent for more than 2 years 11 months from the date of alleged payment by way of cheque dated 22.07.2009 shown in Ex.P6. Complainant has failed to establish the nexus between the alleged payment of Rs.4,50,000/- in the name of accused to the one covered under Ex.P1. This silence of complainant over a long period of time would create a serious doubt regarding issuance of cheque - Ex.P1 for lawful discharge of debt.
21. Learned counsel for accused in support of his contention that time barred debt cannot be legally enforceable debt placed reliance on the Co-ordinate Bench Judgment of this Court in The Bidar Urban Co-operative Bank Ltd., Bidar Vs. Girish reported in ILR 2021 KAR 2437 and another Co-ordinate Bench Judgment of Kerala High Court in Joseph Vs. Devassia reported in 2001 Crl. L.J. 24, in both the aforementioned judgments, it has been held that time barred debt is not a legally
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CRL.A.No. 1065 of 2015enforceable debt and penal action in terms of Section 138 of the NI Act is not attracted.
22. Learned counsel for complainant relied on the Judgment of the Hon'ble Apex Court in A.V. Murthy Vs. B.S. Nagabasavanna reported in (2002)2 SCC 642, wherein, it has been observed and held as under:-
"In view of Sections 118 and 139 of the Negotiable Instruments Act, Section 25(3) of the Contract Act, 1872 and in the presence of a documentary evidence which might amount to acknowledgment reviving the period of limitation, the present case was not one where the cheque was drawn in respect of a debt or liability, which was completely barred from being enforced under law. However, these are matters to be agitated before the Magistrate by way of defence of the respondent. But at this stage of the proceedings, to say that the cheque drawn by the respondent was in respect of a debt or liability which was not legally enforceable, was clearly illegal and erroneous."
23. Learned counsel for complainant also seeks to rely on the Division Bench Judgment of Hon'ble Bombay High Court in Dinesh B. Chokshi Vs. Rahul Vasudeo Bhatt reported in 2013 (2) Mh.L.J., whereunder the
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CRL.A.No. 1065 of 2015matter was referred to Division Bench for deciding the two questions formulated by the learned Single Judge under his Judgment and Order dated 23.12.2008, which reads as under:-
"(i) Does the issuance of a cheque in repayment of a time barred debt amount to a written promise to pay the said debt within the meaning of section 25(3) of the Indian Contract Act, 1872?
(ii) If it amounts to such a promise, does such a promise, by itself, create and legally enforceable debt or other liability as contemplated by section 138 of the Negotiable Instruments Act, 1881?"
The Division Bench of Hon'ble Bombay High Court after having considered the provisions of NI Act has answered the reference in paragraph Nos.20 and 21, which read as follows:-
"20. While recording our answer to the first question, we have already held that a cheque issued for discharge of a debt which is barred by law of intimation is itself a promise within the meaning of sub-section (3) of section 25 of the Contract Act. A promise is an agreement and such promise which is covered by section 25(3) of the Contract Act
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becomes enforceable contract provided that the same is not otherwise void under the Contract Act.
21. Therefore, while answering second question, we are specifically dealing with a case of promise created by a cheque issued for discharge of a time barred debt or liability. Once it is held that a cheque drawn for discharge of a time barred debt creates a promise which becomes enforceable contract, it cannot be said that the cheque is drawn in discharge of debt or a liability which is not legally enforceable. The promise in the form of a cheque drawn in discharge of a time barred debt or liability becomes enforceable by virtue of sub-section (3) of section 25 of the Contract Act. Thus, such cheque becomes a cheque drawn in discharge of a legally enforceable debt as contemplated by the explanation to section 138 of the said Act of 1881. Therefore, even the second question will have to be answered in the affirmative."
24. Learned counsel for complainant also placed reliance on the Judgment of Hon'ble Bombay High Court in M. Shantilal & Co. Vs. Abbaji Maruti Jadhav and Another reported in 2019 SCC OnLine Bom 4356, wherein, by referring to the Division Bench Judgment of Hon'ble Bombay High Court in Dinesh B. Chokshi's case (supra), held in paragraph No.11 as under:-
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"In the circumstances, once a cheque is drawn for discharge of a time barred debt, it creates a promise which becomes an enforceable contract and therefore, it cannot be said that the cheque is drawn in discharge of debt or liability which is not legally enforceable. Therefore, I am satisfied that the impugned judgment dated 16.9.1998 has to be set aside and is hereby set aside. The matter is remanded to the trial court to decide, based on the evidence already recorded, whether the complaint has proved the ingredients of offence punishable under Section 138 of the Negotiable Instrument Act 1881."
Therefore, in view of the principles enunciated in the aforementioned Judgment, it is evident that issuance of a cheque on a time barred debt is enforceable in terms of Section 25(3) of the Indian Contract Act and such debt is legally enforceable debt within the meaning of Section 138 of the NI Act. In the present case, according to the evidence of PW.1 he has paid Rs.3 Lakhs on 22.07.2009 by way of cheque and Rs.1,50,000/- by way of cash as on the date of issuance of cheque on 02.04.2013, it was barred by time. However, in terms of the judgment of Hon'ble Apex Court and Hon'ble Bombay High Court
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CRL.A.No. 1065 of 2015referred supra, the time barred debt is legally enforceable debt.
25. The fact alleged by complainant in the complaint that he has paid Rs.4,50,000/- as hand loan to the accused in the month of June 2012. The said statement is further reiterated in the demand notice - Ex.P3. However, the evidence of PW.1 in examination-in- chief itself as referred above in paragraph Nos.2 and 3 of the affidavit evidence would stand contrary to the pleading in complaint regarding giving hand loan of Rs.4,50,000/- to the accused. Complainant has also failed to establish the nexus between payment of Rs.3 Lakhs by way of cheque on 22.07.2009 - Ex.P6 to the transaction covered under cheque - Ex.P1. Complainant in the cross- examination has given again totally different version that he has given money of Rs.4,50,000/- in three installments to the accused. However, to evidence the said fact there are no any documents or requisite evidence to prove the said fact. The said circumstance would create serious
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CRL.A.No. 1065 of 2015doubt in the claim of complainant that accused has issued cheque in question - Ex.P1 for lawful discharge of debt.
26. It is in the evidence of DW.1 regarding complainant taking advance of Rs.70,000/- for sale of open space belongs to his father-in-law. The documents at Exs.D2 to D7 would go to show that accused and her husband is known to complainant and there are transaction between complainant and accused. Further, accused was also surety for the loan transaction of complainant in the Society. The deposit of Rs.3 Lakhs by way of cheque shown in Ex.P6 is dated 22.07.2009 would go to show that there was earlier transaction of complainant with accused. Complainant has failed to establish the nexus of the said transaction evidence from Ex.P6 with the transaction covered under cheque - Ex.P1. Therefore, the possibility of complainant coming in possession of the cheque of accused with respect to any earlier transaction cannot be totally ruled out. There is reasonable doubt regarding issuance of cheque - Ex.P1 for lawful discharge of debt. The Trial Court has rightly
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CRL.A.No. 1065 of 2015appreciated the oral and documentary evidence placed on record in holding that the complainant has failed to prove that accused has issued the cheque in question - Ex.P1 for lawful discharge of debt. The said findings recorded by the Trial Court is based on the material placed on record and the same does not call for any interference by this Court. Consequently, proceed to pass the following:
ORDER Appeal filed by appellant/complainant is hereby dismissed as devoid of merits.
Registry to send back the records to Trial Court with a copy of this order.
SD/-
JUDGE cp*