Bangalore District Court
Sri Kali Indane Gas Agency Rep By ... vs T M Sundaresh Dead By Lrs A) T A ... on 28 May, 2024
1 Crl.A.No.286/2024
KABC010043552024
IN THE COURT OF LXXXI ADDL. CITY CIVIL AND
SESSIONS JUDGE, BENGALURU (CCH-82)
Present:
Sri Santhosh Gajanan Bhat,B.A.Law., LL.B.,
LXXXI Addl. City Civil & Sessions Judge,
Bengaluru City (CCH-82)
(Special Court exclusively to deal with criminal cases
related to former and elected MPs/ MLAs in the State of Karnataka)
Dated this the 28th day of May, 2024
Crl.A. No.286 / 2024
APPELLANTS: 1. Sri Kaali Indane Gas Agency
represented by its Proprietor
Sri Suni S/o Venkatesha Hegde
R/at: Subhash Road
Haliyal, North Karnataka District
2. Sri Suni S/o Venkatesha Hegde
Aged about 38 years
R/at: Haliyal, North Karnataka District
(Sri Srinivasa Rao S.S., Advocate for
Appellants)
V/s
RESPONDENT : Sri T.M.Sundaresh
Dead by LRs
(a) Smt.T.A.Nandakumari
Aged about 63 years
W/o late Sri T.A.Sundaresh
2 Crl.A.No.286/2024
(b) Smt.Komala T.S.
W/o Sri Lokesh D.V.
Aged about 43 years
Both are resident at
Komala Nilaya
Officers Layout
Doddaiahanapalya
Halepalya Post,
Tiptur-572 201
(Sri K.A.Chandrashekara, Advocate for
Respondent)
JUDGMENT
This Criminal Appeal is filed U/Sec.374(3) of the Code of Criminal Procedure, 1973 ('Cr.P.C.' for short) by the appellants/ accused being aggrieved by the judgment and order of conviction passed by the XLII Additional Chief Metropolitan Magistrate, Bengaluru in C.C.No.5808/2023 (Old CC No.968/2009) dated 17.01.2024, wherein, the accused was convicted for offence punishable under Sec.138 of the Negotiable Instruments Act and was sentenced to pay a fine of Rs.60,10,000/- (Rupees Sixty lakhs Ten Thousand only) and in default to undergo simple imprisonment for a period of one year.
3 Crl.A.No.286/2024
2. The parties are addressed to their original rankings as that of the trial court for the sake of convenience.
3. Before adumbrating on the grounds urged by the appellants/ accused herein, it would be appropriate to recapitulate the entire case of the respondent/complainant as hereunder.
4. The appellants herein were arraigned as accused No.1 and 2 and the respondent herein was the complainant before the trial Court. The respondent/ complainant had filed a private complaint under Sec.200 of Cr.P.C., for offence punishable under Sec.138 of N.I.Act, alleging that the accused No.1 is the Gas Agency represented by its Proprietor Sunil, who is arraigned as accused No.2 had committed offence punishable under Sec.138 of N.I.Act. It is the case of the complainant that accused No.2 Sunil was the proprietor of Kali Indane Gas Agency situated at Haliyal, North Canara District and further, it has been averred that on 02.12.2007 the accused No.2 had entered into partnership agreement with complainant, agreeing that the complainant was entitled for 99.5% share of profit and the accused No.2 is entitled to 0.50% share of profit. The said Partnership Agreement was reduced into writing, wherein it was acknowledged that the 4 Crl.A.No.286/2024 accused No.2 had received a sum of Rs.37,00,000/- (Rupees Thirty Seven Lakhs only). The partnership was executed on 2.12.2007 and in furtherance of the same the complainant had paid aforesaid amount of Rs.37 lakhs. It is also been narrated that subsequently, the gas agency came to be terminated and the same was taken over by the Government of India and at that point of time, the complainant had demanded for his amount of Rs.37 lakhs together with reasonable rate of interest. As such, the accused No.2 had issued a cheque bearing No.260336 dated 25.02.2009 drawn on Corporation Bank, Haliyal Branch, in favour of complainant towards discharge of the aforesaid amount of Rs.37 lakhs and interest was calculated for Rs.3 lakhs and accordingly, the cheque for Rs.40 lakhs came to be issued by the accused No.2. It is also been narrated in the complaint that the cheque was presented to the bank during the period of its validity i.e., on 25.02.2009 through his Bank at Cauvery Kalpatharu Grameena Bank, Tiptur Branch, Tumkur District, which was sent to Corporation Bank on which the cheque was drawn and subsequently on 7.3.2009 the complainant had received intimation that the cheque came to be dishonored for the reason "Drawer's signature differs'. The impugned 5 Crl.A.No.286/2024 endorsement was communicated to the complainant on 20.03.2009. Thereafter, the complainant had got issued legal notice as contemplated under Sec.138 (b) of N.I.Act through RPAD and also by Certificate of Posting. The notice sent through certificate of posting was duly served upon the accused on 4.4.2009, whereas he had refused to receive the notice sent by RPAD and the same has been returned with endorsement "not claimed" on 16.4.2009. In spite of expiry of statutory period of 15 days, the accused had not come forward to make payment of the cheque amount and accordingly, complaint came to be lodged before the Jurisdictional Magistrate at Tiptur.
5. The learned JMFC Court, at Tiptur, upon looking in to the materials pleased to take cognizance for offence for the offences punishable under Sec.138 of N.I.Act and the case was posted for recording sworn statement of the complainant. After recording sworn statement of the complainant, the learned Magistrate had noticed existence of necessary materials to proceed against the accused person and accordingly, the case came to be registered as C.C. No.968/2009 on the file of Prl.Civil Judge and JMFC, Tiptur.
6 Crl.A.No.286/2024
6. Thereafter, learned Magistrate issued summons to the accused for the appearance of accused. Accused No.2 who is also the representative of Kali Indane Gas Agency - Accused No.1, had appeared before the trial court and pleaded not guilty and claimed to be tried. After recording the plea of the accused, the learned Magistrate had proceeded to record the evidence of the complainant. Accordingly, complainant T.M.Sundaresh examined himself as PW1 and got marked 14 documents as Ex.P.1 to Ex.P.14 on his behalf. The PW1 also cross-examined by the learned counsel for accused at length. Thereafter, the statement of accused came to be recorded as contemplated under Sec.313 of Cr.P.C., wherein the accused had denied all the incriminating materials appearing against him. The accused had not preferred to lead any defence evidence on his behalf. Subsequently, the case came to be posted for hearing arguments on merits. At that juncture, it was noticed that Special court was constituted for trial of criminal cases against elected and former MPs/MLAs in the State of Karnataka and since the accused being the MLA, the learned Magistrate at Tiptur, had passed necessary orders for submitting the file to the XLII ACMM Court, Bengaluru, which is a Special 7 Crl.A.No.286/2024 Court established for trial of cases filed against sitting as well as former MPs/MLAs for the offences triable by the Magistrate in the State of Karnataka. Once again the learned XLII ACMM Court at Bengaluru had re-registered the same as CC No.5808/2023 and had ordered for issue of notice to secure the accused No.1 and 2. It is relevant to note that at this juncture, the learned XLII ACMM, Bengaluru had noticed pendency of the application filed by the accused under Sec.45 of Indian Evidence Act seeking to refer the impugned cheque at Ex.P.1 to Hand-Writing Expert for obtaining his expert opinion. The learned trial court by assigning cogent reasons had rejected the application and thereafter, the arguments of both the parties were heard by the learned Magistrate. After hearing both the parties on merits the trial court was pleased to convict the accused for the aforesaid offences vide judgment dated 17.2.2024.
7. Being aggrieved by the same, the appellant has knocked the doors of this court contending that the impugned judgment and order of conviction passed by the trial court is not in accordance with law and the same requires interference of this court. The appellant has also contended that the impugned 8 Crl.A.No.286/2024 judgment was arbitrary and contrary to the facts and circumstances of the case. It is also been contended that the trial court had failed to appreciate that there were several discrepancies in the alleged agreement at Ex.P.5 and it was not corroborated with any document to indicate that the complainant had indeed made a payment of Rs.37 lakhs as claimed by him. It is also been submitted that no loan document has been produced in order to substantiate the contention of the complainant that he had borrowed amount from the bank to make advance of Rs.37 lakh. That apart, it is vehemently argued that there was no legally enforceable debt against the accused and the trial court has erroneously held that the transaction in dispute was not related to unregistered partnership agreement. It is also been argued at length that the endorsement issued by the Corporation Bank at Ex.P.2 would indicate that the cheque was dishonoured for the reason "signature differs". Under the circumstances, the substantial difference in the signature made on the cheque with that of the admitted signature of the accused was not taken into account by the learned Trial Court and it had in a mechanical manner had dismissed the application, which had caused severe hardship to the 9 Crl.A.No.286/2024 accused person. It has also been submitted that the trial court had failed to appreciate the fact that the alleged Partnership Deed at Ex.P.5 indicate of interpolations being made and in spite of the same it had proceeded to accept the same and though there was no legally enforceable debt, it had proceeded to invoke the provisions of Sec.138 of N.I. Act and had convicted the accused No.1 and 2.
8. During the course of arguments, the learned counsel for accused/appellants had taken this court in detail with respect to the contentions urged by him. It is his specific assertion that in order to attract the rigors of Sec.138 of N.I.Act, the basic ingredient is the existence of legally enforceable debt. However, in the instant case, no such materials were produced by the complainant to indicate of legally enforceable debt. It is vehemently argued that in a criminal case, the burden of proving a particular fact will be always on the complainant / prosecution and the defense of the accused would be only to the extent of rebutting the presumption. He has also argued that though the provision of Sec.118 and 139 of N.I.Act indicates of a presumption in favour of the complainant, the same can be pressed into service only when there is a legally enforceable debt. It is his submission that in the 10 Crl.A.No.286/2024 above case, there was no occasion for the accused to enter into such an agreement and also the court had failed to appreciate his cross-examination wherein it was suggested that the impugned cheque was misused by the complainant. Lastly, it has been submitted by the learned counsel that the when the cheque is dishonoured for the reason of 'signature differs', the provision of Sec.138 of N.I.Act will not be attracted. In order to buttress his submission, he has also filed written synopsis and relied upon the judgments of Hon'ble Apex Court as follows:
a) (2014) 12 SCC 539 (Indus Airways Private Limited and others Vs. Magnum Aviation Private Limited and another) In the aforesaid authority the Hon'ble Apex Court had specifically held that the existence of legally enforceable debt or other liability is essential condition for constitution of offence under Sec.138 of N.I.Act.
b) (2019) 5 SCC 418 (Basalingappa Vs. Mudibasappa) In the aforesaid judgment, it has been held by the Hon'ble Apex Court that the prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of any accused is "preponderance of probabilities".11 Crl.A.No.286/2024
It has also been further held in the said judgment that the complainant is required to establish his financial capacity and unless he has proved the same, the accused cannot be convicted for the offence under Sec.138 of N.I.Act.
c) 2024 SCC OnLine SC 518 (Rajco Steel Enterprises Vs. Kavita Saraff and Another) In this judgment also the same ratio has been laid down by the Hon'ble Apex Court.
9. By relying upon the aforesaid authorities, the learned counsel for appellants has sought for set aside the impugned judgment and order of conviction passed by the trial court and has requested the court to acquit the accused.
10. Per contra, on issuance of notice the respondent / complainant has appeared before this court through his counsel. It is the specific submission of the complainant that the impugned judgment and order passed by the trial court is apt and correct and has submitted that the documents which were produced by the complainant before the trial court at Ex.P.5 - Partnership Deed would indicate of an existence of a partnership between the complainant and accused. It is his submission that the accused 12 Crl.A.No.286/2024 himself has issued an endorsement by way of letter on 25.2.2009 wherein he has confirmed of receiving Rs.37 lakhs from the complainant and also entering of the Partnership Deed. It has been submitted that the document which he has produced from Indian Oil Corporation Limited ('IOCL' for short) dated 11.8.2010 which was obtained through RTI Act, would indicate the specific assertions by way of correspondences being made by the accused No.2 Mr.Sunil to the IOCL Authorities at an undisputed point of time of acknowledging the receipt of Rs.37 lakhs from accused No.2, which would clearly indicate of existence legally enforceable debt between the parties. It has also been argued that whenever a presumption is raised under Sec.118 and 139 of N.I.Act, the accused has to take appropriate defence to rebut the same. Mere denial of the assertions being made by the complainant would not be sufficient to hold that the accused had rebutted the presumption. It is also submitted that he had established the existence of legally enforceable debt and also the issuance of cheque and also its dishonor on its presentation and also serving of statutory bound notice. Unless the presumption is successfully rebutted by the Accused/ Appellant, the impugned judgment of the 13 Crl.A.No.286/2024 trial court was apt and correct. By pointing out the said aspects, he has sought for dismissing the appeal.
11. Heard and perused the materials on record and also the trial records which were secured, the points that would arise for my consideration is:
(1) Whether the trial court had erred in coming to conclusion that a legally enforceable debt was in existence between the complainant and accused persons?
(2) Whether the trial court has erred in coming to the conclusion that the complainant had established the commission of offence under Sec.138 of N.I.Act by accused?
3) Whether the trial court had erred in coming to the conclusion that the provisions of Sec.138 of N.I.Act would be attracted even when the cheque is dishonoured for the reason "signature differs"
4) Whether the impugned judgment and order of conviction is highly arbitrary, capricious and calls for interference by this court?
(5) What order?14 Crl.A.No.286/2024
12. My answer to the above points are as under:
Point No.1: In the Negative Point No.2: In the Negative Point No.3: In the Negative Point No.4: In the Negative Point No.5: As per final order for the following:-
REASONS
13. Point No.1 to 4:- Before adumbrating to the factual aspects of the case and also the contentions urged by the parties, the short facts in narrow compass is that the complainant had filed private complaint under Sec.200 of Cr.P.C., alleging that he had lent a sum of Rs.37 lakhs to the accused No.2 who was the Proprietor of accused No.1 Kaali Indane Gas Agency. It is pertinent to note that the complainant had lent the aforesaid amount under the partnership agreement dated 27.12.2007 and thereafter it was notarized and its execution was admitted before Notary on 4.5.2008. During the period of its validity, the cheque was presented to the bank, which was dishonoured for the reasons 'signature differs' and after completing the statutory bound obligations the complainant had filed necessary complaint before 15 Crl.A.No.286/2024 the trial court, on which the cognizance was taken and thereafter, the accused was summoned before the trial court.
14. As discussed above the evidence was recorded which had culminated in conviction of the present appellant/accused persons.
15. The court has also recapitulated the entire evidence which has been lead before the court by the parties. The complainant T.M.Sundaresh had got himself examined as PW1 by filing affidavit as contemplated under the provisions of N.I.Act and has reiterated the averments made in the complaint. He has also identified 14 documents which were marked as Ex.P.1 to P.14. He was subjected to grueling cross-examination by the learned counsel for accused. It was elicited from the complainant that a partnership agreement was executed on 02.12.2007 and he had paid the amount towards the same. During the course of cross examination it is submitted by the complainant that on 23.2.2007 he had made payment to the accused which he had borrowed from the Bank by availing loan. It is also suggested that apart from the impugned cheque, he was not having any other document. He has feigned his ignorance with respect to the advocate who had drafted 16 Crl.A.No.286/2024 the agreement and he has deposed that the agreement was prepared and executed in the presence of parents of accused No.2. He has further deposed that on 25.2.2009 he had received the cheque at the time of making the payment. It is also been suggested to him that after entering in to the management of the Gas Agency, in the year 2007, he was residing at Haliyal and he was also looking after the transactions of the Gas Agency and being the proprietor he was taking care of the filing indents, depositing amount in to bank and other banking transactions. However, he has denied the suggestion of misusing the cheque pertaining to accused person as he was taking care of the management of the gas agency. It was also suggested to the complainant that he had not lent any amount to the extent of Rs.37 lakhs and he was not having any other documents in order to justify the payment being made. He has also denied the suggestion of misusing the cheque belonging to the complainant and also it was suggested that entire complaint was filed at the behest of sitting MLA of Haliyal Sri R.V.Deshpande, as the accused had successfully contested against Sri R.V.Deshpande in General Elections.
17 Crl.A.No.286/2024
16. Subsequently, the witness was recalled and he has deposed of filing ITR for the last 18 years and deposed of mentioning of aforesaid transactions in his I.T.Returns. He has categorically admitted of investments made by accused No.2 to an extent of Rs.40-50 lakhs for obtaining the Gas Agency. It was also suggested that at the time of purchasing the Gas Agency, he was not aware of any quarrels that had taken place with respect to the agency. He has admitted of closing down gas agency in the year 2009. However, he has denied the suggestion of intentionally sending the notice to the address of the agency which was closed. It was also suggested to him that as he was the Manager of the agency, he had misused the cheque and he had presented the same. He has specifically feigned his ignorance about the person who had prepared the cheque had has deposed that he does not have any information with respect to the same. Apart from that nothing much has been elicited.
17. In the instant case, the main aspect which has been contended by the complainant is that he had entered into partnership agreement with accused No.2 who is also proprietor of accused No.1 Kali Indane Gas Agency. It is pertinent to note that 18 Crl.A.No.286/2024 the agreement came to be entered between the parties on 27.12.2007 which was executed before Notary Public on 4.5.2008. It is also pertinent to note that the complaint averments indicates that the accused No.2 had indeed intended to handover the Management and Administration of the Gas Agency to the complainant herein and subsequently the said partnership agreement proved to be futile as the IOCL Company had terminated the dealership accorded to accused No.2. In order to better appreciate the same, firstly the complainant is required to establish the following facts:
a. That there existed legally enforceable debt;
b. In furtherance of the same cheque or Negotiable Instrument came to be issued;
c. The instrument was presented to the Bank during the period of its validity;
d. The same came to be dishonoured for the reasons as mentioned in the provisions of Sec.138 of N.I.Act;
e. Necessary notice came to be issued as contemplated under the Act within 30 days from the date of receipt of dishonour intimation;19 Crl.A.No.286/2024
f. In spite of due service, the drawer of the cheque had not come forward to repay the amount.
18. Apart from the aforesaid aspects, it is also settled principle of law that when the complainant establishes that there existed a legally enforceable debt and towards discharge of the same a Negotiable Instrument was drawn, a presumption will not be drawn as contemplated under Sec.139 and 118(a) of the N.I.Act.
19. At this juncture, it is appropriate to look in to the contentions urged by the learned counsel for appellant in order to appreciate whether the complainant has established the aforesaid aspects before the trial court and also the grounds which have been urged by the Appellant in the present appeal. Firstly, it has been vehemently argued by the Appellant that there was no legally enforceable debt between the parties and hence the presumption is not available to the Complainant. In order to buttress his submission he has taken this court through the entire materials which were produced before the trial court. The entire genesis of the alleged transaction between the parties rests on entering of partnership agreement between the parties on the basis of the 20 Crl.A.No.286/2024 same, the complainant had invested amount in the Gas agency of Accused No.2. On perusal of the trial court materials, it indicates that Ex.P.5 is the Partnership Agreement allegedly entered between the parties. In the said partnership agreement, it has been specifically narrated that the accused No.2 was unable to carry-on with his business and had intended to induct the present complainant as his partner and as such it was stated that the accused No.2 will be having only a share of 0.50% in the profit and remaining 99.5% profit would be taken care by the complainant. It is relevant to note that the averments in the agreement indicate of complainant investing a sum of Rs.37 lakhs.
It has been vehemently canvassed that the agreement itself was not maintainable and even before the trial court, it has been argued at length as noticed from the records that the partnership agreement requires to be registered. The said aspect requires to be appreciated by looking in to the provisions of law as enshrined under Sec.25(3) of the Indian Contract Act. For the sake of convenience, the provision of Sec.25(3) of the Indian Contract Act is hereby extracted which reads as follows:-
"Section 25. Agreement without consideration, void, unless it is in writing and 21 Crl.A.No.286/2024 registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law.
An agreement made without consideration is void, unless (1) xxxxx (2) xxxxx (3) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits. In any of these cases, such an agreement is a contract."
20. The provision clearly indicates that any agreement entered between the parties without consideration would be considered as a void agreement unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law. On cursory reading of the said provision would indicate that any agreement without consideration have to be termed as a void agreement. However, at the same breath, the provision of the Indian Partnership Act does not contemplate of registering partnership firm. However, at the same time, the Indian Partnership Act, 1932 indicates that registration of a partnership firm is optional and not 22 Crl.A.No.286/2024 compulsory. At this juncture, when the said aspect is taken into account, it would indicate that the partnership firm is not registerable, the rights of the parties acting under the same will be diminished to certain extent when intend to sue one partner against another. The rights which can be enforced under the unregistered Partnership firm has been clearly laid down by the Hon'ble Apex Court in the judgment rendered in the case reported in (2009) 5 SCC 608 (V. Subramaniam v. Rajesh Raghuvandra Rao,) wherein it is held as:
10. The English law insofar as it makes registration compulsory for a firm and imposes a penalty for non-registration was not followed when the Partnership Act was made in India in 1932 as it was considered that this step would be too drastic and would introduce several difficulties. Hence registration was made optional at the discretion of the partners, but following the English precedent, any firm which was not registered by virtue of sub-
sections (1) and (2) of Section 69 disabled a partner or the firm (as the case may be) from enforcing certain claims against the firm or third parties (as the case may be) in a civil court. An exception to this disability with regard to an unregistered firm was made in sub-section (3)(a) to Section 69, and this clause enabled the partners in an unregistered firm to sue for the dissolution of the firm or for accounts or for realising the property of the dissolved firm. This exception in clause (a) of Section 69(3) was made on the 23 Crl.A.No.286/2024 principle that while registration of a firm is designed primarily to protect third parties, the absence of registration does not mean that the partners of an unregistered firm lose all rights in the said firm or its property and hence cannot sue for accounts or for its dissolution or for realising their property in the firm.
11. It may be mentioned that a partnership firm, unlike a company registered under the Companies Act, is not a distinct legal entity, and is only a compendium of its partners. Even the registration of a firm does not mean that it becomes a distinct legal entity like a company. Hence the partners of a firm are co-owners of the property of the firm, unlike shareholders in a company who are not co- owners of the property of the company.
23. The primary object of registration of a firm is protection of third parties who were subjected to hardship and difficulties in the matter of proving as to who were the partners. Under the earlier law, a third party obtaining a decree was often put to expenses and delay in proving that a particular person was a partner of that firm. The registration of a firm provides protection to the third parties against false denials of partnership and the evasion of liability. Once a firm is registered under the Act the statements recorded in the register regarding the constitution of the firm are conclusive proof of the fact contained therein as against the partner. A partner whose name appears on the register cannot deny that he is a partner except under the circumstances provided. Even then registration of a partnership firm is not made compulsory under the 24 Crl.A.No.286/2024 Act. A partnership firm can come into existence and function without being registered.
When the aforesaid judgment is carefully appreciated it is clearly held that the Partnership Firm is not a compulsorily registerable document and the Partnership firm can come into existence and function without being registered. The main reason for its registration is to enforce rights against third parties. Further it has been clarified in the impugned judgment that the partners of unregistered partnership firm can still sue for accounts of the firm, can seek for dissolution of the firm and also for realizing the property of the partnership Firm. In the instant case at the cost of repetition, it is pertinent to note that the complainant has contended that he had made an investment of Rs37,00,000/- in the firm and was entitled for profit of 99.05% and hence the same has to be construed as property of the firm. At this juncture, it would be appropriate to appreciate that whether the non-registration of the partnership firm would lead to drawn an inference that the alleged debt can be termed as legally enforceable debt. As per the tenor of the agreement at Ex.P.5, it indicates that the parties had agreed to share the profit at the ratio of 99.5%:0.5% i.e., 99.5% to 25 Crl.A.No.286/2024 complainant and 0.50% to accused No.2. If only the complainant had sued for recovery of profit, then the provision of Indian Partnership Act, 1932 would have squarely hit which would be impossible for the complainant to claim for the profit and also as per the Indian Contract Act, it would have indicated that the agreement between the parties was without any consideration or to put it in simple words the conditions would indicate of onerous one since the accused would only get 0.5% of the profit. However, it is not the case of the complainant or that of the accused No.2. In the above case, the court is required to consider whether the agreement which was prevailing between the parties and the amount described in the Negotiable Instrument at Ex.P.1 could be termed as legally enforceable debt.
21. Once again at the cost of repetition the provision of Sec.25 to 27 of the Indian Contract is required to be looked into, which clearly describes the legally enforceable debt. A legally enforceable debt is termed as the one which can be recovered in accordance with the provision of law. In this regard the court has relied upon the judgment of Hon'ble Apex Court in the judgment 26 Crl.A.No.286/2024 of K. Hymavathi vs The State Of Andhra Pradesh wherein it has been held as under:
"6. This is not a case where the cheque was drawn in respect of a debt or liability, which was completely barred from being enforced under law. If for example, the cheque was drawn in respect of a debt or liability payable under a wagering contract, it could have been said that that debt or liability is not legally enforceable as it is a claim, which is prohibited under law. This case is not a case of that type. But we are certain that 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."
10. From a perusal of the legal position enunciated, it is crystal clear that this Court keeping in perspective the nature of the proceedings arising under the NI Act and also keeping in view that the cheque itself is a promise to pay even if the debt is barred by time has in that circumstance kept in view the provision contained in Section 25(3) of the Contract Act and has indicated that if the question as to whether the debt or liability being barred by limitation was an issue to be considered in such proceedings, the same is to be decided based on the evidence to be adduced by the parties since the question of limitation is a mixed question of law and fact. It is only in cases wherein an amount which is out and out non-
recoverable, towards which a cheque is issued, dishonoured and for recovery of which a criminal action is initiated, the question of threshold jurisdiction will arise. In such cases, the Court exercising jurisdiction under Section 482 CrPC 27 Crl.A.No.286/2024 will be justified in interfering but not otherwise. In that light, this Court was of the view that entertaining a petition under Section 482 CrPC to quash the proceedings at the stage earlier to the evidence would not be justified."
22. In the aforesaid judgment Hon'ble Apex Court by looking in to the provision of Sec.25(3) of the Indian Contract Act, had held that the promise/agreement is valid and enforceable when it is not termed as wagering contract. In the case on hand the averments made in the agreement at Ex.P.5 does not indicate to be the one which could be termed as wagering. That apart, it is also pertinent to note that learned counsel for accused also submitted that the Partnership agreement cannot be termed as legally enforceable debt for the reason that the majority of the profit would be taken up by the complainant himself. It is also relevant to note that subsequently, after termination of the agency/ dealership by IOCL, a letter was executed by the accused No.2 in the letter head of the Gas Agency itself on 25.2.2009, which is also the date mentioned on the cheque, confirming that he had issued a cheque. That apart, he has also specifically narrated that the Gas Agency has been terminated and since the same is taken over by the Government of India, the complainant had insisted for return of 28 Crl.A.No.286/2024 Rs.37 lakhs together with interest and they had worked out the same and accordingly, he had issued cheque at Ex.P.1. The correspondence made by the Appellant/Accused was produced before the court and was marked as Ex.P.6. The said letter indicates the signature of accused No.2. At this juncture, the question of authenticity of the signature of accused No.2 is not discussed here, and the same will be discussed in the later part of the judgment. The said document is appreciated at this juncture itself to ascertain whether there exists a legally enforceable debt. Since it is the settled principle of law that when the complainant proves the existence of legally enforceable debt, a presumption under Sec.118 and 139 of N.I.Act will be available to him. By looking in to the contents and averments made in Ex.P.5 and also the letter which has been issued confirming the issuance of cheque by accused No.2, it would indicate that there existed a debt. Entirely the transaction is not based on the partnership agreement itself, since the partnership agreement was the first step wherein the complainant had made a payment of Rs.37 lakhs to accused No.2 to become partner of the accused No.1-Gas Agency dealership. Entering into an agreement with a person to become a 29 Crl.A.No.286/2024 dealer cannot be termed as illegal or wagering contract. No doubt the dealer Indian Oil Corporation might have imposed certain restrictions and conditions at the time of grant of dealership, since it was initially entered into between the Dealer and the accused No.2, wherein they had agreed not to induct any other person. It is also pertinent to note that another letter issued by the accused No.2 himself on IOCL on 29.7.2008 which was marked as Ex.P.14 and as per the said letter, the accused No.2 had explained in detail with respect of issuance of cheque and also inducting the complainant as one of the partner of the said dealership. It is relevant to note that he has specifically stated that an agreement was entered between the complainant and accused No.2 on 02.12.2007, since he was in dire need of financial assistance. It has been specifically stated that the agreement was entered with an understanding that he will be taken a partner in the Gas Agency subject to the approval of IOCL. He has also further clarified that he had addressed a letter to IOCL expressing his intention to induct the complainant as partner in to his business.
23. Inducting a person into his business cannot be termed as illegal one. He has also stated that it was only for mutual 30 Crl.A.No.286/2024 understanding and personal temporary adjustment between complainant and accused No.2 the agreement was entered upon. If the said contents of the letter are to be accepted and appreciated with the facts urged in the case, it would indicate that the Appellant/ Accused had candidly admitted of entering into an agreement. The Appellant cannot be permitted to blow hot and cold in one breath. That apart I have also carefully considered the cross examination of the complainant. During the course of cross examination, it is suggested that the complainant was looking after the management of the Gas agency by raising indent and also by looking into the banking transaction. The suggestion would clearly indicate that the Accused had categorically admitted of entering into an agreement and in the absence of the agreement the complainant could not have meddled with the affairs or the management of the Gas agency. With this factual back ground, now the question which is required to be appreciated is whether the presumption under Sec.139 and 118 of the Act would be attracted.
24. The other ingredient which is required to be established by the complainant to attract the presumption as 31 Crl.A.No.286/2024 mentioned above is the dishonour of cheque. This leads to a debatable point of law, wherein it has been argued at length by the learned counsel for appellant that the provision of Sec.138 of N.I.Act would not be attracted for the reason that the impugned cheque was dishonoured for the reasons 'drawer signature differs'. In order to buttress his submission, the learned counsel for appellant has relied upon the following authorities:-
a) (2002) 7 SCC 541 (Vinod Tanna Vs. Zaheer Siddiqui) In the aforesaid judgment the Hon'ble Apex Court had an occasion to consider whether the dishonour of the instrument for any other reason would attract the rigors of Sec.138 of N.I.Act.
In the aforesaid judgment, the proceedings came to be quashed.
b) The another judgment relied upon by the learned counsel for appellant, reported in (2012) 13 SCC 375 (Laxmi Dyechem Vs. State of Gujarat and others) wherein the same aspect has been held by the Hon'ble Apex Court.
25. On perusal of the judgment of the trial court, it indicates that the learned Trial Judge has appreciated the above said aspects and specifically discussed about the same by holding that the Hon'ble Apex Court in Laxmi Dyechem Case, it was 32 Crl.A.No.286/2024 rendered in the later point of time and specifically held that the earlier judgment passed in Vinod Tanna case was per in curium and the findings rendered in Laxmi Dyechem case required to be followed. I have bestowed my anxious reading to the contentions urged by the learned counsel for appellant. In the judgment of Hon'ble High Court of Karnataka reported in 2006(1)KarLJ332 (Dinesh Harakchand Sankla vs Kurlon Ltd. And Ors.). The same question was discussed in the said judgment and Hon'ble High Court of Karnataka has held as follows:
"8. Even when the cheque is dishonoured by the reason of "alteration in date and drawer's signature differs", the Court has to presume by virtue of Section 139 of the Negotiable Instruments Act that the cheques are received by the holder for the discharge, in whole or in part, of any debt or liability. Of course, this is a rebuttable presumption. The accused alone can show to the Court that the alterations in signature and date were not made because of insufficiency or paucity of funds. In this connection, a reference may be made to the judgment of the Apex Court in the case of M. M. T. C. Ltd. v. Medchi Chemicals and Pharma (P) Ltd. , wherein it is observed thus :
Para 18 : Just such a contention has been negatived by this Court has, in the case of Modi Cements Ltd. v. Kuchil Kumar Nandi . It has been held that even though the cheque is dishonoured by reason of 'stop payment' instruction, an offence under Section 138 could still be made out. It is held 33 Crl.A.No.286/2024 that presumption under Section 139 is attracted in such a case also. The authority shows that even when the cheque is dishonoured by reason of stop payment instructions, by virtue of Section 139 the Court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course that is a rebuttable presumption. The accused can thus show that the 'stop payment' instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there were sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop payment notice had been Issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then offence under Section 138 would not be made out. The important thing is that the burden of so proving would be on the accused. Thus Court cannot quash a complaint on this ground.
Thus, it is clear from the aforesaid observations made by the Apex Court that the accused can show that the alterations in dates or signatures are made not because of insufficiency or paucity of funds. If the accused shows that in his account there were sufficient funds to clear the amount of cheques at the time of presentation of cheques for encashment at the drawer's bank and that the cheques are returned for the valid cause, then the offence under Section 138 of the Act would not be made out. The important thing is that the burden of so proving would be on the accused. Thus, the Court cannot quash the complaint on this ground."34 Crl.A.No.286/2024
26. The Hon'ble High Court of Karnataka has specifically held that the accused alone can show to the Court that the alterations in signature and date were not made because of insufficiency or paucity of funds. If the accused shows that in his account there were sufficient funds to clear the amount of cheque at the time of presentation of the cheque, the same would be sufficient to hold that the provision of Sec.138 of N.I. Act would not be attracted. The said ratio which has been laid down by the Hon'ble High Court of Karnataka has to be kept in mind along with the rule laid down in Heydon's case, wherein liberal rule of interpretation and also the intention of legislature required to be taken into of account. In the instant case, the accused has vehemently argued that he had not at all issued cheque nor he has drawn cheque by affixing his signature and the same was forged by the complainant himself.
27. In order to look in to the said aspect, once again the cross-examination of the complainant is required to be looked into. During the course of cross-examination it has been elicited by the accused No.2 that complainant himself was acting as proprietor of the Gas Agency and also he was the one who was placing indent, 35 Crl.A.No.286/2024 depositing the amount, doing bank transactions, etc. the said suggestion has been admitted by the complainant. Once again at the cost of repetition, if the said suggestion is to be accepted, then it would indicate that the accused No.2 has indirectly and categorically admitted the transaction that had taken place between the parties and for same reason the entire issuance of cheque is based on the partnership agreement entered into between the complainant and accused No.2. When the accused himself suggested that the complainant was taking care of the entire transaction of the accused No.1 Gas Agency, then he will have to explain when and how the signed cheques were issued by Accused No.2 to run the Gas agency and also it is required for the Accused to explain at what interval he used to affix signature to signed blank cheques and the reasons for doing so. Absolutely no explanation has been given by the accused. The court is fully aware of the basic principles of criminal trial that always the burden of proof will be upon the prosecution. However in matters pertaining to Negotiable Instrument Act, it is settled principles of law that the accused has to rebut the presumption available under section 118 and Section 139 of the Act. In the instant case, the 36 Crl.A.No.286/2024 complainant has established the basic ingredients and hence the presumption is required to be rebutted by the accused. Time and again it has been held by the Hon'ble Apex court that the Accused need not have to enter into a witness box to rebut the presumption, but probable defence would be suffice to rebut the same.
28. Be that as it may, during the course of further cross- examination, a stray suggestion has been made that complainant had misused the cheque. Apart from the said stray suggestion, nothing has been discussed nor elicited from the complainant to indicate the misuse of the cheque. If for the sake of argument, cheque was misused by the complainant, nothing prevented accused No.2 from approaching the appropriate court of law at the earliest point of time or to initiate legal action against the complainant. It is also pertinent to note that during the course of cross-examination itself it was suggested that accused No.2 was the Member of Legislative Assembly and due to political rivalry he has been implicated in the above case. The said suggestion would indicate that accused No.2 is not a gullible person who is unaware of the due process of law. It is also relevant to note that the cheque came to be issued allegedly on 25.2.2007 and whereas the notice 37 Crl.A.No.286/2024 calling upon the accused to repay the cheque amount was issued on 31.3.2009 since cheque was dishonoured on 20.3.2009 and in spite of its due service, he has not uttered a single word about misusing of the cheque. In that event, the contentions which has been urged by the complainant is required to be accepted, it is also relevant to note that the accused has also taken up contention that the provision of Sec.138 of N.I.Act could not be attracted when the signature is differs. It is also been argued that the accused was not provided with ample opportunity to put forth his case to establish that he had not affixed his signature to the cheque. It is relevant to note that as per the order sheet of the trial court the learned Trial Judge on 7.7.2023 passed an order indicating that an application was filed under Sec.45 of the Indian Evidence Act requesting the court to send the impugned cheque to the hand-writing expert to ascertain the signature and a similar application was subsequently filed before the learned trial Judge itself and by clubbing both the applications, a reasoned order was passed by the learned Trial Judge by rejecting the said applications. The said order was not challenged and it had attained finality.
38 Crl.A.No.286/2024
29. I have also carefully looked in to the submissions made by the learned counsel for complainant with respect to non- providing of an opportunity to refer the cheque to hand-writing expert. In this regard, the court has relied upon the judgment of Hon'ble Apex Court in the case (2024) 4 SCC 453 (Ajitsinh Chehuji Rathod vs The State Of Gujarat) wherein it has been discussed as follows:
"14. Section 118 sub-clause (e) of the NI Act provides a clear presumption regarding indorsements made on the negotiable instrument being in order in which they appear thereupon. Thus, the presumption of the indorsements on the cheque being genuine operates in favour of the holder in due course of the cheque in question which would be the complainant herein. In case, the accused intends to rebut such presumption, he would be required to lead evidence to this effect.
15. Certified copy of a document issued by a Bank is itself admissible under the Bankers' Books Evidence Act, 1891 without any formal proof thereof. Hence, in an appropriate case, the certified copy of the specimen signature maintained by the Bank can be procured with a request to the Court to compare the same with the signature appearing on the cheque by exercising powers under Section 73 of the Indian Evidence Act, 1872.
16. Thus, we are of the view that if at all, the appellant was desirous of proving that the signatures as appearing on the cheque issued from his account were not genuine, then he could have procured a 39 Crl.A.No.286/2024 certified copy of his specimen signatures from the Bank and a request could have been made to summon the concerned Bank official in defence for giving evidence regarding the genuineness or otherwise of the signature on the cheque."
30. In the aforesaid judgment, Hon'ble Apex Court has succinctly discussed with respect to the defence taken by the accused about the invocation of Sec.138 of N.I.Act since the signature on the cheque differs. It has been held by the Hon'ble Apex Court that if the appellant/accused was desirous of proving that the signature appearing on the cheque were not genuine, he could have procured the specimen signature from the bank and a request might have been made to summon the concerned bank officials in defence for giving evidence regarding the genuineness or otherwise of the signature on the cheque. The factual aspects in that case are similar to the case on hand and even in the said case also, the accused had not availed any opportunity to summon any record from the bank or the documents to indicate that the impugned signature on the cheque are entirely different. It is also pertinent to note that the learned trial judge has specifically observed in the judgment that by invoking provision of Sec.73 of the N.I.Act the signature on the impugned cheque was compared 40 Crl.A.No.286/2024 with that of the other documents which were available before the court. It is also relevant to note that the observation has been made that the accused had affixed his signature in a different manner in vakalath and also in his statement recorded under Sec.313 of Cr.P.C. This particular observation would indicate that the accused would affix his signature in different manner at different point of time. As already discussed above, the question of attracting of Sec.138 of N.I.Act is established for the reason that the signature even though differs, would attract the rigors as per the judgment of Hon'ble High Court of Karnataka discussed supra.
31. With these factual aspects, when the entire materials are appreciated to ascertain whether the accused had successfully rebutted the presumption as contemplated under Sec.139 and 118 of the Act, reference is required to be made to the cross- examination. During the course of entire cross-examination it has been vehemently suggested that there was no legally enforceable debt and in another breath it was suggested that the complainant himself was taking care of the Gas agency by name Kali Indane Gas Agency and he was the one who was looking after the management and other transactions of the Gas Agency. If, for the 41 Crl.A.No.286/2024 sake of argument, the said aspect is accepted, then it would indicate that accused No.2 had a very minimum rule to be placed as he never participated in placing of indent, supply of gas cylinders or looking after the management of the gas Agency. Hence, the claim made by the complainant in the agreement indicates that it was a reasonable one. It is also pertinent to note that the said dealership was canceled for violating the terms and conditions which were entered between IOCL and accused No.2 and subsequently, the complainant's demand had resulted in drawing of cheque in his favour, which on its presentation was dishonoured. All the aforesaid aspects would indicate that the complainant had established a existence of a legally enforceable debt and also issuance of Negotiable Instrument which was dishonoured during the period if its validity.
32. The other ground which has been urged by the learned counsel for appellant was that the complainant had not established the fact that a cash transaction of Rs.37 lakh had taken place between them. It is his contention that when the complainant during the course of cross-examination has stated to have availed loan, he has not produced any materials in this regard. In his 42 Crl.A.No.286/2024 written synopsis, he has specifically contended that in the absence of proof of money available with the complainant, the transaction cannot be termed as legally enforceable debt. In this regard, the court has relied upon the judgment of Hon'ble Apex Court reported in (2022) 6 SCC 735 (Tedhi Singh v. Narayan Dass Mahant) wherein it has been held as under:
8. It is true that this is a case under Section 138 of the Negotiable Instruments Act. Section 139 of the NI Act provides that court shall presume that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. This presumption, however, is expressly made subject to the position being proved to the contrary. In other words, it is open to the accused to establish that there is no consideration received. It is in the context of this provision that the theory of "probable defence" has grown. In an earlier judgment, in fact, which has also been adverted to in Basalingappa [Basalingappa v. Mudibasappa, (2019) 5 SCC 418 :
(2019) 2 SCC (Cri) 571] , this Court notes that Section 139 of the NI Act is an example of reverse onus (see Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] ). It is also true that this Court has found that the accused is not expected to discharge an unduly high standard of proof. It is accordingly that the principle has developed that all which the accused needs to establish is a probable defence. As to whether a probable defence has been established is a matter to be decided on the facts of 43 Crl.A.No.286/2024 each case on the conspectus of evidence and circumstances that exist.
10. The trial court and the first appellate court have noted that in the case under Section 138 of the NI Act the complainant need not show in the first instance that he had the capacity. The proceedings under Section 138 of the NI Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent, the courts in our view were right in holding on those lines. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross- examination of the witnesses of the complainant. Ultimately, it becomes the duty of the courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence.
33. In the aforesaid judgment, Hon'ble Apex Court has clearly held that when the accused himself admits of receiving the 44 Crl.A.No.286/2024 amount and issuance of negotiable instrument towards discharge of the debt, the complainant need not have to prove that he had sufficient source of income. Once again at the cost of repetition, if for the moment, the document at Ex.P.6 which is letter of undertaking given by the accused No.2 is to be appreciated, it would clearly indicate that he had acknowledged receipt of Rs.37 lakhs from complainant. That apart the suggestion which were made during the course of cross-examination by the complainant would indicate that he had categorically admitted the complainant to meddle with the affairs of the accused No.1 Kaali Indane Gse Agency. For the sake of argument, if the complainant had not entered into any partnership agreement with the accused No.2, then on what premise the complainant was permitted to place indent, supply gas cylinders to the customers and also do bank account transactions. The said suggestions were put forth by the accused himself during the course of his cross-examination. Time and again, the Hon'ble Apex Court has specifically held that defences which have been urged during the course of cross- examination can be appreciated by the Court. The inconsistent stand which was taken by Appellant/ Accused should not be of self 45 Crl.A.No.286/2024 destructive one. In this regard the court has relied upon the judgment of the Hon'ble Apex court reported in 2023 SCC Online SC 355 ( Balu Sudam Khalade V State of Maharastra) wherein it is held as:
40. It is a cardinal principle of criminal jurisprudence that the initial burden to establish the case against the accused beyond reasonable doubt rests on the prosecution. It is also an elementary principle of law that the prosecution has to prove its case on its own legs and cannot derive advantage or benefit from the weakness of the defence. We are not suggesting for a moment that if prosecution is unable to prove its case on its own legs then the Court can still convict an accused on the strength of the evidence in the form of reply to the suggestions made by the defence counsel to a witness. Take for instance, in the present case we have reached to the conclusion that the evidence of the three eyewitnesses inspires confidence and there is nothing in their evidence on the basis of which it could be said that they are unreliable witnesses. Having reached to such a conclusion, in our opinion, to fortify our view we can definitely look into the suggestions made by the defence counsel to the eyewitnesses, the reply to those establishing the presence of the accused persons as well as the eyewitnesses in the night hours. To put it in other words, suggestions by itself are not sufficient to hold the accused guilty if they are incriminating in any manner or are in the form of admission in the absence of any other reliable evidence on record. It is true that a suggestion has no evidentiary value but this proposition of law would not hold good at all times and in a given case during the course of cross-46 Crl.A.No.286/2024
examination the defence counsel may put such a suggestion the answer to which may directly go against the accused and this is exactly what has happened in the present case.
41. The principle of law that in a criminal case, a lawyer has no implied authority to make admissions against his client during the progress of the trial would hold good only in cases where dispensation of proof by the prosecution is not permissible in law. For example, it is obligatory on the part of the prosecution to prove the post mortem report by examining the doctor. The accused cannot admit the contents of the post mortem report thereby absolving the prosecution from its duty to prove the contents of the same in accordance with law by examining the doctor. This is so because if the evidence per se is inadmissible in law then a defence counsel has no authority to make it admissible with his consent.
42. Therefore, we are of the opinion that suggestions made to the witness by the defence counsel and the reply to such suggestions would definitely form part of the evidence and can be relied upon by the Court along with other evidence on record to determine the guilt of the accused.
43. The main object of cross-examination is to find out the truth on record and to help the Court in knowing the truth of the case. It is a matter of common experience that many a times the defence lawyers themselves get the discrepancies clarified arising during the cross-examination in one paragraph and getting themselves contradicted in the other paragraph. The line of cross-examination is always on the basis of the defence which the counsel would keep in mind to defend the accused. At this stage, we may quote with profit the observations made by a Division Bench of the Madhya Pradesh High Court in the case of Govind s/o Soneram v.
47 Crl.A.No.286/2024State of M.P. reported in 2005 Cri LJ 1244. The Bench observed in paragraph 27 as under:
"27. The main object of cross-examination is to find out the truth and detection of falsehood in human testimony. It is designed either to destroy or weaken the force of evidence a witness has already given in person or elicit something in favour of the party which he has not stated or to discredit him by showing from his past history and present demeanour that he is unworthy of credit. It should be remembered that cross-examination is a duty, a lawyer owes to his clients and is not a matter of great personal glory and fame. It should always be remembered that justice must not be defeated by improper cross-examination. A lawyer owes a duty to himself that it is the most difficult art. However, he may fail in the result but fairness is one of the great elements of advocacy. Talents and genius are not aimed at self-glorification but it should be to establish truth, to detect falsehood, to uphold right and just and to expose wrongdoings of a dishonest witness. It is the most efficacious test to discover the truth. Cross-examination exposes bias, detects falsehood and shows mental and moral condition of the witnesses and whether a witness is actuated by proper motive or whether he is actuated by enmity towards his adversaries. Cross-examination is commonly esteemed the severest test of an advocate's skill and perhaps it demands beyond any other of his duties exercise of his ingenuity. There is a great difficulty in conducting cross-examination with creditable skill. It is undoubtedly a great intellectual effort. Sometimes cross-examination assumes unnecessary length, the Court has power to control the cross-examination in such cases. (See Wrottescey on cross-examination of witnesses). The Court must also ensure that cross-examination is not made a 48 Crl.A.No.286/2024 means of harassment or causing humiliation to the victim of crime [See State of Punjab v. Gurmit Singh, 1996 SCC (Cri) 316]."
44. During the course of cross-examination with a view to discredit the witness or to establish the defence on preponderance of probabilities suggestions are hurled on the witness but if such suggestions, the answer to those incriminate the accused in any manner then the same would definitely be binding and could be taken into consideration along with other evidence on record in support of the same.
34. By looking in to the facts and circumstances of the case, it clearly indicates that the complainant has established that there existed a legally enforceable debt prevailing between the parties and towards discharge of the same, a Negotiable Instrument came to be issued.
35. The last leg of argument which has been canvassed by the learned counsel for appellant is that there was no due service of notice to the accused. In order to substantiate his contention he has requested this court to look in to the return of undelivered postal cover which is marked as Ex.P.10 and EX.P.11. The undelivered RLAD postal covers have been returned with an endorsement as 'not claimed'. It is his submission that unless the notice is duly 49 Crl.A.No.286/2024 served, the provision under Sec.138 of N.I.Act would not be pressed into. In this regard, the court has relied upon the judgment of Hon'ble Apex Court reported in (2006) 6 SCC 456 ( D.Vinod Shivappa V Nanda Belliappa) case wherein it is held as:
15. 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 prove at the trial by evidence that the endorsement is not correct and that the addressee, namely, the drawer of the cheque, with knowledge of the notice had deliberately avoided to receive notice. Therefore, it would be premature at the stage of issuance of process, to move the High Court for quashing of the proceeding under Section 482 of the Code of Criminal Procedure. The question as to whether the service of notice has been fraudulently refused by unscrupulous means is a question of fact to be decided on the basis of evidence. In such a case 50 Crl.A.No.286/2024 the High Court ought not to exercise its jurisdiction under Section 482 of the Code of Criminal Procedure.
18. This Court noticed the position well settled in law that the notice refused to be accepted by the drawer can be presumed to have been served on him. In that case the notice was returned as "unclaimed" and not as refused. The Court posed the question, "Will there be any significant difference between the two so far as the presumption of service is concerned?" Their Lordships referred to Section 27 of the General Clauses Act and observed that the principle incorporated therein could profitably be imported in a case where the sender had dispatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee, unless he proves that it was not really served and that he was not responsible for such non-service. This Court dismissed the appeal preferred by the drawer holding that where the notice is returned by the addressee as unclaimed such date of return to the sender would be the commencing date in reckoning the period of 15 days contemplated in clause (c) of the proviso to Section 138 of the Act. This would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to his address. Since the appellant did not attempt to discharge the burden to rebut the aforesaid presumption, the appeal was dismissed by this Court. The aforesaid decision is significant for two reasons. Firstly, it was held that the principle incorporated in Section 27 of the General Clauses Act would apply in a case where the sender dispatched the notice by post with the correct address written on it, but that would be without prejudice to the right of the drawer of the cheque to 51 Crl.A.No.286/2024 show that he had no knowledge that the notice was brought to his address.
36. In the aforesaid judgment, Hon'ble Apex Court has clearly held that at the behest of an unscrupulous person may try to avoid service of notice for some or the other reason. In the instant case, the notice was also served upon the accused through Certificate of Posting for which acknowledgment has been produced as per Ex.P.8 and 9. That apart, as per the judgment of the Hon'ble Apex Court, the accused should have substantiated his contention before the court and should have produced materials to indicate that he was not served with any notice. Unless the same is established, a mere stray suggestion of non-service of notice would not be sufficient to hold that the notice was not duly served upon. By looking in to the facts and circumstances of the case, the complainant has clearly established his case under Sec.138 of N.I.Act. The learned Trial Court on careful appreciation of materials has discussed in detail about the provision of law and also the fact of difference in signature found in the negotiable instrument and by considering all these aspects the impugned judgment and order of conviction passed by the trial court, is apt and correct and the same does not calls for interference and 52 Crl.A.No.286/2024 accordingly, the points for consideration raised as point No.1 to 4 are answered in the Negative.
37. Point No.5: In view of my findings on points No.1 to 4, I proceed to pass the following:
ORDER The Criminal Appeal filed by the appellant/accused under Sec.374(3) of Cr.P.C., is hereby dismissed.
Consequently, the judgment and order of conviction passed by the XLII Addl. Chief Metropolitan Magistrate, Bengaluru in CC No.5808/2024 (Old CC No.968/2009) dated 17.01.2024 for the offence punishable under Sec.138 of the Negotiable Instruments Act is hereby confirmed.
Send the copy of the Judgment to learned Magistrate along with TCR forthwith.
(Dictated to the Stenographer Grade-I in open Court, transcribed and typed by him, revised and corrected by me and then pronounced in the Open Court on this the 28th day of May, 2024) (Santhosh Gajanan Bhat) LXXXI Addl. City Civil & Sessions Judge, Bengaluru City (CCH-82) (Special Court exclusively to deal with criminal cases related to former and elected MPs/MLAs in the State of Karnataka)