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IN THE HIGH COURT OF KARNATAKA, BANGALORE

DATED THIS THE 13TH DAY OF AUGUST, 2014

BEFORE

THE HON’BLE MR.JUSTICE C R KUMARASWAMY

CRIMINAL APPEAL NO.14 OF 2010

BETWEEN:

M/S CAR QUEEN NO.39, SWASTHI ROAD 2ND CROSS, SHANTHINAGAR BANGALORE-560027 REPRESENTED BY ITS PROPRIETOR MR.RITESH RIDHKARAN CHORARIA …APPELLANT (BY SRI.A.S.GUPTA, ADVOCATE) AND:

MR.M.MANJUNATH S/O M.MUNIYAPPA R/O NO.116, 2EC 2ND CROSS, NEAR ST.VINCENT POLLOTI CHURCH OMBR LAYOUT BANASWADI MAIN ROAD BANGALORE-560043 ... RESPONDENT (BY SRIYUTHS.SRINIVASA AND RAGHAVENDRA.S -ADVOCATES)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) CR.P.C BY THE ADVOCATE FOR THE APPELLANT PRAYING THAT THIS HON’BLE COURT MAY BE PLEASED TO SET ASIDE THE

COMMON JUDGMENT OF ACQUITTAL PASSED BY THE ADDITIONAL SESSIONS JUDGE AND PRESIDING OFFICER, FAST TRACK COURT-III, MAYO HALL UNIT, BANGALORE IN CRL.A.NO.25034/2008 AND TO RESTORE THE ORDER OF THE XXV ACMM, BANGALORE CITY IN C.C.NO.10325/2005 DATED:29.03.2008.

THIS CRIMINAL APPEAL COMING ON FOR FINAL

HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:

J U D G M E N T

This criminal appeal is filed under Section

378(4) of Cr.P.C by the advocate for the appellant

praying that this Hon’ble Court may be pleased to set

aside the common judgment of acquittal passed by

the Additional Sessions Judge and Presiding Officer,

Fast Track Court-III, Mayo Hall Unit, Bangalore in

Crl.A.No.25034/2008 and to restore the order of the

XXV ACMM, Bangalore City in C.C.No.10325/2005

dated:29.03.2008.

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2. I have heard the learned counsel for the

appellant as well as learned counsel for the

respondent. Records were also called for and I have

perused the same.

3. The averments made in the complaint is

as under:

The complainant is a businessman. He is

dealing with the automobile accessories. Accused is

also a businessman. He has purchased goods from

the complainant on credit basis. To discharge the

loan liability in part, the accused issued a cheque

bearing No.049940 dated 28.07.2004 for a sum of

Rs.5,00,000/- drawn on Indian Overseas Bank,

HRBR Layout Brach, No.3, IX-B Main Road,

Banasawadi Main Road, Bangalore, in favour the of

the complainant. The said cheque was presented by

the complainant to his bank for collection on

25.11.2004. The same was returned by the accused’s

banker with a shara “Insufficient Funds”.

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A legal notice dated 29.11.2004 was issued to

accused demanding the amount mentioned in the

dishonored cheque i.e., Rs.5,00,000/-.

The legal notice was sent to the accused to two

addresses. The accused acknowledged the registered

notice of one address. The other notice returned as

“not claimed”.

The accused did not send reply to the notice. He

has not complied with the demand for payment of a

sum of Rs.5,00,000/-. The accused is liable to pay a

sum of Rs.5,00,000/-. The consideration amount was

Rs.5,08,008/- and to discharge his liability in part,

the accused issued a cheque for Rs.5,00,000/-. The

accused is liable to pay interest at 24% per annum

with quarterly rest as agreed by him.

The accused sent Notice on 29.11.2004. As per

acknowledgement, the accused has received the

notice on 03.12.2004. Therefore, the cause of action

arose firstly on 25.11.2004 when the cheque was

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presented, secondly on 29.11.2004 when the legal

notice was sent, thirdly on 03.12.2004 when the

accused received the legal notice and the same was

subsisting.

The complaint filed is in time. The entire

transaction is carried out at No.39, Swasthi Road, 2nd

Cross, Shanthinagar, Bangalore-560027. The

accused has committed an offence under Section 138

of Negotiable Instruments Act.

4. In the trial Court, sworn statement of the

complainant was recorded. The accused pleaded

guilty and claimed to be tried.

5. In the trial Court, PW1 was examined on

behalf of the complainant and Exs.P1 to P6A were got

marked. DW1 was examined and no documents were

marked on behalf of the accused.

Evidence of PW.1 is filed by way of affidavit.

His evidence is in the same line as that of the

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complaint. During his cross-examination, he states

that he knew the accused. The accused was

introduced through one Syed, Sales Executive of

Manipal Motors. One Diwakar - driver, accused and

another person whose name is not known to him had

approached him. Accessories were fixed to three cars

– Cilo, TATA Safari and Honda City brought by the

accused. He has not given any quotation before

fixing the accessories. They were affording the credit

facility to known people. Credit facility was extended

by receiving post-dated cheques. Accused alone was

present and issued the cheque. He has mentioned

the value of the goods in the complaint, but not in the

notice. He has not mentioned the vehicle number in

the invoice. He has sent the legal notice to two

addresses of the accused. He has produced the

postal receipts. He has not sent the legal notice

under certificate of posting. He has produced the

postal acknowledgement for having duly served the

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notice on the accused. He admits that the address of

the accused is different in the complaint to that of the

notice. He admits that he has received Rs.1,20,000/-

before the court from the accused. He denies the

suggestion that accused is liable to pay only

Rs.30,000/-. There is no impediment for him to

produce the monthly and annual statement together

with the valuation statement and Form-3. The

amount mentioned in EX.P3 is not the amount under

the cheque. He volunteers that the discount was

extended to the accused. He admits that the address

mentioned in EX.P3 is not the address shown in the

cause title of the complaint. He volunteers to depose

that the residential address is described in the

complaint as the office of the accused was closed

from the date of issuance of cheque. Every week,

they were approaching the accused for collection. He

approached the accused at his home and demanded

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to pay the dues, after one or two weeks’ of issuance of

cheque.

The accused has filed his evidence by way of

affidavit and states that he do not know the

complainant. There is no transaction of whatsoever

nature taken place between him and the

complainant. He came to know about the

complainant only when he received summons

through police at his residence and on enquiry, he

came to know that one Mr.Diwakar had given a blank

cheque belonging to him during the month of March

2003 to the complainant to secure a sum of

Rs.1,50,000/- towards purchase of car security

system, music system and its accessories etc. from

the complainant’s company. Diwakar also intimated

him that during May 2003 that he has paid

Rs.50,000/- in cash to the complainant and the

complainant promised to return the cheque which

was issued by way of security on payment of the

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balance amount. Diwakar further intimated him that

subsequent to purchase of items from the

complainant, he came to know that they were of

inferior quality and in that regard, he had a clash

with the complainant. The complainant has agreed

to receive a sum of Rs.1,50,000/- as full and final

settlement in addition to the said Rs.50,000/- paid

by Diwakar. He further deposed that though the said

Diwakar paid a sum of Rs.1,20,000/- to the

complainant during the pendency of the above case,

and the complainant had assured to withdraw the

case, but however, the complainant after receipt of

Rs.1,20,000/- instead of returning the cheque, to his

utter shock, started demanding more money for the

best reasons known to him. He refused to pay the

same to the complainant. He further states that

there is no transaction as alleged by the complainant.

The complainant has not approached the Court with

clean hands. He has created invoice for the purpose

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of this case. He has never delegated any authority to

sign on his behalf to anybody and he has never

authorized the said Diwakar to sign any of such

original invoice produced and relied upon by the

complainant. As per his knowledge the signature on

the invoice does not belong to Diwakar and it is

created by the complainant. He further states that he

do not have any office at the address mentioned by

the complainant in the legal notice. The address

mentioned in the invoice also does not belong to him.

His office address is No.9, Sri Lakshmi

Venkateshwara Complex, Banasawadi Outer Ring

Road, Bangalore – 40. He states that the

complainant did not issue any notice to his

residential address nor to his office address. Hence

the notice issued by the complainant is not legal and

has deprived him of an opportunity to reply.

He further states that the complainant with

dishonest intention and to cause wrongful loss to

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him, has chosen to misuse the blank cheque issued

towards security by filling up the contents of the

cheque. There is no authority or permission that is

being obtained either directly or indirectly by the

complainant before filling the contents of the blank

cheque from him. He has not executed the subject

cheque towards any transaction. This witness was

cross examined by the complainant’s counsel. He

states that in the year 2003, he has given a blank

cheque to Diwakar for security purpose. EX.P1 does

not disclose the name of Diwakar. Diwakar told that

some accessories were purchased. As he had no

account, DW.1 had given the cheque in his favour.

He has not given any reply to the notice as he has not

received any notice. He denies the suggestion put to

him that notice was served to the address shown in

EX.P5. The address described in EX.P5 is not correct.

But his residential address is No.116, 2 EC, 2nd

cross, Near St. Vincent Polloti Church, (1) MBR

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Layout, Banasavadi Main Road, Bangalore. He was

working as a field worker. He does not know whether

Diwakar owns a car or not. He made payment before

court. As per the order of this Court and vide letter

dated 21.03.2013, examination-in-chief of Manjunath

was recorded. He has deposed that he has no

relation with this case. Brother of Diwakar has taken

spare parts worth Rs.1,50,000/-. Diwakar has paid

Rs.50,000/- through cash and he did not have a

bank account. For the purpose of security, the

complainant gave cheque. EX.P1 is the cheque. He

admits his signature on the cheque. But the writing

made on the cheque is not his hand writing. There is

variation in the writing and even the ink differs. After

receiving the summons he enquired Diwakar. He told

him that Rs.1,50,000/- worth goods were purchased;

Rs.50,000/- was paid by way of cash. The complaint

was registered for recovery of Rs.5,00,000/-.

Complainant and Diwakar deliberated for settlement.

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Complainant agreed for receiving Rs.2,00,000/-.

Already Rs.50,000/- was paid. D.W.1 has received

Rs.1,30,000/- from Diwakar and the same amount

was deposited in the court. Rest of the amount was

not received by the complainant as the cheque

amount was Rs.5,00,000/-. He has parted the

cheque to Diwakar in the year 2003. EX.P3 is

invoice. In this invoice, his signature is not there. He

does not know as to who has signed the invoice.

EX.P3 - invoice is original one. Complainant has

created this document by mentioning his office

address, vehicle number, KST – CST number, post

dated cheque number and date. On noticing this, he

stated that the invoice was created for the purpose of

this case. The address mentioned in EX.P5 is not his

address. His correct address is No.9, Sri

Lakshmivenkateshwara Complex, Old Madras Ring

Road, Bangalore – 43. Ex.P5 was not sent to his

residence address. He does not know Syed. He states

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that Diwakar is a physically handicapped person.

During his cross examination he states that he has

failed in S.S.L.C. examination. His father was a

Police Sub Inspector. For the past one year, he is

working in Wipro Diagnosis Company as a Manager.

Earlier to that, he was a real estate agent. He had

employed three persons for his work, namely Raghu,

Seenu and Diwakar. Raghu was maintaining the

office, Seenu was working as receptionist and

Diwakar was working as Field Assistant. He was

paying salary of Rs.3,500/- to Diwakar, Rs.2,000/- to

Seenu and Rs.1,500/- to Raghu. He used to receive

brokerage commission for sale of the immovable

properties. For the past two years, Diwakar was

working with him. Diwakar approached him directly

seeking for employment. Accordingly, he appointed

him. He denies the suggestion put to him that

Diwakar purchased car security system, music

system and other spare parts. By way of security, the

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cheque in question was given. After giving the

cheque, Diwakar told him that he has given a blank

cheque. He denies the suggestion put to him that

blank cheque was given to Diwakar. The signed

blank cheque was kept in the office for the use of

financial transaction and the said cheque was

misused. He has signed the blank cheque for the

purpose of paying electrical bill, phone bill, etc.,

Diwakar has admitted that he has parted the cheque

and he also told him that he will make settlement for

a sum of Rs.2,00,000/- and by that time, Diwakar

had left the job. He has not initiated any legal action

against Diwakar for recovery of Rs.5,00,000/-. He

denies the suggestion put him that all these

transactions took place in the year 2004. EX.P.6(a)

is notice. In that notice address mentioned is not his

address. He has no enmity with the Postman. The

address mentioned in Ex.P5 i.e. No.116 is his

address. The name Manjunath mentioned in Ex.P7 is

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his name. Ex.P1 - cheque is dated 29.07.2004. He

has not registered his real estate business. He has

PAN number. He has not mentioned the loss in his

income tax returns.

DW.2 is the field supervisor working under the

accused. He is not a driver. He is a handicapped

person. He knew the plaintiffs’ company. His

brother owns a Maruthi Van. He frequently visited

the complainant’s firm for installing some of the

accessories to Maruthi Van and purchased

accessories worth Rs.1,50,000/- in the year 2003.

Out of the total amount, he has paid cash of

Rs.50,000/- and assured to pay the remaining dues

of Rs.1,00,000/- in part payments. At that time,

PW.1 has requested to draw cheque in his favour.

DW.2 was not holding any account. Ex.P.1-cheque

was blank when it was issued by the accused to him.

He does not know, who has written the contents of

EX.P1. Thereafter, he found some defects in the

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accessories. He has returned the accessories to PW.1

and at that time, he requested to return the said

cheque and the same was not returned. He was told

by PW.1 that it was torn. He has not attested the

signature on Ex.P3 - invoice. Thereafter, he came to

know that a case was lodged against accused. On his

approach, the matter was conciliated and it was

settled for Rs.2,00,000/-. Out of which, he had

already made payment of Rs.50,000/- and he agreed

to pay the remaining balance of Rs.1,50,000/-. Out

of it, he has paid Rs.1,20,000/- to the accused and

he has to pay Rs.30,000/-. It was assured that the

complaint filed against the accused will be

withdrawn, but the complainant has not done so.

During his cross-examination, he states that he

has worked under the accused for one year. His

salary was Rs.3,500/-. He admits that the

accessories were installed to his brother’s car. Only

out of friendship, the accused stood as surety. His

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brother is no way connected to PW.1. There are no

documents to show the installation of accessories to

the Maruthi Van.

6. The finding of the trial Court is as under:

“Upon oral statement of PW1, the

complainant has produced Ex.P1 and Ex.P3.

The accused admits that Ex.P1 belongs to

his account and Ex.P1(a) is his signature. He

tried to rebut the case of the complainant

contending that the amount mentioned in

the cheque is not the amount mentioned in

Ex.P3-Invoice and the address is also

incomplete. It is elicited from the mouth of

PW1 that discount was extended to the

accused. Further he also admits that

extension of discount was not mentioned in

Ex.P3. In the affidavit, it was stated that the

cheque was given towards part payment of

the accessories purchased by Diwakar.

There is a contradictory statement. He

contends that he has not executed the

cheque for the amount as mentioned in

Ex.P1. During the pendency of the

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proceedings, a memo was filed by the

complainant on 04.04.2007 stating that the

accused has undertaken to pay a total sum

of Rs.5,00,000/- in installments of

Rs.50,000/- each and it was accepted by the

complainant. The complainant has also

received a sum of Rs.50,000/- on

04.04.2007, Rs.20,000/- on 14.06.2007,

Rs.30,000/- on 16.07.2007 and Rs.20,000/-

on 22.08.2007. In all, the complainant has

received a sum of Rs.1,20,000/- from the

accused and it was duly acknowledged by

the complainant as per the order sheet.

When both the parties were supposed to file

joint memo, the accused has contested the

case and examination-in-chief of the

complainant was completed before filing the

memo on 26.03.2007. For the reasons best

known to the parties, the matter was

contested. Filing of the memo by the

complainant is not in dispute. But he only

contends that the matter was conciliated

between the complainant and employee of

the accused by name Diwakar. On behalf of

Diwakar-DW2, he has made part payment of

Rs.1,20,000/- towards final settlement of

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Rs.1,50,000/-. Hence, Diwakar is liable to

pay a sum of Rs.30,000/-. When conciliation

transpired between them, nothing prevented

them to file an affidavit to that effect during

the course of proceedings. But no steps have

been taken by the accused. Thus, the order

sheet so also memo of the parties holds good

to draw an inference that there was a legally

enforceable debt as it is evident that he has

purchased the accessories to his car on

credit basis as per Ex.P3 and he has issued

a cheque as per Ex.P1 for discharge of his

liability.

The learned Magistrate at para-21 of the

judgment has observed that the accused

cannot say that he has not entered into any

such terms of compromise with the

complainant. He is totally estopped from

taking any other defence. In the eye of law,

as contemplated under Sections 17 to 20 of

Indian Evidence Act, admission is a

statement, oral or documentary which

suggests any inference as to any fact in issue

or relevant fact which is made by any of the

persons. Under the circumstances, it

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amounts to an admission. The principle is

based on law of estoppel that one cannot be

allowed to play hot and cold simultaneously.

In view of this clear admission, on record, as

per the order sheet, it is evident that the

accused has issued cheque as per Ex.P1

towards discharge of liability. It appears, for

the defence sake, he has taken some fishy

defence.

The learned Magistrate at para-23 of the

judgment has observed that it is argued by

the accused that Ex.P1 is materially altered

as the writings are in different ink. There is a

clear admission of his liability. He cannot go

back to say that Ex.P1 is materially altered.

It is his specific case that he has issued

blank cheque to Diwakar as Security. The

blank and post-dated cheque substantiate

the fact to draw a presumption as

contemplated under Section 139 of the

Negotiable Instruments Act.

The learned Magistrate at para-25 of the

judgment has observed that upon oral

evidence of PW1, he has produced the legal

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notice said to have been issued to the

accused on 29.11.2004 as per Ex.P5. The

said notice was sent by RPAD to two

addresses of the accused. The accused

acknowledged the registered notice at one

address and other one was returned as ‘not

claimed’ as per shara in Ex.P6. The learned

counsel for the accused has argued that the

complainant has not produced any proof to

prove that the accused has acknowledged

the registered notice sent to the address

mentioned in the original notice marked as

Ex.P6(a). The address of the complaint is

different to that of address mentioned in

notice. It is also admitted by him that he has

given instructions to his advocate. Thus, the

accused contends that the complainant has

not examined the Postman as a witness.

The learned Magistrate at para-26 of the

judgment has observed that no doubt, it is

clear that the address that has been

mentioned in the complaint is not the

address that has been shown in Exs.P5 and

P6(a). There is no specific rule that whatever

the address that has been found in the

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notice must tally with the address in the

complaint. Thus, the address not tallying

with the notice does not vitiate issuance and

service of notice on the accused for the

reason that it is not the case of the accused

that the address mentioned in Exs.P5 and

P6 are not his office address. Further he has

also not disputed the shara on Ex.P6 “not

claimed”.

The learned Magistrate at para-27 of the

judgment has observed that it is not proved

beyond reasonable doubt that there is

malafide on the part of PW1 in sending the

notice to the wrong address. Admittedly, the

accused is residing in the address mentioned

in the notice. It is clear that the notice is

properly addressed, prepaid and duly sent

through acknowledgment due.

The learned Magistrate at para-28 of the

judgment has observed that no doubt,

Ex.P6(a) does not bear the address which is

shown in Ex.P6. It is argued by the learned

counsel that he has produced the postal

receipt under Ex.P4 to show that he has sent

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the notice even to that address,

apprehending that he may not be available

in the address that has been mentioned in

Ex.P6. The very production of Ex.P4 shows

that there are no malafide on the part of

PW1, but out of due diligence, he has sent

the notice to both the addresses as

mentioned in Ex.P5. In view of production of

Ex.P4, the conduct of the complainant

cannot be doubted. Further, there is no

question of concocting Ex.P5 or Ex.P6 as he

is only complying with the mandatory

requirement of the law.

The learned Magistrate at para-29 of the

judgment has observed that the last and

foremost ingredient that is required to be

proved is that the accused must show

sufficient cause for non-payment of amount

shown under Ex.P1 in discharging his

liability within 15 days from the date of

service of notice. The shara at Ex.P5 clinches

the issue of service of demand notice. But for

the reasons best known to the accused, he

has not paid the amount well within the time

nor shown sufficient cause for non-payment

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of amount as stipulated in the notice and

nothing prevented him to receive the notice

and to give a proper reply. The very conduct

of the accused shows that he avoided receipt

of notice sent by the complainant. Thus, he

deliberately avoided due service of notice.

No doubt, there was a memo filed by the

complainant stating that there was an

undertaking by the accused. He has noted

the same in the order sheet and drawn an

inference that Ex.P1 was issued by the

accused towards discharge of his liability.

The trial Court on perusal of oral and

documentary evidence held that it is amply

proved with all probabilities that the

complainant has proved all the components

of Section 138 of N.I. Act. The trial Court at

para-35 of the judgment has observed that

during the pendency of these proceedings,

the complainant has reported receipt of

Rs.1,20,000/- from the accused and that

amount has to be deducted in the total

cheque amount of Rs.5,00,000/-. After

deducting the said amount i.e.,

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Rs.1,20,000/-, the accused is liable to pay a

sum of Rs.3,80,000/- to the complainant

towards discharge of his liability.

Acting under Section 255(2) of Cr.P.C, the

accused was convicted for the offence

punishable under Section 138 of N.I. Act and

he was sentenced to pay a fine of

Rs.3,80,000/- after deducting Rs.1,20,000/-

in the total cheque amount of Rs.5,00,000/-

and in default, to undergo simple

imprisonment for six months.

7. Feeling aggrieved by the same, the

accused has preferred Criminal Appeal

No.25034/2008. Criminal Revision Petition

No.25053/2008 was preferred by the complainant

seeking to impose fine amount equal to double the

amount of the cheque.

8. Finding of the lower appellate Court is as

under:

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Lower appellate Court raised two points as

under:

a) Whether the appellant in Criminal Appeal

No.25034/2008 has made out sufficient

grounds to set-aside the impugned order

passed by the lower Court?

b) Whether the petitioner in Crl.RP.

No.25053/2008 has made out sufficient

grounds to impose fine equal to double the

amount of the cheque?

c) What order?

Lower appellate Court answered the above

points as under:

a) In the affirmative

b) In the negative

c) As per final order

Lower appellate Court at para-10 of its

judgment has observed as under:

The complainant has contended in his

complaint that he has issued two notices to

the accused. One notice was served on the

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accused personally and the same was

acknowledged by the accused and the other

was returned as not claimed. But, at the time

of trial, the complainant did not produce the

postal acknowledgment which was served on

the accused personally as stated in the

complaint. PW1 has deposed that he has

issued two legal notices with regard to

bouncing of the cheque which is marked at

Ex.P1 to the accused to two different

addresses. One notice was sent to his

residential address and other was sent to his

work place. The complainant produced the

unserved returned postal cover at Ex.P6

wherein the address of the accused is

mentioned as Balaji Groups Outdoor

Advertising (P) Ltd., No.13, 9th Main Road,

Kalyana Nagar, Banasavadi Main Road,

Bangalore-43. The accused has specifically

denied by stating that he was not working in

this address at any point of time and it is not

his official address. The accused as DW1 has

also deposed that the address described in

Ex.P5 i.e. the copy of legal notice which was

sent through Ex.P6 postal cover is not his

correct address. He is permanently residing at

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No.115, 2FC, 2nd Cross, Near St. Vincent

Polloti Church, OMBR Layout, Banasavadi

Main Road, Bangalore. Ex.P5 is the legal

notice which was sent to the accused notifying

the dishonour of the cheque issued by him. No

doubt, Ex.P5-copy of the legal notice is issued

in respect of dishonour of cheque bearing

No.049940, dated 29.07.2004, but the same

was sent to the address No.13, 9th Main Road,

Kalyana Nagar, Banasawadi Main Road,

Bangalore and not to the address mentioned in

the cause title of the complaint. Even the

Complainant has admitted that the address

mentioned in Ex.P5 is different from that of

the address mentioned in the complaint. So, it

is very much clear from the documents

produced by the complainant that notice was

sent to the address as mentioned in Ex.P5

while the complaint was filed against the

accused showing some other address. When

the accused has specifically denied and

contended that he was not running any

business in the address to which the

complainant issued the said demand notice, it

is sufficient on his part to rebut the service of

notice, because, Ex.P6 postal cover was

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unserved against the accused and it was

returned with a shara ‘not claimed’. So, there

is a rebuttable presumption with regard to

service of notice on the accused. When the

accused has rebutted before the Court that the

address mentioned in the postal cover was not

his correct address, the burden shifts on the

complainant to prove that the accused was

residing or staying in the same address to

which he had sent the legal notice. Admittedly,

the complainant has produced no document to

show that the accused was running a business

under the name and style “Balaji Groups

Outdoor Advertising (P) Ltd.” at the address

mentioned in the legal notice.

PW1 has deposed before the Court by filing

an affidavit that he had sent legal notice to two

addresses of the accused. During the time of

cross-examination, he has deposed that he

had produced the postal receipts for having

sent two registered notices. But, in fact, he has

produced only one postal receipt for having

sent one registered notice to the accused. He

has also admitted that he did not send the

legal notice under COP. On the other hand, he

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has deposed that he had produced the postal

acknowledgment for having duly served the

notice on the accused. But, such postal

acknowledgment is not produced before the

Court.

In the lower appellate Court, the contention

of the learned counsel for the complainant is

that Ex.P5-legal notice shows both the

addresses of the accused i.e. his working place

as well as his residential address. On perusal

of Ex.P5 issued to the accused where he was

alleged to have been running his business, his

residential address is mentioned in the bottom

of the registered notice. But no such postal

covers, receipts, acknowledgments were

produced before the Court to show that this

notice was sent to the residential address of

the accused.

In the lower appellate Court, the contention

of the accused is that the residential address

is subsequently inserted in Ex.P5 only to

overcome the difficulties of non-issuing any

notice to the accused. In order to substantiate

his contention, he has relied on the original

32

notice which was sent under Ex.P6. It is seen

that the unserved registered cover Ex.P6 was

opened before the Court and the notice kept

inside is marked at Ex.P6(a). On perusal of

Ex.P6(a) which is the original of Ex.P5, which

was issued by the complainant to the accused,

it do not disclose the residential address of the

accused as mentioned in Ex.P5. So, the claim

of the accused that the residential address of

the accused has been subsequently inserted in

the office copy of the legal notice which is

marked at Ex.P5 is believable. The

complainant did not give any explanation as to

why he did not mention the residential address

of the accused in Ex.P6(a). So, the claim of the

complainant that he has issued two notices to

the accused, one to his work place and the

other to his residential address cannot be

accepted.

The trial Court has presumed certain

things in favour of the complainant that he

has mentioned the residential address of the

accused in Ex.P4 and as such the complainant

also issued notices to both the addresses and

33

as such came to a conclusion that there was

valid service of notice.

The Lower appellate Court at para-11 of its

judgment has observed that the claim of the

complainant is that the accused was running

his business in the given address as noted in

Ex.P5 and Ex.P6(a). PW1 had admitted that he

has filed the complaint against the accused by

showing his residential address and not his

work place. The explanation given by the

complainant in this regard is very vital to

decide about proper service of notice. The

complainant admitted that the address

mentioned in Ex.P3 is not the address shown

in the cause title of the complaint. He

voluntarily deposed that the residential

address is shown in the complaint, as the

office of the accused was closed from the date

of issuance of the cheque. According to his

own statement before the Court, that too given

voluntarily, disclose that the accused has

closed his office from the date of issuance of

the cheque itself. The date of issuance of the

cheque is 29.07.2004. If admission of PW1 is

taken into consideration, the accused was not

34

running his office from 29.07.2004 itself. It is

not a stray sentence altered by the

complainant with regard to closure of the office

by the accused from the date of issuance of

cheque. But, he had explained the same by

saying further that he approached the accused

at his home and demanded to pay the dues

after one or two weeks of issuance of the

cheque. Admittedly, the cheque issued by the

accused was presented on 25.11.2004 i.e. after

04 months to the date of its issuance. The

complainant was very much aware that since

the date of issuance of the cheque the accused

closed his office and hence, he approached the

accused at his home for making demands and

such visits of the complainant was made after

one or two weeks to the date of issuance of the

cheque Ex.P1. So, it is very much clear that

even before issuance of legal notice to the

accused as per Ex.P5, the complainant was

very much aware that the accused had closed

his office as on the date of presentation of the

cheque. So, it appears that the complainant

had intentionally issued the notice to the

accused by showing his official address,

though he was aware that the accused had

35

already closed his office. The complainant was

very much aware of the residential address of

the accused as on the date of issuance of

Ex.P5, as he had already approached the

accused in person at his house. Inspite of that,

he did not make any efforts to issue legal

notice by showing the residential address of

the accused. So, the defence of the accused is

that he was not working in the address as

mentioned in Ex.P5 as on the date the notice

was issued. So, it is very much clear that as

on 28.10.2004 the accused was not working in

the address as mentioned in Ex.P6. When the

complainant was also aware of this fact, the

presumption about service of notice as against

the shara ‘not claimed’ as reported by the

Postal Department cannot be drawn in favour

of the complainant.

In the present case, the complainant was

aware of the residential address of the accused

as on the date of issuance of the cheque. He

made no efforts to issue notice to his

residential address. The main purpose behind

sending a demand notice is to give an

opportunity to the accused to make payments

36

due by him in respect of the cheque which was

dishonoured. If the accused comply with the

demand made by the complainant by paying

the amount under the cheque within

mandatory period of 15 days, then filing of the

complaint under Section 138 of the Negotiable

Instruments Act will not arise at all. So, even

after issuance of notice by giving a period of 15

days time, if the accused failed to pay the

amount, then only the accused is liable to be

prosecuted under Section 138 of the

Negotiable Instruments Act. In the absence of

evidence about service of notice, the complaint

is not maintainable.

The learned Judge of the lower appellate

Court at para-13 of the judgment has observed

that it is very much clear that the learned

Magistrate failed to appreciate the oral

evidence as well as documentary evidence

produced by the parties in respect of service of

notice which is mandatory under the

provisions of the Negotiable Instruments Act,

and as such, the order of the learned

Magistrate in convicting the accused is bad in

law and is liable to be aside.

37

The lower appellate Court at para-14 of the

judgment has observed that though the

appellant has contended much about the pre-

existing debt and issuance of cheque for the

purpose of security and tampering of the

cheque by the complainant by using a blank

cheque to fill an amount of Rs.5 Lakhs against

Rs.1.5 Lakh which was actually due by the

accused etc., the same need not be discussed

at this stage as the complaint filed by the

complainant itself is not maintainable for want

of service of notice against the accused as

contemplated under the Act. Hence,

considering all these aspects, the lower

appellate Court came to a conclusion that the

appellant has made out sufficient grounds to

set-aside the judgment passed by the learned

Magistrate in CC No.10325/2005 dated

29.03.2008. Therefore, the lower appellate

Court set-aside the judgment and order

passed by the learned XXV ACMM, Bangalore,

in CC No.10325/2005 dated 29.03.2008

convicting the appellant under Section 138 of

N.I. Act.

38

Criminal revision petition No.25053/2008

filed by the petitioner/complainant under

Section 397 of Cr.P.C seeking enhancement of

fine amount was also dismissed. However,

it was held that the order of dismissal of the

complaint will not come in the way of

recovering the amount due by the accused to

the complainant under civil law, subject to

provisions of Limitation Act, etc. The fine

amount if any deposited by the appellant is

ordered to be returned to him.

9. Feeling aggrieved by the same, the

complainant/appellant has preferred this criminal

appeal.

10. Learned counsel for the appellant submits

as under:

The accused respondent has acknowledged the

liability and he has made payment to the extent of

Rs.1,20,000/-. Accused has also not claimed notice.

The endorsement on the returned notice is “not

39

claimed”. The notice was sent to correct address.

The lower appellate court has not appreciated the

evidence in a proper prospective. Accused has

voluntarily admitted the liability. The lower appellate

court has come to the conclusion that there was no

issuance of notice by the complainant. The

complainant has issued two notices to the accused.

EX.P5 is the postal receipt sent to the residential

address of Manjunath i.e. No.9, Sri Lakshmi

Venkateshwara Complex, Banasawadi Outer Ring

Road, Bangalore – 40. EX.P6 was the notice sent to

the office address of the accused which was returned

with the shara “not claimed”. The accused gave a

blank cheque towards purchase of material in a sum

of Rs.1,50,000/-. The complainant has filled the

cheque in a sum of Rs.5,00,000/- and this has been

indicated in the grounds of the appeal memo. The

appellant submits that he has not entered into

compromise. The acquittal order passed by the court

40

below is not based on evidence and the materials

placed before it. However, the learned counsel for

the appellant wanted to clarify with regard to the

averment made in the appeal memo that the

observation of the lower appellate court that the

accused was liable to pay only Rs.1,50,000/- is not

correct and that the accused was liable to pay a sum

of Rs.5,00,000/-.

11. Learned counsel for the appellant has

relied on the following citations.

i) In the case of SUBODH S

SALASKAR V. JAYPRAKASH M SHAH

AND ANOTHER reported in AIR 2008

SUPREME COURT 3086; wherein Head

Notes ‘A’ and ‘B’ read as under:

“(A) Negotiable Instruments Act (26 of

1881), Ss142 (b), Proviso (as inserted in

2002), 138-Dishonour of cheque –Belated

41

complaint-cognizance by condoning delay-

s, 142 (b) proviso conferring such power- Is

substantive provision- cannot be given

retrospective effect.

(B) Penal Code (45 of 1860), Ss, 415,

420-cheating-Accused alleged to have

issued post dated cheques- cheques on

presentation on a much later date

dishonored on ground that account was not

operative-Even if accused had closed

account subsequently-Intention of accused

to cheat complainant right from date of

issuance of cheque cannot be inferred-

S.420 therefore does not get attracted.”

ii) In the case of D VINOD SHIVAPPA

V. NANDA BELLIAPPA reported in (2006)

6 SUPREME COURT CASES 456;

wherein Head Note ‘A’ reads as under:

“A. Negotiable Instruments Act,

1881- Ss,138 proviso (b), (c) and 142

Deemed service of notice sent by registered

post-presumption of receipt of notice-When

42

arises-Fraudulent avoidance of notice-

nature and proof- Held, when drawer

refuses to accept the notice or when he

evades service of the notice by fraudulent

or unscrupulous means so that the

envelope containing the notice is returned

with a false endorsement such as premises

locked or addressee not available, court

may presume receipt of the notice by the

drawer- Whether service of notice was

fraudulently avoided by the drawer is a

question of fact to be determined by court

on the basis of evidence on record- There is

no fixed rule that whenever notice could

not be served due to non-availability of the

addressee, court would presume service of

the notice-When respondent drawee of the

cheque issued notice to appellant drawer

but the same was returned with the

endorsement “Party not in station, arrival

not known” whereupon respondent filed a

complaint under S.138 stating that the

notice may be deemed to have been served

and Magistrate passed orders under S.204

Cr.P.C., registering a criminal case and

issuing process against appellant, held

43

petition filed by appellant under S.482

Cr.P.C., for quashing of the proceedings

was premature as it was open to

respondent to prove at trial that the

endorsement was not correct and the

drawer with the knowledge of the notice

had deliberately avoided to receive the

same- Therefore, High Court should not

exercise its jurisdiction under S.482 Cr.P.C.

in such a situation- Object of S.138 and

especially its proviso © considered-

Mischief rule of interpretation applied-

Criminal procedure Code, 1973, Ss.482

and 402-General clauses Act, 1897, S.27.”

iii) In the case of BASANT SINGH

AND ANOTHER V. ROMAN CATHOLIC

MISSION reported in (2002) 7 SUPREME

COURT CASES 531; wherein Head Note

‘A’ reads as under:

“A. Civil Procedure Code, 1908-Or. 5

R.19-A(2) proviso-Service of summons by

registered post: declaration by court in

case of non-receipt of acknowledgement

44

within 30 days-Held, conduct of defendant

acquires importance, once it is proved that

summons has been sent by registered post

to a correct and given address – Further

held, bald assertion without evidence that

registered letter was not tendered would

not be sufficient to discharge the statutory

burden cast on the defendant – Where of

the two defendant-appellants, one

appeared as a witness, but only made

simple statement denying receipt of

summons and the other did not appear at

all, held on facts, High Court rightly

dismissed revision petition of appellants

and rightly confirmed the ex parte decree

against them- General clauses Act, 1897,

S. 27 – Rent control and Eviction – Notice –

Conduct of tenant – Significance of”

12. Learned counsel for the respondent

submits as under:

The notice was issued to the wrong address.

The address mentioned in the notice and the address

mentioned in the complaint differs. No notice has

45

been issued as per Section 138(b) of the N.I. Act. He

further submits that Diwakar has admitted the claim

and he has paid to the extent of Rs.2,00,000/-. At the

inception stage, he paid Rs.50,000/- and

subsequently, he has paid Rs.1,20,000/- in the court

during the course of trial. Invoice was produced by

the complainant. Attention of this court was drawn

to Ex.P3 to submit that the cheque was post-dated.

This clearly indicates that it is given by way of

security. Original invoice has to be with the accused

i.e., Manjunath, but it is with the complainant.

Ex.P3-copy of invoice was produced by the

complainant. There is no KST – CST number in

Ex.P3.

13. The main contention urged by the learned

counsel for the appellant is that there is an

admission by the accused. Admission is not a

conclusive proof without corroboration. He is still at

46

liberty to disprove it by adducing evidence having

regard to his own interest. A party is not bound by

an admission on a point of law, nor he is precluded

from ascertaining the contrary to it which he is

entitled to.

14. In the instant case, though the accused

has paid a sum of Rs.1,20,000/- during the course of

trial, that itself does not amount to agreeing to pay

the cheque amount. In other words the accused has

not confessed his guilt before the Court. Unless the

accused confesses his guilt, he cannot be convicted

for the offences charged.

15. One of the contention raised by the

learned counsel for the appellant is the principle of

estoppel. Estoppel cannot have the similar

characteristic of conclusive evidence. The burden of

proving the ingredients of Section 115 of the Indian

Evidence Act lies on the party claiming the principle

47

of estoppel, but in the instant case no evidence has

been adduced by the complainant to establish the

principle of estoppel in the Court below.

16. Another contention urged by the learned

counsel for the appellant is that two notices were

issued to the accused.

17. Section 27 of the General Clauses Act,

1897 reads as under:

“Meaning of Service by post –

Where any (Central Act) or Regulation

made after the commencement of this Act

authorises or requires any document to be

served by post, whether the expression

‘serve’ or either of the expressions ‘give’ or

‘send’ or any other expression is used,

then, unless a different intention appears,

the service shall be deemed to be effected

by properly addressing, pre-paying and

posting by registered post, a letter

containing the document, and, unless the

48

contrary is proved, to have been effected at

the time at which the letter would be

delivered in the ordinary course of post.”

18. Ex.P6 - legal notice is sent by advocate for

the complainant to Manjunath, Balaji Groups

Outdoor Advertising Limited. In that notice, details of

the transaction has not been mentioned. It is

mentioned that the cheque dated 29.07.2004 was

issued for a sum of Rs.5,00,000/- towards discharge

of legal liabilities. The said cheque was presented

and it was returned. Notice is sent to Manjunath to

the address mentioned as Balaji Groups Outdoor

Advertising Limited, Bangalore – 43. The cover was

returned as “not claimed”. Even the

acknowledgement is returned. Ex.P5 is the copy of

notice sent to Manjunath, C/o N Muniyappa, 116, 2

EC, 2nd cross, Near St. Vincent Polloti Church, (1)

MBR Layout, Banasavadi Main Road, Bangalore. But

in the original notice, this address is not mentioned.

49

Ex.P6 was returned and the envelop was opened in

the open court and Ex.P6(a) - notice was perused by

the learned Judge and found that the address

mentioned in Ex.P.5 was not written. From this, it is

clear that the address was added subsequently.

Therefore, the contention of the learned counsel for

the appellant that the notice was sent to the

residential address of accused by mentioning the

correct address cannot be accepted.

19. I have carefully examined the evidence of

the complainant as well as the accused and also the

documentary evidence. On appreciation of the

evidence and material placed on record, it is clear

that the purchaser is one Diwakar and the cheque

was issued by Manjunath - accused. There is no

positive evidence as to who filled the cheque for a

sum of Rs.5,00,000/-. Issuance of post-dated cheque

bearing No.049940 dated 29.7.2014 is mentioned in

Ex.P.3 – copy of invoice. From this, it is clear that the

50

cheque was issued by way of security. The version of

DW.2 is that he purchased accessories to his

brother’s Maruthi Van. They have deposited a sum of

Rs.1,20,000/- in the trial court and another sum of

Rs.50,000/- was paid as advance. The lower

appellate court has appreciated the evidence placed

on record. To constitute the offence under Section

138 of the N.I. Act, the following conditions have to

be satisfied.

“i) The dishonoured cheque should

have been issued for the discharge in

whole or part of any debt or other liability.

ii) The dishonoured cheque should

have been presented within the period of

six months or within the period of its

validity, whichever is earlier.

iii) The payee or the holder in due

course of the dishonoured cheque should

have issued a notice in writing to the

drawer within thirty days of the receipt of

information by him from the bank

51

regarding the return of the cheque as

unpaid.

iv) After the receipt of the said notice

issued by the payee or the holder in due

course to the drawer of the cheque, the

drawer should have failed to pay the

cheque amount within fifteen days of the

receipt of the said notice.

v) On non-payment of the amount due

on the dishonoured cheque within fifteen

days of the receipt of the notice by the

drawer, the complaint should have been

filed within one month from the date of

expiry for the payment of amount before a

Metropolitan Magistrate or a Judicial

Magistrate not below the rank of a Judicial

Magistrate of the first class;

Provided that the cognizance of a complaint

may be taken by the Court after the

prescribed period, if the complainant

satisfies the Court that he had sufficient

cause for not making a complaint within

such period.”

52

20. In the instant case, the notice sent to the

accused was not to the correct address. This aspect

has been appreciated by the lower appellate court.

One of the essential ingredients to bring home the

offence under Section 138 of the Negotiable

Instruments Act is that the notice should have been

issued to the accused by properly addressing,

prepaying and posting through registered post. In

this case, the address is not properly mentioned.

Evidence on record clearly discloses that the

residential address of accused was not mentioned in

EX.P6(a)-Notice, which was opened in the trial Court.

Therefore, essential ingredients of Section 138 is not

fulfilled. The lower appellate court has appreciated

these materials and evidence placed on record and

has come to a conclusion that the offence under

Section 138 of the Negotiable Instruments Act is not

made out. As stated earlier, the ingredients of

Section 138 of the Negotiable Instruments Act has

53

not been fulfilled. The burden lies on the

complainant to prove his case. But in the instant

case, the complainant has not established his case

beyond reasonable doubt. Therefore, I do not find

any infirmity in the judgment of the lower appellate

court.

21. In view of the above discussion, I pass the

following order.

This Criminal Appeal is dismissed.

Sd/-

JUDGE

JTR/YKL