IN THE HIGH COURT OF KARNATAKA, BANGALORE BEFORE THE HON BLE MR.JUSTICE C R KUMARASWAMY CRIMINAL APPEAL NO.14 OF 2010

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1 1 IN THE HIGH COURT OF KARNATAKA, BANGALORE DATED THIS THE 13 TH DAY OF AUGUST, 2014 BEFORE THE HON BLE MR.JUSTICE C R KUMARASWAMY BETWEEN: CRIMINAL APPEAL NO.14 OF 2010 M/S CAR QUEEN NO.39, SWASTHI ROAD 2 ND CROSS, SHANTHINAGAR BANGALORE 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 2 ND CROSS, NEAR ST.VINCENT POLLOTI CHURCH OMBR LAYOUT BANASWADI MAIN ROAD BANGALORE RESPONDENT (BY SRIYUTHS.SRINIVASA AND RAGHAVENDRA.S - ADVOCATES)

2 2 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: 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:

3 3 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 dated 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 The same was returned by the accused s banker with a shara Insufficient Funds.

4 4 A legal notice dated 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 As per acknowledgement, the accused has received the notice on Therefore, the cause of action arose firstly on when the cheque was

5 5 presented, secondly on when the legal notice was sent, thirdly on 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, 2 nd Cross, Shanthinagar, Bangalore 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

6 6 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

7 7 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

8 8 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

9 9 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

10 10 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

11 11 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, 2 nd cross, Near St. Vincent Polloti Church, (1) MBR

12 12 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 , 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.

13 13 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 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

14 14 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

15 15 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 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

16 16 his name. Ex.P1 - cheque is dated 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 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

17 17 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

18 18 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

19 19 proceedings, a memo was filed by the complainant on 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 , Rs.20,000/- on , Rs.30,000/- on and Rs.20,000/- on 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 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

20 20 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

21 21 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

22 22 notice said to have been issued to the accused on 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

23 23 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

24 24 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

25 25 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.,

26 26 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. under: 8. Finding of the lower appellate Court is as

27 27 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

28 28 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, 9 th 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

29 29 No.115, 2FC, 2 nd 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 , dated , but the same was sent to the address No.13, 9 th 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

30 30 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

31 31 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 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 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 If admission of PW1 is taken into consideration, the accused was not

34 34 running his office from 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 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 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 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 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 37 The lower appellate Court at para-14 of the judgment has observed that though the appellant has contended much about the preexisting 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 Therefore, the lower appellate Court set-aside the judgment and order passed by the learned XXV ACMM, Bangalore, in CC No.10325/2005 dated convicting the appellant under Section 138 of N.I. Act.

38 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. as under: 10. Learned counsel for the appellant submits 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 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 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/ 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 41 complaint-cognizance by condoning delays, 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, Ss,138 proviso (b), (c) and 142 Deemed service of notice sent by registered post-presumption of receipt of notice-when

42 42 arises-fraudulent avoidance of noticenature 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 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 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 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.P 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 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 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 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 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, 2 nd cross, Near St. Vincent Polloti Church, (1) MBR Layout, Banasavadi Main Road, Bangalore. But in the original notice, this address is not mentioned.

49 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 dated is mentioned in Ex.P.3 copy of invoice. From this, it is clear that the

50 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 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 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 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