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TMI Blog2020 (4) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... Cases. The grounds for acquittal were that the Appellant had failed to prove the ingredients of "giving Notice" as required under Section 138 of the N.I. Act. The Appellant failed to establish beyond a reasonable doubt that a debt or any other liability existed in his favour. That the presumption under Section 139 of the N.I. Act was successfully rebutted by the Respondent. Hence, the Appeals. 3. The facts common in all the Complaints, leading to the Appeals may briefly be adverted to. The Appellant required finances for his son's incomplete hotel project at Gangtok, Sikkim. The Respondent in the month of March, 2013 offered to assist him to obtain loan of Rupees five crores for the said purpose from Syndicate Finance Private Limited, Mumbai. The condition for obtaining such loan was an advance payment of 2% of the capital applied for, as processing fees. The Appellant agreed to the said proposal and thereafter made over a sum of Rs. 12,70,000/- (Rupees twelve lakhs and seventy thousand) only, to the Respondent in March, 2013 in two tranches of Rs. 10,00,000/- (Rupees ten lakhs) only, and Rs. 2,70,000/- (Rupees two lakhs and seventy thousand) only, for the aforementioned purpose. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Respondent), informing the Respondent that the Cheque bearing No.002215 drawn on AXIS Bank, Gangtok Branch, dated 31.05.2015 amounting to Rs. 21,70,000/- (Rupees twenty one lakhs and seventy thousand) only, issued by the Respondent had been deposited by the Appellant in the Central Bank of India, Gangtok Branch with due notice to the Respondent. The Cheque was dishonoured vide its return memo dated 07.04.2015 with the remarks "Account closed" (Criminal Appeal No.34 of 2018 arising out of P.C. Case No.31 of 2015). (c) Legal Notice on 16.03.2015, (received by Dharni Sharma, brother of the Respondent), informing the Respondent that the Cheque bearing No.002217 drawn on AXIS Bank, Gangtok Branch, dated 15.02.2015 amounting to Rs. 11,00,000/- (Rupees eleven lakhs) only, issued by the Respondent had been deposited by the Appellant in the Central Bank of India, Gangtok Branch with due notice to the Respondent. The Cheque was dishonoured vide its return memo dated 17.02.2015 with the remarks "Funds insufficient" (Criminal Appeal No.35 of 2018 arising out of P.C. Case No.30 of 2015). Hence, the prayers in the Appeals. 4. After the Complaints were lodged under Section 138 of the N. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Diary extract of the Crime Branch, Crime Investigation Department, dated 18.09.2014 revealed that the Appellant had complained to the Crime Investigation Department regarding non-refund of his money amounting to Rs. 45,00,000/- (Rupees forty five lakhs) only, by the Respondent, prior in time to issuance of the Cheques and hence assumed that the Respondent was coerced to execute Exhibit 1. The learned trial Court next ventured into discussing the merits of Exhibit 1, the contents of which stood admitted by the Respondent, therefore, the conclusion of the learned trial Court that the contents cannot be relied for "speaking of the actual facts" is untenable. The learned trial Court also raised doubts about the place where Exhibit 1 was signed viz. the Chambers of the Advocate and further opined that the Appellant had failed to prove that the Cheques had been dishonoured, whereas the documents relied on by the Appellant marked Exhibit 4 in all the Complaints, clearly indicate the rejection of the Cheques. The Respondent did not deny issuance of the Cheques. (c) That, the learned trial Court reached a finding that the presumption against the Respondent was duly rebutted by him as req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In this context reliance was also placed on Krishna Janardhan Bhat v. Dattatraya G. Hegde (2002) 2 SCC (Cri) 166 and Rangappa v. Sri Mohan 2010 Cri.LJ 2871. That, in the facts and circumstances as placed before this Court the impugned Judgments of the learned trial Court warrant no interference and the Appeals be dismissed. 7. I have heard the rival submissions put forth by Learned Counsel at length and given due and anxious consideration to the same. I have also carefully perused the records of the case including the evidence, impugned Judgments and the citations made at the Bar. 8. The questions germane to the decision of the Appeals are; (i) Whether the learned trial Court was in error in concluding that the Appellant failed to prove the ingredients of "giving notice" as required under Section 138 of the N.I. Act? (ii) Whether the Appellant failed to establish beyond a reasonable doubt that the Respondent had to discharge a debt or a legal liability? (iii) Whether the Respondent was able to rebut the presumption in terms of Section 139 of the N.I. Act? 9. In the first instance it would be relevant to notice the ingredients that make out an offence under Section 138 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the service of Notice is deemed to have been effected. In such a circumstance the requirements of Proviso (b) of Section 138 of the N.I. Act stands complied if the Notice is served in the manner prescribed therein. The object of these provisions are to ensure that unscrupulous drawers of Cheques are unable to avoid service of the statutory Notice by leaving their homes for sometime, and thereby evade prosecution. In this thread, we may usefully refer to the Judgment in K. Bhaskaran v. Sankaran Vaidhyan Balan and Anr. (1999) 7 SCC 510 wherein it was held as follows; "20. If a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice on the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the Act. It must be borne in mind that the court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure. 21. In Maxwell's Interpretation of Statutes, the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee not in station", due service has to be presumed. Though in the process of interpretation right of an honest lender cannot be defeated as has happened in this case. ..." (emphasis supplied) 12. The decisions supra clear the air on the stand of the Hon'ble Supreme Court with regard to service of Notice. It is now essential to consider the Notices issued in the instant matters. The Legal Notice in each Complaint has been marked as Exhibit 5, the Postal Receipt as Exhibit 6 and the Acknowledgment Card as Exhibit 7 respectively. In P.C. Case No.14 of 2015 and P.C. Case No.31 of 2015 the Notices allegedly were received by Dharni Sharma, while in P.C. Case No.30 of 2015 the Notice allegedly was received by Pashupathi Sharma. The Respondent has not disputed that Dharni Sharma is his younger brother and Pashupathi Sharma is his father or that they were residents of "Linkey." While carefully walking through the evidence of the Respondent he asserts that he was not residing in "Linkey," Pakyong, East Sikkim from 2012-13 and that his father resides there. That, he is now residing in Gangtok due to his business and thereby had no knowledge of the alleged Legal Notices sent by the Advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore concludes that the Notices having been sent to the Respondent's correct address were duly served, fulfilling the requirement of "giving Notice," contrary to the finding of the learned trial Court. 14. Now to address the second question hereinabove. The learned trial Court held that no proof of a legal liability of the Respondent towards the Appellant existed as no Money Receipts were tendered in evidence to establish transactions between the Appellant and the Respondent. That although the Appellant deposed during cross-examination that money was taken by him from one Lalit Agarwal, Prem Chand Sharma and Sheetal Pradhan, he failed to examine them as witnesses. That, it was unbelievable that the Appellant would hand over money for obtaining loan without considering its mode of repayment and all other allied consequential terms of liabilities or conditions. The learned trial Court was impressed by the evidence of the Respondent that Exhibit 1 was prepared by him under coercion. 15. The contents of Exhibit 1 are explicit acceptance of liability by the Respondent. Although the learned trial Court was of the opinion that coercion was evident on account of absence of independen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance. The argument of learned Counsel for the Respondent that the Appellant is a Government servant hence the source from where he afforded Rs. 42,00,000/- (Rupees forty two lakhs) only, has not been indicated was never raised in the evidence of the Respondent and for the first time finds place only in Appeal. The Judgment of the Hon'ble Bombay High Court in Sanjay Mishra (supra) relied on by the Respondent is overruled by the ratio of the Hon'ble Supreme Court in Rohitbhai Jivanlal Patel v. State of Gujarat and Others MANU/SC/0393/2019 wherein it was inter alia held as follows; "17. In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the Trial Court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the Trial Court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 118 of the N.I. Act, the relevant portion is extracted hereinbelow; "118. Presumptions as to negotiable instruments.-Until the contrary is proved, the following presumption shall be made:- (a) of consideration-that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;" It emerges from a reading of the said provisions that the presumption under Section 139 of the N.I. Act is an extension of the presumption of Section 118(a) of the Act. If the negotiable instrument happens to be a Cheque, Section 139 raises a further presumption that the holder of the Cheque received the Cheque in discharge in whole or in part of any debt or other liability. Section 118 of the N.I. Act uses the phrase "until the contrary is proved," Section 139 of the N.I. Act provides "unless the contrary is proved." Section 4 of the Evidence Act which defines "may presume" and "shall presume" makes it clear that presumptions to be raised under the aforestated provisions are rebuttable. In Hiten P. Dalal v. Bratindranath Banerjee 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal cases and shifts the onus on to the accused." (Ibid. at p. 65, para 14) Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter, all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the nonexistence of the presumed fact." 19. In Kamala S. v. Vidhyadharan M.J. and Another(2007) 5 SCC 264 , it was held as follows; "16. The nature and extent of such presumption came up for consideration before this Court in M.S. Narayana Menon Alias Mani v. State of Kerala and Anr. [(2006) 6 SCC 39] wherein it was held: "30. Applying the said definitions of "proved" or "disproved" to the principle behind Section 118(a) of the Act, the court shall presume a negotiable instrument to be for consideration unless and until after considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conscious and aware that interference against an acquittal recorded by the learned trial Court should be rare and in exceptional circumstances, however it is open to the High Court to reappraise the evidence and the conclusion drawn by the learned trial Court to consider whether the Judgment of the learned trial Court can be stated to be perverse. The word "perverse" has to be understood in law as defined to mean "against the weight of evidence." From the discussions that have ensued above I am of the considered opinion that the findings arrived at by the learned trial Court are perverse and erroneous. 23. Consequently, the Appeals are allowed. 24. The impugned Judgments are set aside. 25. The Respondent is convicted of the offence under Section 138 of the N.I. Act in each of the afore detailed Complaints. 26. He is sentenced to undergo Simple Imprisonment of three months each, under Section 138 of the N.I. Act in each of the Complaints. The Sentences shall run concurrently. 27. The Hon'ble Supreme Court in Meters and Instruments (P) Ltd. v. Kanchan Mehta (2018) 1 SCC 560 inter alia held that; "18.4...apart from the sentence of imprisonment, the court has jurisdiction under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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