Dismissed

S.Pavan Kumar, R.R.Dt., v. State of Telangana, Rep Pp and Anr.

Telangana HC14 Sept 2022CRLRC/103/2015

Case brief

AI extract

What is this about?

In this criminal revision under Sections 397 and 401 of Cr.P.C., the High Court dismissed the petition challenging conviction and sentence for cheque dishonour, upholding the lower courts' findings that the accused failed to rebut the statutory presumption regarding notice service and debt liability.

What did the court decide?

Criminal Revision case dismissed; bail granted to petitioner cancelled; directed to surrender before trial court.

S.Pavan Kumar, R.R.Dt., Vs State of Telangana, Rep Pp and… — Cheque Dishonour | Telangana HC (2022)

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Note: The Accused^{was released on bail vide courtorderdaled 2810112015 in} Crl.R.C MP No.^{1 75120'15.}

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IN THE HIGH COURT^{FOR THE STATE OF TELANGANA} AT HYDERABAD

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WEDNESDAY, THE FOURTEENTH^{DAY OF SEPTEMBER} TWO THOUSAND AND^{TWENTY TWO}

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PRESENT

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THE HONOURABLE^Dr. JUSTICE^{G.RADHA RANI}

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CRIMINAL REVISIO^{N CASE NO:103 OF 201 5}

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criminal Revision case^{under sections 397 & 401 of crl.P.c againstthe} Judgment in crl.A.No.7o4^{t2012 dated 18t1212014 on the file of the court of the} Additional Metropolitan Sessions^{Judge, Ranga Reddy District at L.B Nagar'} preferred against the^judgment in cc No.10B^{of 2011 daled 2611112012on the file of} the Court of the Vl Special^{Magistrate, Hasthinapuram, RangaReddy District'}

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Between:

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S.Pavan Kumar, S/o, S.Kishan^{Rao, aged about41 years' Occ: Business,R/o H No'} 206, Aliyabad, Shamirpet Mandal,^R.R.District -. - -....PETITIONERY APPELLANT/^ACCUSED

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AND

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The State of Telangana, rept. by the^{PublicProsecutor, High Court at}

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Hyderabad.

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GlNarender Reddy, S/o. G.Narasimha^{Reddy,agedaboul-44years,Occ:} Business, R/o. Fla-t No. 458, Dyanamic^{Colony,Meerpet, Saroornagar} Mandal, R. R. District.

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..RESPONDENTS/ RESPONDENTS/^COMPLAINANT

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CRLRCMP. NO: 175 OF 2015

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Petition under Section 397(1) of Cr.P.C^{praying that in the circumstances} stated rn the Memorandum of^{grounds of criminalRevisioncase, the High court} may be pleased to^grant bail to^{the petitionerby suspendingthe sentence} -.of imp'risonment including compensation^{passed in crl.A.No.704 of 2012 on the file} of ihe Additional Metropolitan^{SessionsJudge, Ranga Reddy Districtat L B.Nagar} Confirming the Judgment and^{sentence passed inCC.No 10B of 2011} dt.26.11.2012 on the file of the^{Vl Special Magistrate at HasthinapuramRanga} Reddy District.

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For the Petitioner : SRI C.HARI^{PREETH,Advocate} Forthe Respondent No.1^: ASSISTANT^{PUBLIC PROSECUTOR} For the Respondent No.2 : SRI G.RAMA^{CHANDRA RAO, Advocate} The Court made the following. ORDER

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llON'BLE I)r. Jl-lSI'lCE G. ITADI{A RANI CIIIN{I N,.\I, RI.-'ISTO N C,,\SI'l No.l03 of 2015

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ORDTiR:

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This Criminal Revision Case is liled by the petitioner-appellantaccused against the^judgment passed in Crl.A. No.704 of 2012 dated 18.12.2014 by the Additional Metropolitan Sessions Judge, Ranga-Reddy District at L.B.Nagar confirming the conviction and sentence passed in CC No.108 of 201I dated 26.11.2012 on the file of the VI Special Magistrate, Hasthinapuram, Ranga Reddy District.

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The parties are hereinafter referred as per their array before the trial court.

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The case of the complainant was that the complainant and the accused were known to each other and out of the said acquaintance, the accused approached the complainant and requested for a hand loan of Rs.4,50,000/- and on 07.11.2008, the complainant advanced an amount of Rs.4,50,000/- by way of cash. The accused acknowledged the same and executed an agreement dated 07.11.2008 in favour of the complainant and issued two post dated cheques bearing No.634619 dated 20.11.2008 for Rs.50,0001 and another bearing No.634621 dated 15.12.2008 for Rs.4,00,000i- drawn on Development Credit Bank Limited, Gaddiannaram

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{,,(iRR J -) ( tul (- ya lttjnt ) lj

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Exs.P7 and P8. He rvas residing at Aliabad, Shamirpet Mandal and tlled Ex.Dl, thc photostat copy of his household card in proof of the same.

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5.^'l'he trial court, after considering the oral and documentary evidence on record and as the accused had not disputed his signatures on the cheques, by considering the presumptions under Sections I l8 aird¹³⁹ of Negotiable Instruments Act and under Section 27 of General Clauses Act and Section I 14 of the Evidence Act that the notice was sent to the correct address of the accused, Ibund the accused guilty for the offence under Section 138 of the NI Act, and sentenced him to undergo simple imprisonment for a period of one year and directed to pay compensation of Rs.7,00,000/- and out of that compensation Rs.6,75,000/- to be paid to the complainant.

¶26

Aggrieved by the said^judgment of conviction and sentence imposed against him, the accused preferred an appeal. The appeal was heard by the Additional Metropolitan Sessions Judge, R.R. District at L.B. Nagar and on re-appreciating the evidence on record, the appellate court dismissed the appeal confirming the^{judgmentpassed} by the VI^Special Magistrate, Hyderabad, RR District in CC No.108 of 201 l.

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-1 {'1ll('Ntrl0l.r':t)l:I',^(iRR-J

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Aggrieved lurther, the accused pretbrred this revision contending that the courts below failed to appreciate the evidence on record in proper perspective and committed illegality in convicting and scntencing him on the basis of prcsumptions anrl assu n.r1:rtions. The tria[ Juclge ought not to have held that Ex.Pl was proved which was contrary to Section 114 of Indian Evidence Act. The courts below failed to see that statutory notice under Ex.P.7 was not served. The presumption of drawing the inference of the address written on it as deemed seryice under General Clauses Act, was contrary to law. The leamed Judge failed to appreciate Ex.Dl filed in support of proof of his residence. The accused discharged his burden of non-service of notice under Ex.Dl by rebutting the presumption under Indian Evidence Act. The complainant failed to prove that Ex.P.l was executed at the address given in it and prayed to set aside the^judgment of conviction and sentence passed by the courts below.

¶29

Heard learned counsel for the petitioner-accused and the learned counsel for the respondent-complainant.

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The learned counsel for the petitioner - accused argued on the same lines as raised in the grounds of revision and contended that the accused never obtained any hand loan and denied execution of Exs.Pl to

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Dt t;RR_J 5 CtlR( Nt lttl ot :tt It

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P5. tte contended that Ex.Pl agreement did not contain the signatures of any witness. The complainant had no capacity to lend the amount and failed to prove the mandatory requirements of Section 138 of NI Act. Both the trial court and the appellate court ignored the same and convicted the accused and sentenced him and relied upon the^judgments of the Hon'ble Apex Court in Jugesh Sehgal v. Shamsher Singh Gogit; Rangappa v. Sri Mohan2 on the aspect that the standard of proof for rebutting the presumption under Section 139 ofthe NI Act was that ofpreponderance of probabilities, that the accused could rely on the material submitted by the complainant and need not raise such a defence,

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He further contended that the accused was not residing at Malakpet. Summons were also not served on the accused. He was produced before the trial court on execution of NBW. The household card, marked under Ex.Dl, was issued by the Tahsildar and relied upon the judgment of the Hon'bte Apex Court in Harman Electronics Private Limited and another v. National Panasonic India Private Limited3, wherein it was held that:

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"19. Presumption raised in support of service of notice would depend upon the facts and circumstances of each case. IIs

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'^{(uoog) ta sccos:}

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'izotoy^{rr sccarr} I (2009) l scc 720

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L'^(;RR.J (1lRC :o 11)tot )t)lj

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application is on the qucstion of larv or the^{t'act obtaining.} Presurnption has to be raised not on thc hypothesis or^sunniscs but if the fountlational thcts arc laid dou'n^thcrefor. Only because presumption ofservice olnotice is^possiblc to bc raiscd at the tdal, the sarne by itsell rnay not be a^ground to hold that thc distinction betwecn giving of notice and service of noticc ceases to exist.

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... Only on a service ofsuch notice and failure on the^part of the accused to pay the dernandcd amount witliin a^period of I 5 days thereafter, commission of offence completes. Giving ol' notice, therefbre, camot have any^preccdent over thc service."^'

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He also relied upon the^judgment of the High Court of^Jammu

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and Kashmir at Ladakh in Engineering Control^{v. Banday InfratechPvt.}

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Ltd.a on the aspect that:

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"Once the material on record clearly suggcsts that the^statutory notice of demand was sent by the respondent/cornplainant^ona wrong address, the prcsumption of receipt of notice by^the petitioner/accused docs not arise. Thus, the pre-cor.rdition of filing a complaint under Section 138 of thc NI Act of sending a statutory notice has not been satisfied in the^prcsentcase. Therefore, no cause of action arose in favour of the respondent/complainant to file the subject complaint.^Hc, therefore, could not have institutcd the complaint nor the trial court could havc taken cognizance of the offence and issued process against the petitioncr."

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He further relied on the^judgment of this Court in K. Ashok

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Kumar Goud v. Sree Ranrulu and anothers on the aspect that^the complainant failed to establish his source of^income to lend the amount of Rs.4,50,000/-.

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4 2022 SCC Online J&K 540

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5 zorz 1ty .n lr 1cnt.) 320 (s.8.)

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Dt.GRR.J CtIRC No-lt)l ol:trl)

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T'he learned counsel for thc respondent-complainant^submitted that both the trial couft^{as well as the} appellate^{coudon consideringthe} evidence on record and^{the defence} taken^{by the accusedhad passed} reasoned orders. The^{concuirent findings of'the courtsbelow wouldnot} need any interference by this^{court in the revisionand prayed to dismiss} the revision case.^{He relied upon the judgmentof the High Court of} Kerala in P. Sasidharan^{v. Selvaraj6and of the judgmentof the Hon'ble} Apex Court in Rohitbhai JivanlalPatel^{v. State of Gujarat and Anr.7}

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Now the point for consideration^is:

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Whether the orders of the. courts^{below are in accordance with} law and need any interference by^{this courl?}

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POINT:

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Section 138 of NI^{Act reads as follows:}

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"13E. Dishonour of cheque^{for insufficiency,etc.,of funds in} the account--Where any^{chequedrawn by a person onan} account maintained by him^{with a bankerfor paymentof any} amount ofmoney to^{another personfrom out ofthat accountfor} the discharge, in^{wholeor in part, ofany debtor otherliability,} is retumed by the bank^{unpaid, eitherbecauseof the amountof} money standing to the credit^{of that account is insufficientto} honour the cheque or that^{it exceedsthe amount arranged to be} paid frorn that account by an agreement^{madewith that bank,} such^person shall be^{deemed to havecommittedan offenccand} shall, rvithout^prejudice to^{anyother provisionsof this Act,be} punished with imprisonment for^{a temr} which^{may be extended} to two years, or with fine^{which niay extend to twicethe} amount ofthe cheque, or with^both:

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6 Law Finder Doc Id # f357270

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? 2019 Lawsuit (sc) 820

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I, GRR../ t.tl R<- .. 1t)r tt:t)t)

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Provided that nothing contained iu this section shall apply unIess--

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(a) the cheque has been presented to thc bank rvithin a pcriod of six months fiom thc datc on which it is drarvn or r.vithin the period of its vatidity, whicltever is carlicr;

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(b) thc payce or thc holdcr in due coursc ol thc chcquc, as thc case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawcr of the cheque, within thirty days of the receipt of information by him from the bank regarding the retum ofthe cheque as unpaidi and

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(c) the drawcr of such cheque fails to make the payrnent of the said arnount of money to the^payee or, as the case may be, to the holder in due course of thts chequc, within fiftccn days of the receipt of the said noticc.

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Explanation.--For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability."

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The accused took up a defence totally denying the execution of Ex.P.l and issuance of Exs.P2 and P3 cheques and that he was not residing in the address as mentioned in Ex.Pl or the notice sent to him under Exs.P7 and P8. Exs.P7 and P8 were sent to the address of the accused as mentioned in Ex.P I .

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The trial court on observing that Ex.P. I document was executed on 07.11.2008 and the accused mentioned his address as 16-27051914 situated at New Matakpet, and that the accused failed to state where he was residing at the time of executing the said document and Ex.Dl was issued in the year 2009 and Ex.Dl did not contain the date and

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D,(;RR,J 9 C'lRC:toll|ot)0lJ

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signature ol the person who issued it and^{when it was issued, had not} believed Ex.Dl to consider that the accused^{residedin the said address at} the time of executing Ex.P l.^The trial^{Courlobservedthat the reliance} placed by the accused on Ex.Dl was an afterthought to^{avoid the legally} enforceable debt

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The trial court discussed in^{detailabout the othermaterial} papers filed by the complainant to show that the accused^{was residing} along with his father at New^{Malakpet, at the time of executionof Ex.Pl.} It discussed that Ex.P9 and P10 statements^{of account of the accused from} 01.09.2006 to 31.03.2007 and^{the payment of annual maintenance fee} dated 11.08.2008 would disclose^{that as on the date ofopeningofhisbank} account in DCB, the accused^{had shown hisaddressas 16-2-7051414,New} Malakpet, which was the address^{given by him in Ex.Pl. Ex.Pllthe} memorandum of deposit of title^{deed documentwould disclose that the} father of the accused deposited^{his title deeds to secure the loan borrowed} by the accused for setting up a^{Cool Drinksand Snacks shop and the} address specified in the^{mortgage deed was H.No.l6-2-705/914lA,} considered that the accused deliberately^{furnished his addressas in Ex.Pl} and thereafter could have obtained^{Ex.Dl as an afterthoughtto avoid} legal ly enforceable debt,

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l0 l)t⁽ⁱ RR../ (il-R C .lttl ot:I)l:

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19.^-l hc trial court also observed that the evideuce^{of PW.2would} disclose that the account bearing No.07611300023630^{belongedto the} accused and the cheques under Exs.P2 and P3 were^{perlainingto thc} accused. The account was opened on 16.09.2006 and^was closed by thc accused on 29.10.2008 and after closure of the account, executed Ex.Pl on 07.11.2008 and obtained hand loan from the complainant on the said^date and issued two posted cheques under Exs.P2 and P3 dated^{20.11.2008and} 15.12.2008 after closing his account, oirly to avoid the^{legally enforceable} debt. The trial Court held that the accused with^{a malafideintention} obtained loan from the complainant and issued the cheques^{without any} amount to avoid palment.

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As the accused had not denied his signatures on Exs.P2 and^P3, the trial court compared the signatures of the accused^{on Exs.P2 and P3} with that of Ex.Pl and opined that Ex.Pl^was executed by^{the accused.} The trial court also brushed aside the defence taken by the accused^{that the} complainant had no capacity to lend the amount of^{Rs.4,50,000/- to the} accused and placed reliance upon the^judgment of this Court in^M. Vidyavathi v. Chandraiah @ Chandrababu and anotherE, wherein it was held that capacity to lend the amount is not an ingredient for the

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E zolo (t) rrLl (crt.) 347 (AP)

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I' ORR.I (tlRa .\, llllot:ttl5

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off-ence punishable U/Sec. Ii8 of^the Ncgotiablc^{InstrurnentsAct and that} the complainant had no^{necessityto establish his financial capacity}

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The Hon'ble Apex Court in^{Rangappa'scase (2 supra)held} that the presumption mandated by Section^{139 of NI Act includesa} presumption that there existed a^{legally enforceabledebt or liability.} Section 139 of NI^{Act is an example of a reverseonus clause that has been} included in furtherance of the^{legis.lativeobjective of improvingthe} credibility of Negotiable Instruments.^{While Section 138 of NI Act} specified a strong criminal remedy^{in relation to the dishonourof cheques,} the rebuttal presumption under^{Section 139 is a device to preventundue} delay in the course of^{litigation. It was held that:}

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*21. Section 139 of the Act is an example of a reverse onus clause that has been included^{in furtherance of the legislative} objective of improving^{the credibility of negotiable instruments.} While Section 138 of the Act^{specifies a strong criminal} remedy in relation to the^{dishonourof cheques,the rebuttable} presumption under Section 139 is a device^{to preventundue} delay in the course of^{litigation.However,itmust be} rernernbered that the offence^{madepunishableby Section} 138 can be better described^{as a regulatory offence since the} bouncing of a^cheque is^{largely in the nature of a civil wrong} whose impact is usually^{confinedto the privatepartiesinvolved} in commercial transactions. In^{such a scenario, the test of} proportionality should^{guide the constructionand interpretation} of reverse onus clauses and^{the accused/deiendantcannotbe} expected to discharge^{an unduly high standard ofproof.}

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In the absence of^{compellingjustifications,reverse onus} clauses usually impose^{an evidentiary burdenand nota} persuasive burden. Keeping this in^{view,it is a settledposition}

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that whcn an accused has to rebut the^presulnption undcr Section 139, the standard of plool lilr doing^{so is that of} 'preponderance of probabilities'. 'fhcrcfore, if thc accuscd is able to raisc a probable defence which crcates dorthts^aboutthc cxistcnce ol'a legally cnforceable dcbt or liability,^thc prosecution can fail. As clarified in thc citations, thc accused can rely on the matcrials submitted by the complainant in^order to raise such a defence and it is conceivable that in sonte cascs the accused may not need to adduce evidence of^his/hcr own."

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But, the accused failed to rebut the presumption by raising^any probablc defencc. He failed to explain how the chequcs issued^{by the} Bank to hirn went into the hands of the complainant.^{Hence the trial Court} had rightly taken the aid of the^{presumptions under Section 118 and139 of} NI Act to consider that the accused issued Exs.P2^{and P3 chequesto} discharge the legally enforceabl€ debt. The trial court^alsorightly considered that the accused resided in the address^{mentionedunder Ex.Pl} along with his father at the New Malakpet^house by^{placing reliance on} Exs.P9, Pl0 and Pl1 and considered that the^{notice was sent to the correct} address of the accused as mentioned by^{him in Ex.P1and hence had taken} the aid of the presumptions under Section²⁷ of^{the GeneralClausesAct} and Section 114 of the Evidence Act to^{consider that there was proper} service of notice.

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The appellate court also on re-appreciating the evidence observed that the legal notice was sent to the correct address of the accused

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llrGRR.J 1l ('.t RC No l0i Lf)t)la

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and it was not known^{when Ex.Dl was issued; when the accusedhimself} furnished his address^{at New Malakpet by executing the trndeftakingletter} Ex.Pl,hecouldnotStatecontrarytohisundertakingletter;theaccused though alleged that^{he did not execute the promissorynote, undenaking} andthecheques,hadnottakenanyStepstogetthemexaminedthroughan expert; when legal notice was^{issued,lie took up a false plea statingthat he} was staying at Shamirpet^{Mandal. is s'.rch,upheldthe judgmentpassedby} the VI Special Magistrate,^Cyberabad.

¶89

The leamed counsel^{for the lespondent-complainantreliedupon}

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the^judgment of^{the Hon'bleApex Court in RohitbhaiJivanlal Patel's} case (7 supra),^{wherein it was heldthat:}

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"17. In the case at hand,^{evcn after purportedly drawingthe} presumption under Section^{t 3ii of the NI Act, the TrialCourt} proceedid to question^{the wallt of evidence on the part of the} iomplainant ai^{regardsthe sotlrceof fundsfor advancingloan} to the accused^{andwant of exan.rinationof relevantwitnesses} who allegedly extended^{him rnoney for advancing it to the} accused. this approach^{of the Trial Courthad been at variance} with the principles of^{presumption in [aw. Aftersuch} presumption, the onus shifted^{to theaccused andunlessthe} u""ut"d hud discharged^{the onusby bringing on recordsuch} facts and circumstances^{as to showthe preponderanceof} probabilities titting in his^{favour, any doubt on the} complainant's case coukl^{not have been raisedlor want ol} evidence regarding the^{source of fundsfor advancing loan to} the accused--appetlant.^{The aspcct relevantfor considerationhad} been as to wheiher^{the accused-appellanthas brought on record} such facts/material/^{circumstances which could be of a} reasonably^{probable defence."}

¶92

Dr0RR..1 1^,:r {ilRt Nn 101of:0lJ

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,il?

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In this case also, thc accused^{faited to dischargehis burden by} bringing on record the material^{evidenceto tilt the preponderanceof} probabilities in his favour. As such,^{this Courtdoesnot find any merit in} the contentioti of the leamed counsel^{for the revisionpetitioner-acctrsed to} set aside the well reasoned^{judgrnents of the courtsbelow passed in} accordance with^1aw.

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In the result, the Criminai^{R:r'isionCaseis dismissed confirming} the^judgment dated^{18.12.2014passedin Criminal Appeal No.704 of 2012} on the file of Additional^{MetropolitanSessions Judge, Cyberabad,Ranga} Reddy District.^The bail^{granted io the petitioner-accusedshall stand} cancelled. The petitioner-u""rr".i^{,s directedto surrenderbefore the triat} court forthwith and^{in case he faiis to do so, the trial courtis directedto} take steps in accordance^{with larv tc take him into custody'}

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Pending miscellaneous^{petitions, ifany, shallstandclosed'}

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Sd/.A.V. S.S.C.S.M.SARMA DEPUTY REGISTRAR

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NOTE: That the typographical error occuned in wrongly reading the name of the counsel for Respondent No. 2 in the order daled 14.09.2022 in Crl.R.C.No.103 of 2015 is conected.

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This amended order shall substitute the earlier order which has already been dispatched on 06-01 .2023.

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Sd/.AV.S.S.C.S.M.SARMA DEPUTY REGISTRAR //TRUE COPY// L-lj) SECTION OFFICER

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