THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY CRIMINAL APPEAL No.1239 of 2005 ORDER: This appeal is directed against order dated 09.06.2005 in C.C.No.100 of 2003 on the file of the Additional Junior Civil Judge, Mangalagiri. First respondent herein was found not guilty of the offence under Section 138 of the Negotiable Instruments Act, 1881 (‘N.I. Act’ for short), and was acquitted under Section 255(1) Cr.P.C. Heard the learned counsel for the appellant and none appeared for the first respondent. The appellant herein filed a complaint against the first respondent alleging as follows:- The accused borrowed a sum of Rs.35,000/- from the complainant for family expenses and executed a promissory note in favour of the complainant on 05.04.2001 agreeing to repay the same with interest at 24% p.a. Subsequently after repeated demands, the accused issued a cheque on 27.02.2003 for Rs.51,000/- drawn on Chaitanya Grameena Bank, Mangalagiri branch, to the complainant and when the cheque was produced for encashment, it was returned dishonoured on 04.03.2003 on the ground of insufficient funds. Thereafter on 06.03.2003, the complainant got issued a notice and the same was returned unserved with an endorsement that the accused was on leave. The accused appeared before the trial Court and pleaded not guilty. In support of his case, the appellant/complainant examined himself as P.W.1 and also other witnesses - P.Ws.2 and 3, and marked Ex.P1 – cheque dated 27.02.2003, Ex.P2 - memo dated 28.02.2003 issued by Chaitanya Grameena Bank, Mangalagir, Ex.P3 - memo dated 04.10.2004 issued by Andhra Bank, Mangalagiri, Ex.P4 - office copy of registered notice dated 06.03.2003 and Ex.P5 - returned registered notice. The accused did not adduce any oral or documentary evidence. On consideration of the material available on record, the learned Magistrate found the first respondent/accused not guilty on the ground that the complainant failed to establish that there was a legally enforceable debt due by the accused and also holding that there was no valid service of the statutory notice on the accused. Aggrieved by the said order, the present appeal is filed by the complainant. The accused categorically denied that he borrowed any amount nor executed a promissory note in favour of the complainant. The complainant has not chosen to file the promissory note and there was no explanation for non-production of the said promissory note before the trial Court. As rightly observed by the learned Magistrate, even if the complainant has filed any civil suit on the basis of any promissory note, nothing prevented him from taking any steps to cause production of the said document through the Court especially when the accused denied the borrowal and execution of the promissory note. The complainant has also not examined any person connected with the alleged transaction of borrowal and execution of the promissory note. Admittedly the accused was stranger to the complainant and even according to the complainant, the accused was introduced to him by one Subhani and Ramayya and on their word, he lent the amount. Neither the said Subhani nor Ramayya is examined. No doubt Section 139 of N.I. Act contains a presumption that the holder of a cheque received the same for discharge of a debt, but the said presumption is rebuttable. Initially burden lies on the complainant to establish that there exists liability on the part of the accused. Once the burden is duly established, then the presumption under Section 139 of N.I. Act swings into operation to the effect that the cheque issued is in discharge of the said liability. The complainant has miserably failed to establish that there was any liability on the part of the accused towards the complainant and the cheque - Ex.P1 was issued in that connection. The presumption under Section 139 of N.I. Act cannot, therefore, be drawn in favour of the complainant in the present case. Learned counsel for the appellant/complainant would submit that on 20.03.2004, the accused agreed before the trial Court to pay Rs.50,000/- in full and final settlement of the claim and a part payment of Rs.5,000/- was also made in that regard, as can be seen from the docket proceedings on 20.03.2004. In fact, even in the course of examination under Section 313 Cr.P.C. also the accused has stated that he would enter into compromise if fifteen days’ time is given. The fact that the accused wanted to settle the matter outside the Court does not absolve the complainant of his obligation to discharge the initial burden of showing that there was legally enforceable debt due by the accused, when the matter is contested there being no compromise. Under the above circumstances, it must be held that the trial Court on proper appreciation of the material on record, rightly held that the complainant failed to prove that there was legally enforceable debt at the time of issuance of cheque. Secondly the notice issued by the complainant under Ex.P-4 has not been admittedly served on the accused. Ex.P-5 - returned unserved notice would show that the accused was on leave continuously. It is not the case where the notice was returned as refused or not claimed. When the accused, who was working as postal employee, was on leave continuously, the notice was rightly returned by the postal authorities with due endorsement. There was nothing on record to show that the accused was very much available and still he managed to not receive the notice. Admittedly, no notice was issued to the residential address of the accused. It was addressed only to his official address and as he was on leave, the same could not be served. Nothing prevented the complainant to issue a second notice after accused returned from the leave and rejoined the duty, either to his residential or official address. But the complainant has not taken any steps. It is well settled that notice under Section 138 of N.I. Act is mandatory as otherwise the cause of action for the complainant for filing the complaint would not arise at all. In the present case, there being admittedly no service of notice on the accused, it must be held that the complainant had no cause of action to file the complaint and the ingredients of the offence under Section 138 of N.I. Act are not attracted. On this ground also the complaint is not maintainable. Under the circumstances, it is held that the impugned order of acquittal passed by the learned Magistrate on proper appreciation of evidence on record duly applying the principles of law governing the field is held not liable to be interfered with. In the result, the Criminal Appeal is dismissed. __________________ G.V.SEETHAPATHY, J Date: 14.10.2009 GHN