THE HONOURABLE SRI JUSTICE K.C.BHANU CRIMINAL APPEAL No.293 of 2002 JUDGMENT: This Criminal Appeal, filed under Sections 378 of the Code of Criminal Procedure, 1973, is directed against the judgment, dated 08.10.2001, passed in C.C.No.256 of 2000 on the file of the V Metropolitan Magistrate, Visakhapatnam, whereunder and whereby the respondent No.1-sole accused was found not guilty of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for brevity ‘the Act’). 2. The brief facts of the case that are necessary for disposal of this Criminal Appeal may be stated as under: - The accused borrowed a sum of Rs.2,00,000/- from the complainant on 07.08.1997 agreeing to repay the same with interest at the rate of 30% per annum; that the complainant paid the consideration through a cheque bearing No.323269 drawn on Andhra Bank, Dabagardens, Visakhapatnam; that when the complainant demanded the accused to repay the said amount, the accused paid an amount of Rs.50,000/- in the year 1999, and later, on 21.02.2000, the accused issued a cheque for a sum of Rs.3,00,000/- as part payment towards discharge of the said debt; that when the cheque was presented for collection, it was returned with an endorsement “insufficient funds” and that thereafter, the complainant got issued a statutory legal notice to the accused which was returned unserved with an endorsement “continuously absent”. Therefore, a complaint is lodged by the complainant against the accused. 3. When the accused was examined under Section 251 Cr.P.C. for the offence punishable under Section 138 of the Act, he denied the offence and pleaded not guilty and claimed to be tried. 4. In order to substantiate the case, on behalf of the complainant P.Ws.1 to 3 were examined and Exs.P-1 to P.10 were marked. On behalf of the accused, neither oral nor documentary evidence was adduced. 5. The trial Court after considering the evidence on record came to the conclusion that the cheque amount is greater than the amount due to the complainant and as such, entertained a doubt as regards the issuance of the cheque in question in discharge of the debt due to the complainant and accordingly, acquitted the accused. Challenging the same, the present appeal is filed. 6. Now, the point for determination is whether the complainant had proved his case beyond all reasonable doubt against the accused for the offence punishable under Section 138 of the Act? 7. Learned counsel appearing for the appellant- complainant contended that by miscalculating the interest, the trial Court came to a wrong conclusion; that if the interest is calculated as mentioned in the promissory note as well as in the evidence of P.W-1, it would clearly go to show that by the date of issuing the cheque in question by the accused, it was more than Rs.3,00,000/-; that it is the specific case of the complainant that the cheque in question was given towards part payment of the debt due to him; that the address of the accused mentioned on the registered notice is not shown to be incorrect and as the accused was continuously absent in the office address, the trial Court held that it was a deemed service; and that the evidence of P.W-1 would clearly go to show that the cheque in question was given for legally enforceable debt and therefore, he prayed to set aside the impugned judgment and convict the accused. 8. On the other hand, learned counsel appearing for the first respondent-accused contended that there was no proper service on the accused, as required under Section 138 of the Act; that when the complainant admitted that the accused had been residing at Srikakulam for the last four years prior to the date of giving his evidence, there was no scope or opportunity for the accused to receive the registered notice which was sent to his Visakhapatnam address; that the cheque in question was given for security purpose to the brother of P.W-1, who was maintaining R.K. Finance and with whom the accused was having dealings; that, on an elaborate consideration of the evidence on record, the trial Court rightly acquitted the accused, and there are no grounds to interfere with the same and therefore, he prayed to dismiss the appeal. 9. It is settled law that the accused is presumed to be innocent unless the contrary is proved. The presumption of innocence is further strengthened by the order of acquittal. Unless the finding recorded by the trial Court is shown to be perverse or contrary to law or not based upon any evidence on record or inadmissible evidence has been taken into consideration or admissible evidence is overlooked, this Court, ordinarily, would not interfere with the order of acquittal. A finding can be said to be perverse if it is not based upon the evidence at all. 10. To attract the offence under Section 138 of the Act, the necessary ingredients are that the cheque must have been issued by the accused; that it must have been presented in the bank for encashment within six months from the date of issuance; that the cheque was returned with an endorsement that it was dishonoured; that the cheque was given for a legally enforceable debt; and that a notice had been given to the accused calling upon him to pay the amount due under the said cheque. 11. There cannot be any dispute that the presumption under Section 139 of the Act cannot be drawn unless, in the first instance, the complainant must prove the initial burden that the cheque in question was given for legally enforceable debt or liability, and after discharging the initial burden only, the presumption under Section 139 of the Act can be drawn. Of course, it is a rebuttal presumption. The accused can rebut the said presumption by adducing evidence on his behalf or he can show in the evidence of the complainant that the cheque in question was not given for legally enforceable debt. It is equally well settled that mere explanation by the accused is not sufficient to discharge the said burden. He must prove it by adducing evidence on this aspect. It is pertinent to refer to the decision reported in Hiten P.Dalal V. Bratindranath Benerjee[1] wherein it is held that the obligation on the prosecution will be discharged with the help of presumption of law or fact unless the accused adduces evidence showing the reasonable possibility of non-existence of the presumed fact. 12. In the instant case, the evidence of P.W-1 would go to show that on 07.08.1997, the accused borrowed a sum of Rs.2,00,000/- from the complainant by way of account payee cheque drawn on Andhra Bank, Dabagardens, Visakhapatnam, and executed a promissory note- Ex.P-10 promising to repay the same with interest @ 30% per annum and that when the complainant demanded, the accused repaid a sum of Rs.50,000/- and thereafter, towards the discharge of the remaining debt, i.e., towards the principal and interest, on 21.02.2000, the accused issued the cheque in question for Rs.3,00,000/-. 13. One of the contentions of the learned counsel for the first respondent-accused is that there was no reference of Ex.P-10 either in the complaint lodged by the complainant or in the evidence of the complainant as P.W- 1. Admittedly, P.W-1 was recalled and further examined. At that stage, he categorically stated that the accused executed a promissory note on 07.08.1997, on which date the account payee cheque was given to the accused. The execution of Ex.P-10-promissory note is not specifically denied or disputed by the accused. Therefore, the contention that the cheque in question was given to the brother of P.W-1 in connection with the dealings between them is untenable and devoid of merits. When the amount under Ex.P-10 has been lent by the complainant to the accused by way of a cheque, it can be safely presumed that the cheque in question was given for legally enforceable debt. It is not the case of the accused that the cheque which was given by P.W-1 on 07.08.1997 was not encashed by him. Further more, Ex.P-7-ledger copy would go to show that an amount of Rs.2,00,000/- has been paid to Jagannadha Rao. When the said fact has been stated by P.W-2, the same is not denied or disputed by the accused, and so, it can be presumed that the said fact is admitted by the accused. Therefore, basing on the evidence on record, it is clear that the accused received a sum of Rs.2,00,000/- from the complainant on 07.08.1997 by way of a cheque drawn on Andhra Bank and the said cheque was encashed by him. 14. Now, the question is whether the cheque was given by the accused to the complainant for discharge of the legally enforceable debt? 15. The trial Court observed that the interest payable by the accused is Rs.4,500/- per month, which is to be paid from August, 1997 to February, 2000 i.e., for 30 months, and so, the interest works out to Rs.1,35,000/-; it is admitted that the accused paid Rs.50,000/- to the complainant and therefore, the accused fell due a sum of Rs.85,000/- towards interest and Rs.2,00,000/- towards principal, totally Rs.2,85,000/-, but, the cheque in question was issued for Rs.3,00,000/-. Hence, on the ground that the amount under the cheque in question is greater than the amount due to the complainant, the trial Court acquitted the accused. 16. This is totally a wrong calculation by the trial Court. If 30% interest is calculated on Rs.2,00,000/-, it comes to Rs.5,000/- per month and for 30 months it works out to Rs.1,50,000/-. Therefore, the amount due by the accused as on February, 2000 is Rs.3,50,000/-. If the amount of Rs.50,000/-, admittedly paid by the accused, is deducted from the said amount of Rs.3,00,000/-, the accused was due a sum of Rs.3,00,000/- to the complainant. There was allegation that the accused issued a cheque towards part payment. Therefore, as on the date of giving of the cheque, the amount due is Rs.3,00,000/-, whereas the cheque in question was given for the same amount. Therefore, by miscalculating the interest, the trial Court gave a perverse finding which is liable to be set aside. 17. When P.W-1 discharged his initial burden that the cheque in question was given towards discharge of legally enforceable debt, the burden shifts on to the accused, to rebut the same. The accused has not adduced any evidence to show that the cheque in question was given for security purpose. For discharging the burden, the accused need not necessarily come to the witness box, but he can as well elicit in the evidence of the complainant or other witnesses examined on behalf of the complainant to prove his defence. Except giving suggestions that the cheque was given towards security nothing has been elicited to show that the cheque in question was given to the brother of P.W-1 with regard to the transactions between the accused and the brother of P.W-1 relating to R.K. Finances. Therefore, the accused has not satisfactorily discharged his burden. Therefore, the presumption under Section 139 of the Act that the cheque in question was issued for the legally enforceable debt or liability can be drawn. 18. The next contention of the learned counsel for the first respondent-accused is that there was no proper service of the statutory notice as required under Section 138 of the Act. The basis for his argument is the admission made by P.W-1 in his evidence that the accused has been residing at Srikakulam for the last four years prior to the date of his giving evidence, and therefore, there was no scope or possibility for the accused to be present at his office at Visakhapatnam, to which address the notice was sent. 19. Learned counsel for the first respondent relied upon the decisions reported in Sridhar V. Metalloy N.Steel Corpn[2], Shashi Finance Corporation V. Super Shine Abrasives (P) Ltd, Hyd[3], K.Annaji Rao V. N.Krishna Raju Sekhar and another[4] and M.D.Thomas V. P.S.Jaleel and another[5] and contended that there was no proper service of notice on the accused. 20. Section 27 of the General Clauses Act, 1897 defines the meaning of service by post, which reads as under: - “Where any (Central Act) or Regulations made after the commencement of this Act authorizes 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 contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.” 21. So, the above provision makes it clear that the service will be deemed to be effected by properly addressing, prepaying and posting by registered post. 22. The purpose of giving notice under Section 138 of the Act is to give an opportunity to the accused to pay the amount due to the complainant. It is a mandatory provision which has to be complied with. 23. There is evidence on record to show that notice has been sent to the correct address of the accused. The endorsement made by postal authorities is that he was continuously absent. It is not the case of the accused that the address mentioned on Ex.P-5-cover is incorrect. P.W-1 also filed postal receipt –Ex.P-4 to show that a notice has been issued. Therefore, in those circumstances, the burden shifts on the accused to show that the address mentioned in Ex.P-5 is incorrect by adducing any evidence. 24. Learned counsel for the appellant relied upon a decision of the Supreme court reported in C.C.Alavi Haji V. Palapetty Muhammed[6], wherein it is held at para-14 as under: - Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This Court has already held that when a notice is sent by registered post and is returned with a postal endorsement “refused” or “not available in the house” or “house locked” or “shop closed” or “addressee not in station”, due service has to be presumed. (vide Jagdish Singh Vs. Natthu Singh; State of M.P. Vs. Hiralal and Ors. And V.Raja Kumari Vs. P.Subbarama Naidu and Anr.). It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved. 25. Therefore, from the above decision, it is to be held that the service of statutory notice shall deemed to have effected on the accused. 26. For the foregoing reasons, it can be said that the complainant had proved his case beyond all reasonable doubt against the accused for the offence punishable under Section 138 of the Act and accordingly, the impugned judgment is liable to be set aside. 27. In the result, the Criminal Appeal is allowed, setting aside the judgment, 08.10.2001, passed in C.C.No.256 of 2000 on the file of the V Metropolitan Magistrate, Visakhapatnam. The first respondent- accused is found guilty of the offence punishable under Section 138 of the Act and he is sentenced to pay a compensation of Rs.6,00,000/- to the complainant within a period of six months from today, failing which, he shall undergo simple imprisonment for a period of six months. _____________________ JUSTICE K.C.BHANU 08th February 2010 dr [1] AIR 2001 SC 3897 [2] (2000)1 SCC 397 [3] 2003 (2) ALD (Crl) 634 (AP) [4] 2004 Crl.L.J.2911 [5] 2009 (14) SCC 398 [6] 2007 (TLS) 44149