JUDGMENT 1. This Criminal Revision Petition filed under Sec. 397 and 401 of the Cr.P.C, is by the accused challenging his conviction and sentence imposed by the trial Court in CC.No.601/2017 for the offence punishable under Sec. 138 of N.I.Act, which came to be confirmed by the Sessions Court in Crl.A.No.51/2021. The trial Court sentenced the accused to pay fine of Rs.6.00 lakhs in default to undergo simple imprisonment for six months. Out of the fine amount realized, the trial Court has directed that Rs.5, 95, 000.00 to be paid to the complainant by way of compensation. 2. For the sake of convenience, the parties are referred to by their rank before the trial Court. 3. Complainant filed a private complaint under Sec. 200 Cr.P.C against the accused, alleging offence punishable under Sec. 138 of N.I. Act, contending that he and accused are well known to each other. On 11/7/2017, accused for the purpose of repaying loan taken for construction of his house requested for loan of Rs.5.00 lakhs. Complainant agreed for the same and on the same day advanced loan of Rs.5.00 lakhs. In this regard accused executed a demand Promissory Note-cumConsideration Receipt, agreeing to repay the same with interest at 2% p.a. 3.1 On the next day that is on 12/7/2017, accused issued a cheque for Rs.5.00 lakhs with a direction to present it on 18/9/2017. Accordingly on 18/9/2017, complainant presented it through Corporation Bank, Arasikere branch. However, it was dishonoured on the ground "Funds insufficient". The complainant brought this fact to the notice of the accused. He did not make any arrangement for paying the amount due. Therefore, on 22/9/2017, complainant got issued a legal notice to the accused calling upon him to pay the amount due. Despite due service of the notice, the accused has neither chosen to pay the amount nor sent any reply. Without any alternative complaint is filed. 4. Accused appeared before the trial Court and contested the matter. Though he admits that the cheque in question belongs to him drawn on his account maintained with his banker and it bears his signatures, he has disputed that he borrowed hand loan of Rs.5.00lakhs and executed demand Promissory Note-cumConsideration Receipt on 11/7/2017 and on the next date he had issued the cheque in question towards repayment of the said loan. Though he admits that the cheque in question belongs to him drawn on his account maintained with his banker and it bears his signatures, he has disputed that he borrowed hand loan of Rs.5.00lakhs and executed demand Promissory Note-cumConsideration Receipt on 11/7/2017 and on the next date he had issued the cheque in question towards repayment of the said loan. Accused has taken up a specific defence that the son of complainant was running chit fund business and he had participated in the said chit fund transaction and issued the cheque/Demand Promissory Note and misusing the same, the complainant has filed the complaint. The accused has also contended that complainant is not having financial capacity to advance him Rs.5.00 lakhs. 5. Accused pleaded not guilty and claimed trial. 6. In order to prove the allegations against the accused, complainant has examined himself as PW-1. He has examined one witness to the demand Promissory Note as PW-2 and got marked Ex.P1 to 7. 7. During the course of his statement under Sec. 313 Cr.P.C accused has denied the incriminating evidence. 8. He has examined himself as DW-1 and relied upon Ex.D1. 9. Vide the judgment and order dtd. 11/2/2021, the trial Court convicted the accused and sentenced him to pay fine of Rs.6.00 lakhs in default to undergo simple imprisonment for six months. 10. Accused took the matter in appeal before the Sessions Court in Crl.A.No.51/2021. Vide the impugned judgment and order dtd. 7/11/2022, the Sessions Court dismissed the appeal and thereby confirmed the order of the trial Court. 11. Being aggrieved by the orders of the trial Court as well as the Sessions Court, the accused is before this Court contending that the findings of both orders are contrary to the well settled principles of law and is liable to be set aside. Both courts have failed to appreciate the fact that there was no legally enforceable debt to attract the provisions of Sec. 138 of N.I. Act. The Courts below have failed to consider the discrepancies and contradictions in the evidence of complainant. They have not appreciated the defence of accused and the fact that the complainant has failed to prove his financial capacity to lend Rs.5.00 lakhs to the accused, despite accused having rebutted the presumption and complainant having failed to prove advancing of loan as well as his capacity to lend Rs.5.00lakhs. They have not appreciated the defence of accused and the fact that the complainant has failed to prove his financial capacity to lend Rs.5.00 lakhs to the accused, despite accused having rebutted the presumption and complainant having failed to prove advancing of loan as well as his capacity to lend Rs.5.00lakhs. 11.1 Despite the trial Court coming to the conclusion that the complainant has failed to prove passing of consideration, still it has proceeded to convict the accused. The Sessions Court has also failed to appreciate the evidence placed on record in the right perspective and simply proceeded to confirm the trial Court order and prays to allow the petition, set aside the impugned judgments and orders and acquit the accused. 12. On the other hand, learned counsel for complainant has supported the impugned judgments and orders and sought for dismissal of the revision petition. 13. Heard arguments of both sides and perused on record. 14. Thus, it is the definite case of the complainant that having known the accused since long, at his request on 11/7/2017, he has advanced loan of Rs.5.00 lakhs and on the same day accused executed a demand Promissory Note-cum-Consideration receipt in the presence of witnesses and on the next day i.e., on 12/7/2017, accused issued the subject cheque towards the payment of the said loan with the direction to present it on 18/9/2017. Accordingly on 18/9/2017, when complainant presented the cheque for encashment, it was dishonoured for "Funds insufficient" and after issuing legal notice he has filed the complaint. 15. Having regard to the fact that accused admit that the cheque in question is drawn on his account maintained with his banker and it bears his signature, presumption under Ss. 118 and 139 of N.I. Act is attracted to the effect that the cheque was issued towards legally recoverable debt or liability. Therefore, the initial burden is on the accused to prove that no consideration has passed i.e, the cheque was not issued towards repayment of any legally recoverable debt or liability and the circumstances in which the cheque has reached the hands of the complainant. Only after the accused rebut the presumption, the burden shifts on the complainant to prove his case, including passing of consideration and his financial capacity to lend such huge sum of money at the relevant point of time. Only after the accused rebut the presumption, the burden shifts on the complainant to prove his case, including passing of consideration and his financial capacity to lend such huge sum of money at the relevant point of time. Of course it is sufficient for the accused to rebut the presumption by preponderance of probabilities. However, the complainant is required to discharge the burden shifted on him beyond reasonable doubt. 16. It is pertinent to note that before filing the complaint, the complainant has sent legal notice as per Ex.P4 and it is served on accused as per Ex.P5. Though the accused has denied that notice is served on him, during his cross-examination he has admitted that the address to which the legal notice is sent to him is correct. Therefore, under Sec. 27 of the General Clauses Act, it is presumed that the notice sent to his address through Registered Post is duly served on him. The signature on the acknowledgement also prima facie indicates that it is his signature. After receipt of notice, accused has not paid the amount in the cheque. Of course he has also not sent any reply disputing the allegations made in the notice. 17. As held by the Hon'ble Supreme Court in C.C.Alavi Haji Vs. Palapetty Muhammed and Anr (Alavi Haji), (2007) 6 SCC 555 . the object and purpose of issuing legal notice to the accused is to enable honest drawer of cheque to make payment within the specified time and thereby avoid prosecution. However, this is not the case with the accused. He has taken up a specific defence that the cheque in question was not issued to the complainant for repayment of any legally recoverable debt or liability. Of course by not sending reply he lost an opportunity to explain the circumstances under which the cheque has reached the hands of complainant. However, during the course of trial, he has taken up such defence, contending that he has not borrowed any loan from the complainant and in fact complainant he had no financial capacity to lend him such a huge sum of Rs.5.00 lakhs. In the light of specific case of the complainant and the defence of accused, it is necessary to examine whether the accused has rebutted the presumption and in that event whether the complainant has discharged the burden shifted on him. 18. In the light of specific case of the complainant and the defence of accused, it is necessary to examine whether the accused has rebutted the presumption and in that event whether the complainant has discharged the burden shifted on him. 18. As held by the Hon'ble Supreme Court in Tedhi Singh Vs. Narayan Dass Mahant (Tedhi Singh), (2022) 6 SCC 753. when the accused has failed to send reply to the legal notice, challenging the financial capacity of the complainant, at first instance, complainant need not prove his financial capacity. However, if during the course of trial accused takes up such defence, then it is necessary for the complainant to prove his financial capacity when he allegedly advanced the amount and towards repayment of it, the accused has issued a cheque. Keeping in mind ratio in the above said decision, it is necessary to examine whether the accused has made out justifiable grounds to interfere with the impugned judgments and orders. 19. As pleaded in the complaint, it is the definite case of the complainant that on 11/7/2017 accused requested for loan of Rs.5.00 lakhs and on the same day he paid the said amount in the presence of witnesses and obtained a demand Promissory Note-cum-Consideration receipt. On the next day i.e., on 12/7/2017, accused issued the subject cheque with a direction to present it on 18/9/2017. In his examination-in-chief also, the complainant has reiterated his case. However, during the course of his cross-examination, he has come up with a case that accused requested for loan one month prior to 11/7/2017. He had Rs.4.00 lakhs in his account and he withdrew the same and adding cash of Rs.1, 00, 000.00 which he had in his house, he paid Rs.5.00 lakhs. This statement made by the complainant during his crossexamination is required to be appreciated in the light of certain entries in his account statement at Ex.P7. As per these entries, on 19/6/2017, Rs.88, 000.00 on 20/6/2017, Rs.2, 12, 000.00 and on 21/6/2017, Rs.1, 00, 000.00 is credited to his account which comes to Rs.4.00 lakhs. 20. With regard to complainant getting these amount, he has stated that he got the sums by selling coconut. As per these entries, on 19/6/2017, Rs.88, 000.00 on 20/6/2017, Rs.2, 12, 000.00 and on 21/6/2017, Rs.1, 00, 000.00 is credited to his account which comes to Rs.4.00 lakhs. 20. With regard to complainant getting these amount, he has stated that he got the sums by selling coconut. Though the complainant has claimed that he is having agriculture land and grows vegetables and coconut, admittedly, he has not produced either the RTC or any document to show that at the relevant point of time he sold coconut and vegetables and from the same he got Rs.4.00 lakhs as detailed in the account statement. There is also no evidence to show that during this relevant point of time he was having cash in a sum of Rs.1, 00, 000.00 in his house. This is clearly an improvement made by the complainant during his crossexamination. Absolutely, there was no impediment for the complainant to plead that one month prior to 11/7/2017 accused requested for loan of Rs.5.00 lakhs and during the period of one month, he was in receipt of Rs.4.00lakhs and was able to pay the same to the accused by including cash of Rs.1, 00, 000.00 available in his house. 21. On the other hand, according to the complaint averments, on 11/7/2017 accused requested for the loan and he paid the said amount on the same day. As held in Tedhi Singh, referred to supra accused has not sent any reply to the legal notice and therefore the complainant is not expected to prove his financial capacity at the first instance. However, having regard to the fact that during the trial, accused has challenged the financial capacity of the complainant, he is expected to prove the same and the evidence to that effect should be acceptable and reliable. Since the accused has taken up a specific contention that the cheque was issued long back to the son of complainant, it appears only to create evidence, the complainant has made certain credits to his account in order to use them to prove his financial capacity. 22. Had he produced some evidence to show that he is having agricultural land, raises vegetables and coconut and was in receipt of Rs.4.00 lakhs as detailed in Ex.P7 immediately prior to 11/7/2017 and including certain cash available with him, he lent it to the accused things would be different. 22. Had he produced some evidence to show that he is having agricultural land, raises vegetables and coconut and was in receipt of Rs.4.00 lakhs as detailed in Ex.P7 immediately prior to 11/7/2017 and including certain cash available with him, he lent it to the accused things would be different. When the complainant has chosen to get a demand Promissory Note-cumConsideration Receipt and has also chosen to receive a cheque from the accused towards repayment of the loan, nothing prevented him from paying the said loan by way of cheque or demand draft which would have secured his interest, especially when he is operating an account and is in the habit of promptly crediting his receipts into his account. 23. It is pertinent to note that in the complaint as well as during the course of his evidence, the complainant has pleaded and deposed that he presented the subject cheque only once i.e., on 18/9/2017 and it was dishonoured as per the endorsement at Ex.P3. However, the account extract at Ex.P7 indicate that thrice i.e on 13/7/2017, 16/8/2017 and 20/9/2017, the complainant has presented the cheque for encashment and on all the three times, it is returned dishonoured for "Funds Insufficient". The complainant is not having any explanation as to why he presented the cheque thrice. It is not his case that he brought the fact of dishonour of cheque on the first and second occasion to the notice of the accused and on his instructions presented it on the second as well as on the third time. This also creates doubt as to the bonafides of the case of the accused. 24. Though the complainant has examined PW-2 Y.B.Nagaraju, as a witness to the demand Promissory Note-cum-Consideration Receipt at Ex.P6, his evidence is not of any help to improve the case of the complainant. As rightly observed by the trial Court, instead of helping the complainant, his evidence creates doubt as to the veracity of complainant's case. Despite making such observation, the trial Court has proceeded to accept the case of complainant by making an observation that demand Promissory Note-cum-Consideration receipt is not compulsorily a attestable document and there was no need for the complainant to examine him. However, it has failed to examine the veracity of the complainant's case in the light of his attempts made to create evidence. 25. However, it has failed to examine the veracity of the complainant's case in the light of his attempts made to create evidence. 25. The accused has stepped into the witness box and deposed that the cheque in question as well as the demand Promissory note were given to the son of complainant in connection with the chit fund business run by him and misusing the same, the complainant has filed this complaint. Of course the cross-examination of accused establish the fact that during 2013, he had taken loan of Rs.16.00 lakhs from Vijaya Bank and he is repaying the same. He has also admitted that one Marulasiddappa relative of complainant; R Ashok and S Yogesh, have also filed cheque bounce cases against him. He has admitted that in the complaint filed by Yogesh he was convicted and in the appeal he compromised with him by paying the amount due. 26. Though the cross-examination of accused indicate that for purchasing house, he took loan from the Bank and a number of complaints were filed against him for dishonour of cheques issued by him, the same would not improve the case of the complainant. It appears taking advantage of the necessity of accused, blank cheques having been taken from him and utilising one such cheque, the present complaint is filed. In the light of the cross-examination of the complainant and also through his testimony, the accused has rebutted the presumption shifting the burden on the complainant. However the complainant has failed to prove that at the relevant point of time he had the financial capacity to lend Rs.5.00 lakhs to the accused and the cheque in question was issued by the accused towards repayment of the said loan. 27. Though the demand Promissory Note state and also it is pleaded by the complainant that accused had agreed to repay the said sum along with interest at 2% p.m., there is no explanation for not making any attempts to recover the interest. Both trial Court as well as the Sessions Court has failed to appreciate the oral and documentary evidence placed on record by the complainant in the light of specific defence taken by the accused. Simply on the basis that presumption under Ss. 118 and 139 of N.I. Act, they proceeded to convict the accused. Both trial Court as well as the Sessions Court has failed to appreciate the oral and documentary evidence placed on record by the complainant in the light of specific defence taken by the accused. Simply on the basis that presumption under Ss. 118 and 139 of N.I. Act, they proceeded to convict the accused. The findings of the trial Court as well as the Sessions Court are contrary to the evidence placed on record and as such perverse. It is erroneous and calls for interference by this Court and accordingly, I pass the following: ORDER (i) The Criminal Revision Petition filed under Sec. 397 r/w 401 Cr.P.C is allowed. (ii) The impugned judgment and order dtd. 7/11/2022 in Crl.A.No.51/2021 on the file of III Addl.District and Sessions Judge, Hassan and Judgment and order dtd. 11/2/2021 in C.C.No.601/2017 on the file of Senior Civil Judge and JMFC., Arasikere, are hereby set aside. (iii) Consequently, the petitioner/accused is acquitted for the offence punishable under Sec. 138 of N.I.Act. His bail bond stand discharged. (iv) The Registry is directed to send back the trial Court records along with copy of this order forthwith.