Court dismisses appeals, cheques for consultancy fees, not loan repayment, complaint dismissed under

The court dismissed the appeals, finding that the accused successfully rebutted the presumption under Section 139 of the Negotiable Instruments Act. The court determined that the cheques were issued as security for consultancy fees, not towards loan repayment. The complainant's failure to substantiate the loan disbursement claim and the excessive amounts on the cheques resulted in the complaints being dismissed under Section 138 of the Act.

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Issues Involved:
1. Whether the cheques issued by the accused were towards the repayment of loans or as security for consultancy fees.
2. Whether the accused rebutted the presumption under Section 139 of the Negotiable Instruments Act.
3. Whether the non-reply to the statutory notice by the accused implies admission of liability.
4. Whether Section 138 of the Negotiable Instruments Act is attracted when cheques are issued as security.
5. Whether the amount filled in the cheques exceeded the actual liability of the accused.

Detailed Analysis:

1. Repayment of Loans vs. Security for Consultancy Fees:
The complainant alleged that the accused issued three cheques towards the repayment of loans. However, during the trial, the complainant's evidence shifted to the claim that the cheques were issued for consultancy fees. The accused contended that the cheques were given as security for arbitration fees, not for loan repayment. The court found the complainant's claim of loan disbursement unconvincing due to the lack of receipts and the improbability of lending large sums without documentation. The consecutive numbering of the cheques suggested they were issued simultaneously, aligning with the accused's version of events.

2. Rebuttal of Presumption under Section 139:
The court referenced the Supreme Court's decisions in *K. Bhaskaran v. Sankaran Vaidhyan Balan* and *Hiten P. Dalal v. Bratindranath Banerjee*, which state that the presumption under Section 139 places the evidential burden on the accused to prove the cheques were not for discharging any liability. The accused successfully rebutted this presumption by demonstrating that the cheques were issued as security and not for loan repayment. The court noted that the accused's evidence, including his bank balance, negated the need for borrowing.

3. Non-reply to Statutory Notice:
The complainant argued that the accused's failure to reply to the statutory notice should be taken as an admission of liability, citing *M/s. Jayam Company v. T. Ravichandran*. The court considered this silence as one of the circumstances against the accused but not conclusive evidence of liability.

4. Cheques Issued as Security and Section 138:
The court examined the applicability of Section 138 when cheques are issued as security, referencing *I.C.D.S. Ltd. v. Beemna Shabeer*. The Supreme Court held that Section 138 applies to cheques issued for any debt or liability, including security. However, the court found that the complainant failed to prove the cheques were for a crystallized liability at the time of issuance, as the consultancy fees were contingent on the arbitration award.

5. Amount Filled in Cheques Exceeding Actual Liability:
The court determined that the complainant filled in the cheques for amounts exceeding the actual liability. The accused's consultancy fees were agreed at 5% of the award amount, totaling Rs. 62,264.95, of which Rs. 10,000 had already been paid. The cheques totaling Rs. 1.90 lakhs were significantly higher than the remaining liability of Rs. 52,264.95. The court cited *M/s. Pawan Enterprises v. Satish H. Verma*, which held that Section 138 is not attracted when the cheque amount exceeds the due liability.

Conclusion:
The court dismissed the appeals, finding no merit in the complainant's case. The accused successfully rebutted the presumption under Section 139, and the cheques were issued as security rather than for an existing debt. The complainant's failure to prove the loan disbursement and the excessive cheque amounts led to the dismissal of the complaints under Section 138 of the Negotiable Instruments Act.

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