TaxTMI 
TaxTMI 
2017 (8) TMI 1078
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....he respondent towards the discharge of the liability against the aforesaid family loan. The cheque in question of Rs. 3 lakhs, i.e. the balance amount, when presented before the bank by the appellant, was dishonoured because of insufficiency of funds. A legal notice dated 15.04.2009 was sent through registered A.D post and UPC on 17.04.2009. Since no payment was made by the respondent, the subject complaint was lodged by the appellant. 3. The Trial Court, on perusal of the deposition of the witnesses and the records of the case, was of the view that there was existence of an enforceable debt, in discharge of which the subject cheque was issued by the respondent which was dishonoured. The respondent was held guilty under Section 138 of the Negotiable Instruments vide judgment dated 08.09.2016 referred to above and by order dated 01.10.2016, he was sentenced to undergo SI for six months, to pay a compensation of Rs. 3,00,000/- (Rs.3 lakhs) and in default of which to further undergo SI for six months. 4. Before the lower Appellate Court, it was argued on behalf of the respondent that in the complaint, the appellant had talked about giving family loan of Rs. 5 lakhs to the respon....
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..... On the contrary, the plea of the respondent is that he had come into contact with the husband of the complainant sometimes in the year 2007-2008 and because of the proximity which had developed between them, the respondent had paid a substantial amount at different times to the husband of the complainant on demand for the purpose of B.Ed education of the appellant/complainant. In his 313 statement, the respondent has stated that the complaint was lodged with regard to missing of leaves of cheque book which contained the subject cheque also. 9. It would now be necessary to analyze the statement of the appellant/complainant. In the complaint, it has been averred that she had given a family loan of Rs. 5 lakhs to the respondent and out of the aforesaid amount, Rs. 2 lakhs had been returned to her. The cheque was only issued with respect to the balance amount of Rs. 3 lakhs. During the cross examination, however, a different stand was taken by the appellant/complainant and it was deposed that the appellant wanted to purchase a flat from the respondent and the money was given by her for the aforesaid purpose. She has further stated that the total cost of the flat was Rs. 5 lakhs. S....
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....for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for 1[a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of *six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such chequ....
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....appa vs. Mohan, AIR 2010 SC 1898, the Supreme Court has very succinctly laid down as follows:- "14. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. 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 dishonour of cheques, the rebuttable presum....