TaxTMI 
TaxTMI 
2017 (9) TMI 1564
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....rg, Delhi in favour of the appellant. This cheque was dishonoured for the reason "Funds Insufficient" vide memo dated 28.12.2011. The appellant served a legal notice dated 16.01.2012 upon the respondent by speed post/courier under Section 138 of the NI Act. However, no payment was made by the respondent which led the appellant to file the present complaint. 4. The Trial Court acquitted the respondent as it found that the cheque in question was issued as security at the time of entering into the loan agreement dated 01.04.2011. 5. Learned counsel for the appellant contended that a case where a cheque given as security is subsequently dishonoured would be covered under Section 138 of the NI Act. He relied heavily on the judgment by Single Bench of this Court in Credential Leasing & Credits LTs. Vs Shruti Investments & Anr. 2015 (151) DRJ 147 where it was held as under:- "30. Thus, I am of the considered view that there is no merit in the legal submission of the respondent accused that only on account of the fact that the cheque in question was issued as security in respect of a contingent liability, the complaint under Section 138 of the NI Act would not be maintainable. At ....
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....nd therefore the provisions of Section 138 of the NI Act are not attracted as rightly held by the Trial Court. 11. I have heard the learned counsel for the parties and gone through the record of the case. 12. It is not in dispute that the respondent had taken loan from the appellant, what is in dispute is the amount which was advanced as loan to the respondent and consequently what was the outstanding amount. The appellant contended that as per the loan agreement dated 01.04.2011, he advanced a loan amount of Rs. 2,00,000/- whereas the respondent contended that only a loan of Rs. 1,76,000/- was advanced to him by the appellant. 13. It is important at this juncture to refer to Section 118 and 139 of the NI Act:- "118. Presumptions as to negotiable instruments Until the contrary is proved, the following presumption shall be made:- (a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, end rsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration; (b) as to date - that every negotiable instrument bearing a date was made or drawn ....
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....deration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist. We find ourselves in the close proximity of the view expressed by the Full Benches of the Rajasthan High Court and the Andhra Pradesh High Court in this regard." (emphasis supplied) 15. It is clear after going through Sections 139 and 118 of the NI Act and the judgments of the Hon'ble Supreme Court in Bharat Barrel's case (supra) that once the factual basis for raising the presumption under Sections 139 and 118 of the NI Act have been satisfied, a Court is bound to draw the presumption of law. This presumption is rebuttable by the accused as has been stated in Bharat Barrel's case (supra) by either bringing on record such evidence which would make a reasonable and prudent person believe the existence of such liability to be improbable or illegal or by relying on the evidence produced by the complainant itself. 16. The appellant has relied upon the Loan Agreement dated 01.04.2011 Ex.CW1/F and for the disposal of this appeal it is important and rel....
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....s cross-examination deposed that he advanced a loan to the respondent by cheque for Rs. 1,76,000 and by cash Rs. 24,000/-. The respondent had testified that he had taken a loan of Rs. 1,76,000/- only by way of cheque from the complainant. The testimony of the appellant in his cross-examination is in contradiction to the loan agreement where it is mentioned that the respondent acknowledged that he had received a sum of Rs. 2,00,000/-. Loan Agreement itself contains contradictory facts. In a Para it is mentioned that a loan of Rs. 2,00,000/- was given to the respondent, which was acknowledged by him. In another para it is mentioned that loan amount of Rs. 2,00,000/- includes interest @ 2% per month. The testimony of the complainant in his cross-examination is also contradictory to the stand taken by the complainant in his complaint where he pleaded that he had advanced a sum of Rs. 2,00,000/- to the respondent. He did not plead in the complaint that he advanced Rs. 1,76,000/- by cheque and Rs. 24,000/- by cash or that Rs. 2 lacs is inclusive of interest portion. 19. As has been laid down in Bharat Barrel's case (supra), the respondent can rebut the presumption under Sections 139 a....