TaxTMI 
TaxTMI 
2018 (4) TMI 302
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....resented for encashment they were returned unpaid for the reasons of "Insufficiency of Funds". 3. The petitioner issued a notice of demand dated 12.09.2011. Despite delivery of the same, the respondent failed to send any reply to the said notice of demand. Consequently, the subject complaint under Section 138 of the Negotiable Instruments Act was filed. 4. By judgment dated 24.07.2015, the trial court convicted the respondent no. 1 of the offence under Section 138 of the Negotiable Instruments Act. By order on sentence, respondent no. 1 was sentenced to simple imprisonment for a period of three months and directed to pay compensation of Rs. 3.50 lakhs within two months, failing which to further undergo simple imprisonment of two months. 5. By the impugned judgment dated 26.09.2015, the appellate court set aside the order on conviction and sentence and acquitted Respondent no. 1. 6. It is contended by learned counsel for the petitioner that the appellate court erred in setting aside the order on conviction. It is contended that the appellate court erred in holding that respondent had repaid the loan or that there was a running account between the parties. It is contended....
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....erance of probabilities. Accused as per his defence has to prove the factum of payment of Rs. 2,70,000/- to the complainant. As per his examination-in-chief, accused has deposited Rs. 1.5 lakhs in the bank account of complainant, Rs. 50000/- in joint account of complainant's wife and daughter. Further, accused has stated that he has given Rs. 70,000/- in cash to the complainant through his brothers. 5. However, accused has not placed any document on record to show how and when the sum of Rs. 1,50,000/- was deposited by him in the bank account of the complainant except for two receipt for Rs. 20,000/- (in total Ex.CW1/D1 and Ex.CW1/D2). However, complainant when confronted with these receipts stated that these receipts were towards separate loan of Rs. 20,000/- which was given to the accused. Apart from this, accused has produced no proof of payment towards the complainant. Moreover, accused was confronted with statement of account of daughter and wife of complainant (Ex.CW1/2) and he stated that it is not clear which payments were made by him. 6. Accused did not produce any document nor did he summon any bank witness to prove that money was deposited by him to the bank ac....
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....(1,50,000 + 50,000 + 15,000 + 70,000/-) and more than Rs. 2,75,000/- as per his application u/s 145 (2) of Negotiable Instruments Act 1881. This continuously fluctuating stand taken by accused with respect to amount repaid by him punctures holes in his defence. 10. In wake of abovementioned discussion, all the ingredients of offence u/s 138 Negotiable Instruments stands proved against the accused. Accordingly, accused Satish Sharma is convicted of offence u/s 138 NI Act. Let accused be heard on point of sentence." 10. The appellate court while setting aside the order of conviction of the trial court held as under:- "7.1 I shall now discuss the evidence relied upon by the appellant/accused to rebut the presumption. During the cross examination of complainant (CW-1), he deposed that there was no agreement executed at the time of giving of loan. He was confronted with two receipts Ex. CW1/D-1 and Ex. CW1/D-2 dated 12.7.2011 and 25.8.2011 for the amount of Rs. 10,000/- each, deposited by the accused in his account. He volunteered that the payment was towards another loan of Rs. 20,000/-, which was advanced in May 2011. He also admitted receiving Rs. 50,000/- from the accuse....
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....mittee indicates that he has not stated the entire truth in his complaint. The onus on accused to discharge the presumption was only by way of preponderance of evidence, which he has sufficiently discharged by proving that there were transactions between them, over and above what the complainant initially pleaded. Receipt of amounts having not been explained at the first instance, a reasonable defence is created that accused had repaid the loan in part or full. Presumption having thus been rebutted, complainant cannot be absolved of his responsibility to prove the case beyond reasonable doubt. The onus having shifted back to him. I am, therefore, of the opinion that Ld. Trial Court has committed an error in holding that accused failed to rebut the presumption. 8. The defence of the appellant that the cheques in question were issued as a security in the year 2009 is supported by a study of the cheques (Ex. CWl/1 and Ex. CWl/2 ). Printed date on the body of the cheques ( Ex. CWl/1 and Ex. CWl/2 ) is Date ___/____/200___ Apparently the cheque book in question was printed and issued prior to 1.1.2010; otherwise printed date would have been Date ___/____/201___. Use of cheques issued....
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....you that you have obtained a friendly loan of Rs. 2,00,000/- each from the complainant and in respect of that friendly loan from the complainant, you issued two cheques bearing no. 926431 and 926470 both dated 01.09.2011 for a sum of Rs. 1,00,000/- each which is Ex. CW1/1 and Ex.CW1/2. These cheques were dishonoured on presentation to your banker for the reasons "Funds Insufficient" vide cheque return memo dated 01.09.2011 which is Ex. CW1/3 and Ex.CW1/4. On this a legal demand notice dated 12.09.2011 which is Ex. CW1/5 was sent to you through registered AD. Despite the service of legal demand notice, you failed to make payment within stipulated period of 15 days from receipt of the said notice. What do you have to say? Ans.1 It is incorrect. I duly replied the legal demand notice. I have already made the payment of Rs. 2,70,000/- till 25.07.2011. I owed only Rs. 7,000/- to the complainant. I had issued the aforesaid blank cheques as security to the complainant which the complainant misused. It is a false and fabricated case in which I have been wrongly implicated. I only owe Rs. 7,000/- to the complainant. 14. For the sake of completeness, it would be expedient to extract th....
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....at document Ex. CW1/D1 and Ex. CW1/D2 are not concerned with the present transaction. It is correct that the cheque Ex. CW1/2 and Ex. CW1/1 belongs to my account and bear my signatures. The contents of the cheques were not filled up by me. It is wrong to suggest that I have filled up the contents of the cheque. It is wrong to suggest that I have not taken loan from the complainant for Rs. 1 Lac on 16.03.2011. It is wrong to suggest that I had again taken a loan of Rs. 1 Lac in the month of April 2011. It is wrong to suggest that I have issued two cheques against the said loan. It is correct that the said cheque was dishonoured on 01.09.2011. It is correct that I was not having sufficient funds in my account at the time of presentation of cheque. I had asked my counsel to reply to the legal demand notice as I was out of station at the time of service of legal demand notice at my residence, but when I came back I found he had not replied the same. I do not remember the exact date when I had taken the loan from the complainant. However, it was around 2009-10. It is incorrect to suggest that I had taken loan in year 2011. I do not remember the exact date when I have made the payment....
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....d my previous counsel to send the reply. Vol. I was out of Delhi when legal notice was sent to my house. My previous counsel had told me that he has sent the reply to the legal notice which is EXCW1/5. It is correct that I have not filed any complaint against the complainant once I have received the legal notice from the complainant. It is incorrect to suggest that I have never made the payment of Rs. 2,70,000/- to the complainant. It is wrong to suggest that I had not given Rs. 70,000/- in cash to the complainant through my brother Pummy and Mr. Shailesh Sharma. Further it is wrong to suggest I have not deposited the amount of Rs. 1,50,000/- in the bank account of the complainant. Also It is wrong to suggest that I have not made the payment of Rs. 50.000/- into joint account of daughter and wife of the complainant. Further It is wrong to suggest that I have not made the payment of Rs. 15,000/- by way of cheque to the complainant. It is wrong to suggest that I had taken the sum of Rs. 1,00,000/- both in March 2011 and April 2011 from the complainant. It is wrong to suggest that I have issued two cheques in discharged of liability of abovementioned amount. It is wrong to suggest tha....