TaxTMI 
TaxTMI 
2020 (12) TMI 1008
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....of good relationship, complainant advanced the loan on assurance of the accused that he will repay the loan within a month. But the accused did not return the amount inspite of repeated request. Then the accused issued a cheque dated 21.11.2011 bearing No.339579 of State Bank of Hyderabad, Super Market, Gulbarga for a sum of Rs. 9,80,000/- to the complainant in discharge of said debt or loan. The complainant presented the said cheque for collection to bank, but it was returned dishonoured with a endorsement as "funds insufficient". On the request of accused the cheque was again presented on 07.12.2011. But again the said cheque was returned dishonored for very same reason. 04. The accused did not give proper answer to complainant in this regard, hence complainant issued legal notice dated 21.12.2011, which was returned with endorsement that the notice was refused. Therefore, complainant filed compliant against the accused for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (Hereinafter for short referred as "N.I.Act".). 05. The accused appeared. After recording plea of the accused, the complainant got examined himself as PW.1 and one witness was e....
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....ion Linkers and others, 2) 2019 CRI.L.J 3227 (SC) in the case of Bir Singh vs Mukesh Kumar, 3) 2019 (4) AKR 562 in the case of H. G. Nagaraja vs. H. Suresh Naika. With these main contentions he prayed to set-aside the acquittal judgment and convict the accused. 09. Against this learned counsel for the respondent - accused argued that there are no additional or other documents were taken by the complainant when huge amount was alleged to have been given as a loan only on the basis of cheque. The accused was a student. Why cheque was issued to him. No source of income of complainant was produced. In fact the complainant was running a chitt business wherein there were fifty members and one has to pay Rs. 1,000/- each month. On the third month itself the accused got B.C. prize money of Rs. 47,000/-. So, the cheque was issued for Rs. 50,000/- as a B.C. amount. The plot was sold by the complainant to the accused, but the amount was not given, as the possession was not handed-over. The blank cheque issued by accused was misused. There was no registered sale deed about the plot. The dispute is regarding plot but not for the cheque. When the cheque amount was given to complainant is not ....
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....the loan was advanced is not proved. So, on these grounds the learned Trial Judge come to conclusion that without proving execution of any other document as a security for the said loan, handing over loan of huge amount without interest and in violation of Section 269 (ss) of Income Tax Act, the contention of the complainant are not tenable. Hence, he acquitted the accused. In my considered view such a finding of the Trial Court is without any legal basis and contrary to the evidence on record. 14. It is settled principles of law that once the cheque is issued and signed by the accused and if it is returned dishonored stating that the amount in account is "insufficient", then there is a statutory presumption is in favour of the holder of the cheque that the cheque which was issued for enforcement of debt or liability is dishonored. The burden to rebut the presumption is on the accused. The accused can rebut such presumption either by cross-examining the complainant and showing before the Court the evidence in cross-examination probabalise the defence of the accused or the case of the complainant is not proved. Secondly, the accused can also lead defence evidence to rebut the pre....
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.... 17. Therefore, the stray sentences picked up from the evidence of complainant referred by the Trial Court will not help the accused. On the other hand it help the complainant to show that he has got sufficient income to purchase the plots to give loan out of the money which he received by selling the plots. He has got agricultural lands. The Trial Court has also wrongly appreciated the evidence of Manager of the Bank - PW.2 wherein he has stated that the complainant has not withdrawn the amount on 15.07.2011, then the accused case appears to be not true. Such a inference is not based on any material, when it is not the case of complainant that he has withdrawn the amount from the bank and given it to the accused, then the observation of Trial Court in this regard is not tenable. 18. The learned counsel for the appellant has relied upon decision of the Hon'ble Supreme Court reported in 2019 CRI.L.J 3227 (SC) in the case of Bir Singh vs Mukesh Kumar, wherein at Para Nos.36, 37, 38, 39, 40 and 41 it is held as under :- "36. The proposition of law which emerges from the judgments referred to above is that the onus to rebut the presumption under Section 139 tha....
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....difference. In this context, it would, perhaps, not be out of context to note that the fact that the respondent - accused should have given or signed blank cheque to the appellant - complainant, as claimed by the respondent - accused, shows that initially there was mutual trust and faith between them." 19. The learned counsel for the appellant has also relied upon another decision of the Hon'ble Supreme Court reported in AIR 2020 SC 945 in the case of APS Forex Services Pvt. Ltd., vs. Shakti International Fashion Linkers and others at Para No.7 it is held as under:- "7. Coming back to the facts in the present case and considering the fact that the accused has admitted the issuance of the cheques and his signature on the cheque and that the cheque in question was issued for the second time, after the earlier cheques were dishonoured and that even according to the accused some amount was due and payable, there is a presumption under Section 139 of the N.I. Act that there exists a legally enforceable debt or liability. Of course such presumption is rebuttable in nature. However, to rebut the presumption the accused was required to lead the evidence that full amount due....
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....aragraph 16 it has been observed as under:- 16. All of these circumstances led the High Court to conclude that the accused had not raised a probable defence to rebut the statutory presumption. It was held that: "6. Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant. The presumption referred to in Section 139 of the N.I. Act is a mandatory presumption and not a general presumption, but the accused is entitled to rebut the said presumption. What is required to be established by the accused in order to rebut the presumption is different from each case under given circumstances. But the fact remains that a mere plausible explanation is not expected from the accused and it must be more than a plausible explanation by way of rebuttal evidence. In other words, the defence raised by way of rebuttal evidence must be probable and capable of being accepted by the Court. The defence raised by the accused was that a blank cheque was lost by him, which was made use ....
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....been misused. The conduct of the accused also does not substantiate his case. When the presumption has been drawn under Section 139 of the N.I. Act about the legally recoverable debt and the said presumption has not been rebutted by cogent and acceptable evidence, then under such circumstances, the case of the complainant stands proved and accused is liable to be convicted under Section 138 of the N.I. Act. Without looking into the said fact the trial Court only on the basis of the contention of the accused that a huge amount has been advanced and the complainant is not having any capacity to lend such huge amount and on that count, the trial Court has acquitted the accused. But as could be seen from the cross- examination of PW1, in his evidence it has been elicited that per month he is getting a salary of Rs. 5,000/- to Rs. 15,000/- and he is working as a Cinema Representative and per day he is running four shows and he has taken the house on a lease by giving Rs. 5,00,000/- and it has also been elicited that he is having a only son and he is working in Bengaluru. All these materials even draw the attention of this Court that the complainant is having capacity to lend the said am....
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....articulars of the cheques; or washing away of the earlier cheques in the rains though the office of the complainant being on the 8th floor had also been of irrelevant factors for consideration of a probable defence of the appellant. Similarly, the factor that the complainant alleged the loan amount to be Rs. 22,50,000/- and seven cheques being of Rs. 3,00,000/- each leading to a deficit of Rs. 1,50,000/-, is not even worth consideration for the purpose of the determination of real questions involved in the matter. May be, if the total amount of cheques exceeded the alleged amount of loan, a slender doubt might have arisen, but, in the present matter, the total amount of 7 cheques is lesser than the amount of loan. Significantly, the specific amount of loan (to the tune of Rs. 22,50,000/-) was distinctly stated by the accused - appellant in the aforesaid acknowledgement dated 21.03.2017." 22. So, in the light of the above principles, if the evidence of complainant is considered and in the light of defence taken by the accused then it is crystal clear that the complainant has proved his case and an offence under Section 138 of N.I.Act against the accused is made out by the complai....
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....e and month when he has given cheque to the complainant. He has no documents to show about payment of B.C. (chitt) amount. He cannot say the date and month when the accused has given the cheque to the complainant. He has not attended any panchayat regarding cheque given by the accused in favour of the complainant. He has clearly stated he do not know anything about this case. He do not know what is amount of cheque involved in this case. So, this type of evidence of DW.2 totally falsify the defence of the accused. 25. Therefore, the findings of the learned Trial Court that the complainant has failed to prove the debt and the accused has substantiated his defence by preponderance of probability is totally illegal, perverse and not based on the evidence on record or the settled principles regarding appreciation of evidence. The decisions relied upon by the learned counsel for the accused reported in 2012 (3) KCCR 2057 in the case of Veerayya vs. G. K. Madivalar, the decision of the Hon'ble Supreme Court reported in AIR 2008 SC 1325 in the case of Krishna Janardhan Bhat vs Dattatraya G. Hegde and another decision reported in ILR 2008 KAR 4629 in the case of Shiva Murthy vs Amru....