TaxTMI 
TaxTMI 
2021 (1) TMI 438
X X X X Extracts X X X X
X X X X Extracts X X X X
....this Court. 2. Brief facts of the case are that appellant filed a private complaint under Section 200 of Code of Criminal Procedure (hereinafter referred to as 'Cr.P.C.' for short) stating that it is a transporting finance company and accused had borrowed a loan for purchase of Tata Tipper 2006 model bearing registration No.KA-35/8287 by taking loan of Rs. 14,79,100/- from appellant under loan-cum- hypothecation agreement No.STFC/HPT/76257. As accused was in arrears, complainant made a demand for repayment. In response to demand, accused issued it cheque for Rs. 6,87,000/- bearing No.523522 drawn on Pragati Gramina Bank, Ballari Road, Hosapete Branch dated 05.05.2009. When the cheque was presented for collection through Axis Bank....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing submissions. 7. The appellant being a Transport Financing Company, and accused having availed loan for purchase of a commercial vehicle had defaulted in repayment of loan amount. On a demand made by company, cheque was issued by accused for balance amount. The said cheque having been presented for payment, it returned unpaid with endorsement 'insufficient funds'. Despite receiving statutory notice, within time accused failed to make payment. Thus, the complainant established all the ingredients of the offence under Section 138 of N.I. Act. 8. It was further submitted that though accused set up a defence that cheque in question was a post dated cheque, given for security purposes only and not towards discharge of any debt, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ounsel for appellant submitted that in a proceeding under Section 138, once it is established by complainant that cheque is signed by accused and issued to complainant, the presumption under Section 118 and 139 of the N.I. Act would be available. Unless accused rebuts such presumption, complainant is not required to establish every fact of transaction as if it were a civil suit. Learned counsel relied upon the Apex Court decision in the case of D.K.Chandel V/s M/s Wockhardt Ltd. and others reported in 2020(1) CIVIL COURT CASES 582 (SC) which reads as under: "8. As held by the Trial Court as well as by the High Court that the cheque was issued towards the amount due and payable by the appellant for purchase of pesticides. As rightly....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the c....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... upon the decision in Sudha Beevi V/s State of Kerala reported in 2004 Crl.L.J. 3418 which was in respect of Hire Purchase Agreement unlike the loan-cum-hypothecation agreement in this case containing a specific clause regarding continuing guarantee, would also be unsustainable. The trial Court has not taken note of Clause-11 of agreement, which reads as follows: 11. THESE PRESENTS TO BE CONTINUING SECURITY: The Borrower agrees that this agreement and the security hereby created shall operate as a continuing security for all the obligations / facilities of the Borrower in respect of the said credit facilities, not withstanding existence of a credit balance in the said account or any partial payments or fluctuation of accou....