TaxTMI 
TaxTMI 
2021 (1) TMI 803
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....the case of appellant that respondent had agreed to repay the said amount on 16-8-2008 and accordingly issued a post dated cheque bearing No. 0043110 for Rs. 3,00,000/- drawn on Malaprabha Gramina Bank, in favour of the appellant. 3. On presentation of the said cheque to his bank, the appellant received an endorsement of dishonor of cheque on the ground of "Funds insufficient". Pursuant to which appellant got issued a legal notice on 15-9-2008 to the respondent notifying respondent to repay the cheque amount. Respondent had not repaid the amount despite receipt of notice and neither did he reply to the said legal notice. 4. Thereafter, since no payment was made towards the dishonored cheque, appellant filed a complaint under section 200 of Code of Criminal Procedure for the offence punishable under section 138 of Negotiable Instruments Act (for short "the Act"). After taking cognizance of the offence and on receipt of summons to the respondent, he appeared before the Court and his plea was recorded wherein the respondent pleaded not guilty and claimed to be tried. Accordingly, he was tried. 5. To prove the guilt of respondent, appellant got examined himself as PW1 and one ....
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.... respondent to the appellant. 12. He has further contended that merely by non-production of income tax returns and by non-mentioning of payments of loan amount in the income tax return the appellant has not established and proved the guilt of the respondent, as per the trial Court is erroneous in law. 13. He further contends that the trial Court has misconceived itself by believing that respondent had given blank bond and blank signed cheque. He further contends that the trial Court has committed an illegality by non-considering the oral and documentary evidence placed by the appellant. 14. On the basis of said submissions the learned counsel for appellant seeks to allow the appeal, set aside the judgment of acquittal by the trial Court and consequently convict the respondent for the offence punishable under section 138 of NI Act. 15.Per contra, learned counsel for the respondent vehemently contends that the judgment of acquittal passed by the trial Court is perfectly in accordance with law and the interference by this Court is unwanted. According to the learned counsel for the respondent, it is complainant who has to establish the existence of legally subsisting debt o....
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...., the points that arise for consideration before this Court are: (i) Whether the appellant has proved the guilt of accused thereby warranting a conviction of the respondent? (ii) Whether the judgment of acquittal deserves to be set aside? 20. In order to answer these points, it is necessary to go through the evidence adduced by the parties before Court below and to analyze the case of complainant. It is the case of complainant that he had given a hand loan to his well acquainted friend for the purpose of acquiring adjacent hotel on lease basis and to furnish and develop the same which was situated near Shree Siddivinayaka Enterprises. According to the appellant a loan of Rs. 3,00,000/- was paid on 1-8-2008 in one lump sum by way of cash to the respondent. As the respondent was well acquainted and he had agreed to repay this amount and accordingly issued a post dated cheque on the same day vide cheque bearing No. 0043110 for Rs. 3,00,000/-. 21. As the said cheque came to be returned with an endorsement "Funds insufficient", appellant got issued a legal notice calling upon respondent to repay the dishonored cheque amount. On failure to make payment of the said....
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....ce the evidence neither has he produced any document on his behalf. 27. On careful examination of the evidence adduced by the appellant and cross examination by the respondent, this Court will have to see whether the case has been made out by the complainant attracting the provisions of Section 138 of NI Act. 28. It is not in dispute that a legal notice came to be issued to the respondent by the appellant on 15-9-2008 for repayment of the loan amount claimed by the appellant. It is an admitted fact that there is no reply notice sent by the respondent. After the registration of complaint, respondent has appeared before the Court and in order to defend his case and disprove the version, appellant has cross-examined the witness P.W.1 at length. On careful perusal of the evidence of P.W.1 and the cross-examination by respondent, it is seen that entire case of the respondent is based on the theory that Ex.P.1 though issued under his signature and has been issued as a security towards previous transaction between the parties. It is further case of the respondent that the earlier transaction amounted only to Rs. 40,000/- which he had obtained from the appellant and in order to repay....
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....e 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 6 [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, 7 [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 cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanatio....
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....d, the presumption under section 139 of the Act comes into play whereby the issuance of the cheque is towards discharge of legally recoverable debt or liability. The burden or proof shifts to respondent to disprove the case of appellant and produce material evidence either oral or documentary or both to prove contrary of the case established by the appellant. 34. In the present case, it is the case of appellant that right from the date of issuance of legal notice on 15-9-2008, there is clarity when the loan amount was given, in what manner loan amount was given and the post dated cheque having been issued by the respondent on 1-8-2008 by mentioning the date as 16-8-2008 and in order to show abundant caution, the appellant has got indorsed behind the back of cheque, wherein the respondent has countersigned stating that he has received Rs. 3,00,000/- in cash and promises to honour this cheque. This fact of the matter of admitting the signature by respondent and cheque being drawn on the account of respondent and the countersignature at the backside of the cheque has not been disputed. 35. To rebut the presumption only theory to be clarified is marking of Ex.D.1. On careful exam....
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....g of respondent. Thereby adding to the preponderance of probability raised by respondent against the appellant the conclusion of the trial Court that the appellant has used the said cheque for unlawful gain is without any basis and material evidence. The Judgments relied by the learned counsel for respondent in the case of Krishna Janardhan Bhat's (supra) will not be applicable to the present case on hand as the said judgment has been overruled in the case of Rangappa v. Sri Mohan [2010] 100 SCL 389 (SC) and it is not for the prosecution to prove the guilt of the accused beyond all reasonable doubt as the presumption exists infavour of the appellant and it is only after the probable defence has been raised and the presumption has been rebutted that the respondent would be successful in the matter. 38. In the case of Anss Rajashekar's (supra), this case also will not help the respondent as the Hon'ble Apex Court has held that a presumption is under section 139 of the Act is rebuttable unless the contrary is proved and whether the presumption has been rebutted the test of proportionality must guide the determination and the standard of proof as guided by a preponderanc....