TaxTMI 
TaxTMI 
2015 (2) TMI 1351
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....ies shall hereinafter be referred to as per their status in the said criminal case. 4. The complainant had filed the complaint against the accused under Section 138 of the Negotiable Instruments Act, 1881('N.I. Act', for short). The case of the complainant was as follows: The complainant and the accused were known to each other as they were businessmen by profession. The accused owed an amount of Rs. 25,00,000/- to the complainant which the accused had taken for business purpose. The accused, in this regard, had executed a demand promissory note dated 01.11.2011 before Notary Public namely Advocate Shri Sachin S. Kolwalkar at Margao. As per the said demand promissory note, the accused was supposed to repay to the complainant the said amount of Rs. 25,00,000/- within a month. Towards repayment of the said amount the accused had issued a cheque bearing no. 701475 dated 05.12.2011 for the said amount of Rs. 25,00,000/-, drawn on the Syndicate Bank, Margao branch, Margao, Goa, in favour of the complainant. The complainant presented the said cheque for encashment with his bankers that is Syndicate Bank, Canacona branch, Nagorcem, Canacona. However, by letter dated 12.12.2011, t....
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....oa Margao. Vide the impugned judgment and order dated 20/09/2014, the Appellate Court dismissed the said appeal and maintained the judgment and order passed by the learned J.M.F.C.. The accused therefore has filed the present revision application. 9. Mr. Shirodkar, learned Counsel for the accused, submitted that in the year 2010 the complainant had borrowed only Rs. 15,00,000/- from the complainant and had agreed to pay Rs. 25,00,000/- namely Rs. 15,00,000/- towards principal amount and Rs. 10,00,000/- being the share in profit. He submitted that the said amount of Rs. 25,00,000/- was paid to the complainant in installments, the last being paid on 10/08/2011. He invited my attention to the cross-examination of PW1 where the payment of the said amount has been admitted. He also read out the evidence of DW1 and DW2. Learned Counsel submitted that there is no evidence on record to establish the capacity of the complainant to advance such an huge amount of Rs. 25,00,000/- to the accused. He urged that the demand promissory note and the cheque which were subject matter of the criminal case were taken forcibly from the accused. He submitted that insofar as the said amount of Rs. 25,00,0....
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....e of the accused that the demand promissory note and cheque were forcibly taken has no force at all. He pointed out that the notary public namely Advocate Shri Sachin S. Kolwalkar had not been examined. Insofar as the contention regarding unaccounted cash, is concerned, the learned Counsel relied upon the judgment of this Court in Criminal Appeal No. 6 of 2012 in the Case of "Mr. Krishna P. Morajkar v/s. Mr. Joe Ferrao and another ". He further submitted that the present is a revision application and no perversity or jurisdictional error has been shown with regard to the impugned judgment and order. He therefore submitted that the revision application deserves to be dismissed. 11. I have gone through the material on record and I have also considered the arguments advanced by the learned Counsel for the parties as also the judgments relied upon by them. 12. There is no dispute that cheque dated 05/12/2011 has been signed by the accused. As has been held by the Apex Court in the case of "Rangappa Vs. Sri Mohan", reported in [MANU/SC/0376/2010MANU/SC/0376/2010 : (2010) 11 SCC 441], there is an initial presumption which favours the complainant, which of course is in the nature of reb....
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....23/12/2011 which is after the accused returned back. Therefore the alleged absence of the accused had nothing to do with the receipt or non-receipt of the legal notice. The evidence on record reveals that the accused was intimated on 26/12/2011 and 04/01/2012. Therefore, as has been rightly held by the learned J.M.F.C., it should be deemed that the accused was duly served and intimated about the legal notice under Section 138 of the N.I. Act. The accused ought to have claimed the said notice and ought to have given an appropriate reply denying his liability which he has not done. Adverse inference is bound to be drawn against the accused. There is no dispute that within the prescribed time, the complainant filed the complaint before the learned High Court. 13. There is an admission by PW1 (complainant), in his cross-examination, that he had received from the accused a sum of Rs. 5,00,000/- on 24/05/2010; Rs. 5,00,000/- on 13/12/2010; Rs. 3,00,000/- on 05/04/2011; Rs. 2,00,000/- on 16/04/2011; Rs. 3,00,000/- on 25/04/2011; Rs. 2,00,000/- on 28/04/2011; Rs. 3,00,000/- on 28/07/2011 and Rs. 2,00,000/- on 10/08/2011. The evidence of DW1 and DW2 also establishes the said payment. The c....
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....to do so. Therefore, as has been rightly held by the learned J.M.F.C., it is not at all proved that the demand promissory note and cheque were taken forcibly from the accused. 14. Though it is the case of the accused that he had borrowed Rs. 15,00,000/- from the complainant and that he had already repaid the said principal amount of Rs. 15,00,000/- along with Rs. 10,00,000/- towards share in profit (total Rs. 25,00,000/-) by 10/08/2011 and that there was no other transaction with the complainant, however, it is pertinent to note that in his cross-examination, DW3, the accused, has specifically stated that during signing of the promissory note he was supposed to pay to the complainant some amount and with that respect he had signed the promissory note. The above is the voluntary statement of the accused which means that even after 10/08/2011, the accused was supposed to pay some amount to the complainant. That explains the amount of Rs. 25,00,000/- as promised to be paid by way of the said demand promissory note dated 01/11/2011 and the cheque dated 05/12/2015. The accused has miserably failed to rebut the presumption arising in favour of the complainant under section 139 of the N.....
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....r Section 139 of the N.I. Act. However, the above observation in the Judgment in the case of "Krishna janardhan Bhat" (supra) has been overruled by a three judge Bench of the Supreme Court in the case of "Rangappa" (supra). In the said case of "Krishna janardhan Bhat" (supra), decided by two judge Bench of the Supreme Court, it was further held that advance of more than Rs. 20,000/- was to be made only by way of an account payee cheque. However, in the case of "Rangappa" (supra), decided by the three judge Bench of the Apex Court, an advance of Rs. 45,000/- was made in cash in spite of which the Hon'ble Supreme Court proceeded to uphold the conviction. Thus, the judgment in the case of "Krishna janardhan Bhat" (supra), with regard to the advance of cash amount of more than Rs. 20,000/- without showing the same in income tax returns, has been impliedly overruled. Therefore, it cannot be said that merely because the amount advanced was not shown in the income tax returns, Section 138 of N.I. Act is not applicable. 18. Vide judgment dated 19/07/2013 passed In Criminal Appeal No. 6 of 2012 (Mr. Krishna P. Morajkar V/s Mr. Joe Ferrao and another), learned Single Judge of this Court....
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....e and at that time it was an unaccounted amount. He categorically admitted that till date (i.e. till 28th February 2006) he has not disclosed the amount to the Income Tax. According to the case of the complainant, he had advanced loan on 14th September 2004 which was repayable within 90 days. Thus, on 14th September 2004 the amount allegedly paid by him to the 1st respondent was stated to be an unaccounted amount which was kept at the residence of the applicant. Moreover, till February 2006, when the evidence was recorded, the said amount was not disclosed in the Income Tax Returns of the applicant. Thus it continued to be an unaccounted amount. 7. It is true that merely because amount advanced is not shown in Income Tax Return, in every case, one cannot jump to the conclusion that the presumption under section 139 of the said Act stands rebutted. There may be cases where a small amount less than a sum of Rs. 20,000/- is advanced in cash by way of loan which may be repayable within few days or within few months. A complainant may not show the said amount in the Income Tax Return as it is repayable within few days or few months in the same financial year. In such a case the failure....
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.... income tax returns becomes irrecoverable would itself defeat the provisions of Section 138 of the N.I. Act. The learned Single Judge has respectfully disagreed with the observations made in the case of "Sanjay Mishra " (supra). No doubt, the above judgment dated 19/07/2013, passed in Criminal Appeal No. 6 of 2013, has been set aside by the Hon'ble Supreme Court, in Criminal Appeal No. 614-615 of 2014. But the setting aside was because the appellant (accused) had already paid the sum of Rs. 4,00,000/- in favour of the complainant. The findings of the learned Single Judge in said Criminal Appeal No. 6 of 2013 have not been set aside. I am in respectful agreement with the observations made by the learned Single Judge (R.C. Chavan, J) in Criminal Appeal No. 6 of 2012. I am of the view that the provision of Section 138 of the N.I. Act does apply to the present transaction. 20. In the case of "Ramdas Hanumant Palankar" (supra), it was found that the complainant did not have the capacity to advance loan of Rs. 2,00,000/- in cash at the relevant time. No returns of income tax, sales tax book of accounts were produced to show that he had capacity to advance the amount of Rs. 2,00,000/....