TaxTMI 
TaxTMI 
2021 (9) TMI 1159
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....t is that the respondent who was known to him for the past few years approached the appellant and informed that due to his financial difficulty he intends to sell the house situate in Sirsi town. The appellant agreed to purchase the same for the negotiated total sale consideration of Rs. 4,00,000/( Rupees four lakhs only). An agreement dated 06.06.1996 was executed by the respondent while receiving the advance amount of Rs. 3,50,000/( Rupees three lakhs fifty thousand only). Subsequently, when the appellant made certain enquiries, he learnt that the house stood in the name of the father of the respondent and the respondent did not have the authority to sell the same. In that view, the appellant demanded the return of Rs. 3,50,000/( Rupees three lakhs fifty thousand only) which he had paid as the advance amount. The respondent instead of paying the entire amount, issued a cheque dated 17.05.1998 for the sum of Rs. 1,50,000/( Rupees one lakh fifty thousand only) being part of the amount. The appellant presented the cheque for realisation on 20.05.1998 when it came to be dishonoured with the endorsement 'insufficient funds'. 3. The appellant therefore got issued a notice informing th....
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....eration. 5. We have heard Mr. Rajesh Inamdar, learned counsel for the appellant, Mr. G.V. Chandrasekar, learned counsel for the respondent and perused the appeal papers. 6. Before the learned Magistrate, the appellant had examined himself as PW1 and got marked the documents at Exhibits P1 to P6. The deposition of the appellant as PW1 indicated that the appellant and the respondent were known to each other for about 7 to 8 years prior to the transaction in question. In that view, in the year 1996 the respondent approached the appellant, explained his financial difficulties and due to his financial need, offered to sell the property situate in Sirsi. In that light, the price was finalised at Rs. 4,00,000/( Rupees four lakhs only) and on executing an agreement dated 06.06.1996 (Exhibit P6), the advance amount of Rs. 3,50,000/( Rupees three lakhs fifty thousand only) was paid. The balance amount of Rs. 50,000/( Rupees fifty thousand only) was to be paid at the time of registration and the transaction was to be completed within six months. It is alleged that the respondent kept on postponing the registration on one pretext or the other. Therefore, on an enquiry the appellant learnt th....
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....t at Exhibit P6 cannot be believed, as well. 9. Mr. Rajesh Inamdar, the learned counsel appearing on behalf of the appellant has contended that the signature on the documents at Exhibit P6 and the cheque at Exhibit P2 is not disputed by the respondent. In that view, it is contended that the learned JMFC was justified in raising a presumption against the respondent and convicting him since there was no rebuttal evidence or contrary material whatsoever. It is contended that the document at Exhibit P6 was relied to indicate that there was a transaction entered into between the parties towards which the payment was made but the manner in which the High Court has adverted to the said document is beyond the scope of the requirement in a proceeding under Section 138 of the N.I. Act. In that circumstance, it is contended that the learned Single Judge has proceeded at a tangent and has set aside the concurrent judgments of the courts below, though limited scope was available in a Revision Petition. 10. Mr. G.V. Chandrasekar, the learned counsel for the respondent submitted that the trial court and the lower appellate court has not examined the case in its correct perspective. Instead, mer....
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....ature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption. The Trial Court was not persuaded to rely on the interested testimony of DW1 to rebut the presumption. The said finding was upheld by the High Court. It is not now open to the accused to contend differently on that aspect." 14. The learned counsel for the respondent has however referred to the decision of this Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 wherein it is held as hereunder: "25. We having noticed the ratio laid down by this Court in the above cases on Sections 118 (a) and 139, we now summarise the principles enumerated by this Court in following manner: 25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. 25.2. The pres....
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....ed the burden on the complainant to prove his financial capacity and other facts." 15. In that light, it is contended that the very materials produced by the appellant and the answers relating to lack of knowledge of property details by PW1 in his cross-examination would indicate that the transaction is doubtful and no evidence is tendered to indicate that the amount was paid. In such event, it was not necessary for the respondent to tender rebuttal evidence but the case put forth would be sufficient to indicate that the respondent has successfully rebutted the presumption. 16. On the position of law, the provisions referred to in Section 118 and 139 of N.I. Act as also the enunciation of law as made by this Court needs no reiteration as there is no ambiguity whatsoever. In, Basalingappa vs. Mudibasappa (supra) relied on by the learned counsel for the respondent, though on facts the ultimate conclusion therein was against raising presumption, the facts and circumstances are entirely different as the transaction between the parties as claimed in the said case is peculiar to the facts of that case where the consideration claimed to have been paid did not find favour with the Court....
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....d with regard to not having visited the property or having knowledge of the location of the property. Such consideration, in our opinion, was not germane and was beyond the scope of the nature of litigation. The validity of the agreement in the manner as has been examined by the learned Single Judge may have arisen if the same was raised as an issue and had arisen for consideration in a suit for specific performance of the agreement. The decision in K. Chinnaswamy Reddy vs. State of Andhra Pradesh and Anr. AIR 1962 SC 1788 relied on by the learned counsel for the respondent would not be of assistance in the present facts. Firstly, in the said decision this Court has expressed the limited power available to the High Court in Revision Petition. Even otherwise, we have disapproved the manner in which the learned Single Judge has proceeded to examine the matter on contentions which were not raised as a foundation before the Trial Court. In the instant case, the said agreement (Exhibit P6) had been relied upon only to the limited extent to indicate that there was a transaction between the parties due to which the amount to be repaid had been advanced. To that extent the document had bee....
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....s. 3,50,000/( Rupees three lakh fifty thousand only) and had to get back the entire advance paid. The natural conduct would have been to secure for the full amount if that was the situation. Keeping all these aspects in view, the case put forth by the respondent does not satisfy the requirement of rebuttal even if tested on the touchstone of preponderance of probability. Therefore, in the present facts it cannot be held that the presumption which had arisen in favour of the appellant had been successfully rebutted by the respondent herein. The High Court therefore was not justified in its conclusion. 21. Having arrived at the above conclusion, it would be natural to restore the judgment of the Learned JMFC. Though in that regard, we confirm the order of conviction, we have given our thoughtful consideration relating to the appropriate sentence that is required to be imposed at this stage, inasmuch as; whether it is necessary to imprison the respondent at this point in time or limit the sentence to imposition of fine. As noted, the transaction in question is not an out and out commercial transaction. The very case of the appellant before the Trial Court was that the respondent was ....