TaxTMI 
TaxTMI 
2015 (6) TMI 1267
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............../2015 2. The case of the complainant-appellant, as narrated in the complaint, is that the complainant and accused have known each other for the last about 40 years and have had close friendly relations with each other. The accused had a manufacturing unit and was carrying on the business in the name of Yash Engineering, being a proprietary firm of the accused. The accused started facing some financial crisis in his business and the complainant came forward to help him. 3. In the month of April, 2011, the accused urgently needed money and approached the complainant with a request to arrange Rs. 4 lacs, which he promised to return after a few months. The complainant arranged the sum of Rs. 4 lacs and gave it to the accused. The accused returned the same in the month of April, 2012. The accused again requested the complainant to arrange an amount of Rs. 4.50 lacs, for his business. The amount of Rs. 4.50 lacs was given by the complainant to the accused, who executed a pronote dated 15.05.2012 and promised to pay interest @ 1.5% p.m. The accused again approached the complainant in July, 2012 to arrange a further loan of Rs.4 lacs. Accordingly, the complainant arranged a....
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....used under Section 313 Cr.P.C. was recorded on 04.01.2014. The accused stated that although he used to borrow monies from the complainant, he borrowed small amounts. Further, he admitted his signatures on the pronotes and the cheque. However, he stated that they had been misused by the complainant. He further stated that he had given the cheque to the complainant as security in 2011, which the complainant did not return after the amount was repaid. The accused led the evidence of his wife Smt. Seema, as DW-1. Thereafter, the defence evidence was closed. The learned Magistrate acquitted the respondent-accused on the basis of his scrutiny and appreciation of the evidence by the accused. 6. The learned MM acquitted the accused by giving the following reasoning in the impugned judgment: "8. In this regard, the Court is in agreement with Ld. Counsel for complainant. By virtue of pronotes Ex. CW1/6 and Ex. CW1/7 and cheque Ex. CW1/1, a presumption arises in favour of the complainant that the cheque in question was issued by the accused towards some legal liability. However, during the cross-examination of complainant at the behest of the accused, he filed on record his ITR fo....
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....at the Balance sheet does not pertain to the whole amount. Further, the name of the accused has not been shown in the balance sheet dated 31.03.2013 to indicate that any amount has been given as loan to the accused. Learned counsel for the respondent placed reliance on the following judgments: i. Vipul Kumar Gupta vs. Vipin Gupta, 2012 (4) JCC 248. ii. Satish Kumar vs. State of NCT of Delhi, 204 (2013) DLT 289. iii. Vijay vs. Laxman & Anr., 2013 (2) JCC (NI) 103. 9. I have heard the learned counsel for the parties and perused the record. 10. It is settled law that it would not be open to this Court to set aside an acquittal unless the judgment of the acquittal under appeal appears to be perverse, or based on misappreciation of the evidence. The Supreme Court, in Ghurey Lal v. State of U.P., (2008) 10 SCC 450, has held as follows: "73. In light of the above, the High Court and other appellate courts should follow the well settled principles crystallized by number of judgments if it is going to overrule or otherwise disturb the trial court's acquittal: 1. The appellate court may only overrule or otherwise disturb the trial court&....
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....ect. He did not produce any documentary evidence in the form of an acknowledgment or receipt, nor claimed that one had been issued by the complainant, to show that the entire loan amount had been repaid with the payment of the amount of Rs.50,000/-, and that the said payment was in full and final settlement of the loan transactions. He produced his wife Seema (DW-1) as a witness in whose presence the amount had been allegedly returned. Although, Seema (DW-1) in her examination in chief stated that the complainant had given a receipt regarding the full and final payment, however, in her cross examination she stated that the written proof of the return of the amount has not been brought with her. It does not stand to reason as to why the accused, or his witness DW-1 would not produce the receipt regarding the full and final settlement of the loan, to establish that the loan amount was only to the extent of Rs. 50,000/- which was returned back to the complainant. The accused did not explain the circumstances in which his pronotes Ex.CW-1/6 and Ex.CW-1/7 and the cheque in question CW-1/1 were not returned by the appellant, and what steps he took to record the said factum, when they wer....
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....ndwriting. Respondent has not denied his signatures on the cheques. Once he has admitted his signatures on the cheques he cannot escape his liability on the ground that the same has not been filled in by him. When a blank cheque is signed and handed over, it means that the person signing it has given implied authority to the holder of the cheque, to fill up the blank which he has left. A person issuing a blank cheque is supposed to understand the consequences of doing so. He cannot escape his liability only on the ground that blank cheque had been issued by him." (emphasis supplied) 19. Assuming, that the cheque had been handed over to the complainantappellant in blank by the respondent, the purpose was to enable the appellant to encash it, in the event that the loan was not repaid. Thus, the respondent gave an implied authority to the complainant-appellant to fill up the cheque and encash it. Similarly, once the pronote has been signed and executed by the respondent admittedly, it acts as an acknowledgment of the transaction. The accused-respondent has not been able to produce any evidence in his support that the pronotes had been executed for a loan of only Rs. 50,000/-.....
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....here can one find a prohibition on recovering amounts not disclosed in income tax returns. With utmost humility, I have to state that I have not come across any provision of Income Tax Act, which makes an amount not shown in the income tax returns unrecoverable. The entire scheme of the Income Tax Act is for ensuring that all amounts are accounted for. If some amounts are not accounted for, the person would be visited with the penalty or at times even prosecution under the Income Tax Act, but it does not mean that the borrower can refuse to pay the amount which he has borrowed simply, because there is some infraction of the provisions of the Income Tax Act. Infraction of provisions of Income Tax Act would be a matter between the revenue and the defaulter and advantage thereof cannot be taken by the borrower. In my humble view, to say that an amount not disclosed in the income tax returns becomes irrecoverable would itself defeat the provisions of Section 138 of the Negotiable Instruments Act. Apart from the purpose of this Act, which has been outlined by the learned Single Judge in Shri Deelip Apte (supra) as well as in Sanjay Mishra (supra), it ought to be seen that the moment a p....
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....ounts. On the contrary, the cheque in question is signed by the respondent with a different ink and the particulars regarding the date, name and the amount, which has been filled up in the cheque, is with a different ink. This has been considered by him to be the sufficient reason to draw an inference regarding the probability of the genuineness of the defence of the respondent/accused and acquit him." The decision in Vipul Kumar Gupta (supra) is not applicable in the facts of the present case. In the present case, the appellant has stated that the amount of loans were given to the respondent in the month of May, 2012 and July, 2012. Further, the pronotes executed between the appellant and the respondent on 15.05.2012 (Ex. CW-1/6) and on 20.07.2012 (Ex. CW1/7) have been duly proved on record. 25. The decision in Satish Kumar (supra) relied upon by the respondent has no application in the facts of the present case. The complainant had claimed that he had advanced a loan of Rs.72,000/- to respondent No.2 and that respondent No.2 had issued the cheque in question for the said amount towards discharge of his liability. The said cheque had been dishonoured upon presentation. In re....