TaxTMI 
TaxTMI 
2024 (8) TMI 1046
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....loan of Rs. 3,60,000/- [Rupees Three Lacs Sixty Thousand only] without interest, to be repaid by 30th April 2017. Respondent no. 1 is the Director of respondent no. 2 company M/s Naina Packing Private Limited. 3. In May 2017, repeated requests were made by appellant for recovery of said amount. Subsequently, respondent no. 1 issued a cheque bearing no. 863416 dated 03rd July 2019 for a sum of Rs. 1,80,000/- [Rupees One Lac Eighty Thousand only] drawn on Bank, Patparganj branch, Delhi ["the cheque"] towards part payment Vijaya of the said loan, from respondent no. 2 company in a personal capacity. 4. Appellant presented the cheque with his bank, but it returned with the remark "funds insufficient" vide cheque return memo dated 03rd September 2017. Appellant received the cheque return memo from his bank on 18th October 2017 through Speed Post No. ED38567127IN. 5. Appellant served a legal demand notice dated 06th November 2017 for recovery of the cheque amount through speed post on 07th November 2017; same was duly served on the respondents on 09th November 2019, however, no reply was received. Aggrieved thereby, appellant filed complaint case on 21st December 2017 under Sect....
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....ght to be upheld. Impugned Order 10. Trial Court took note of the respective submissions, discussed the essential ingredients in order to constitute an offence under Section 138 NI Act, and observed as follows - firstly, accused/respondent admitted the signature on the cheque, and thus, presumption under Sections 118 and 139 NI Act would be attracted; secondly, presumption of liability in favour of complainant has to be drawn and accused ought to dislodge this presumption by raising probable defence; thirdly, no written/documentary proof of loan of Rs. 3.6 lacs exists; fourthly, no interest was charged; fifthly, loan date is also not mentioned in the complaint; sixthly, it does not appear probable that complainant/appellant would give a friendly loan of such amount in cash which was just lying around in his house rather than deposit it in the bank and earn interest; seventhly, complainant/appellant did not examine any witness to prove friendly relations with accused/respondent; eighthly, complainant/appellant did not prove financial capacity to give loan of said amount; and lastly, in a criminal case, the complainant ought to prove their case beyond reasonable doubt and canno....
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....ccused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5. It is not necessary for the accused to come in the witness box to support his defence. 13. In consonance with the principles summarised in Basalingappa (supra), infirmities in the impugned order are discussed herein below. 14. When presumption under Section 139 was raised, Trial Court ought to have conducted proceedings basis that the cheque was issued in discharge of a debt or liability towards the complainant. At this juncture, the onus was on the accused to rebut the presumption under Section 139. Had the accused been successful in rebutting said presumption, the onus would have then shifted onto the complainant/appellant. The fundamental flaw on part of Trial Court was failing to note effect of the presumption under Section 139 NI Act. As a result, Trial Court erroneously proceeded to deliberate upon want of evidence on part of appellant/complainant i.e. no interest was charged, friendly relations between the parties were not proved, financial capacity not established, and most importantly, guilt of the accused was not proved b....
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....nforceable debt existed qua the complainant and the cheque in question (Ext. CW I/A) was issued in discharge of said liability/debt". When the initial framing of the question itself being erroneous, one cannot expect the outcome to be right. The onus instead of being fixed on the accused has been fixed on the complainant. Lack of proper understanding of the nature of the presumption in Section 139 and its effect has resulted in an erroneous order being passed. 57. Einstein had famously said: "If I had an hour to solve a problem, I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions." Exaggerated as it may sound, he is believed to have suggested that quality of the solution one generates is directly proportionate to one's ability to identify the problem. A well-defined problem often contains its own solution within it. 58. Drawing from Einstein's quote, if the issue had been properly framed after careful thought and application of judicial mind, and the onus correctly fixed, perhaps, the outcome at trial would have been very different and this litigation might not have travelled all the way up to this C....
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....313 CrPC, defence evidence was not led therein even though accused pleaded not guilty and claimed trial. Following observations of the Court therein are instructive; extracted as under: "11. In the instant case, the appellant has only recorded her statement under Section 313 of the Code, and has not adduced any evidence to rebut the presumption that the cheques were issued for consideration. Once the facts came on record remained unrebutted and supported with the evidence on record with no substantive evidence of defence of the appellant to explain the incriminating circumstances appearing in the complaint against her, no error has been committed by the High Court in the impugned judgment [Paramount Tech. v. Sumeti Vij, 2019 SCC OnLine HP 3600] , and the appellant has been rightly convicted for the offence punishable under Section 138 of the Act and needs no interference of this Court. 15. It is well-settled that the proceedings under Section 138 of the Act are quasi-criminal in nature, and the principles which apply to acquittal in other criminal cases are not applicable in the cases instituted under the Act. 16. Likewise, under Section 139 of the Act, a....
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.... Section 139 NI Act; relevant paragraphs of the decision are as under: 15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) "may presume" (rebuttable), (2) "shall presume" (rebuttable), and (3) "conclusive presumptions" (irrebuttable). The term "presumption" is used to designate an inference, affirmative or disaffirmative of the existence of a fact, conveniently called the "presumed fact" drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means "taking as true without examination or proof". 14. Section 139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of....
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....sideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in 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 court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that ....
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....x of each case. The Trial Court in this case turned a blind eye to the fact that every accused facing trial, whether under Section 138 of N.I. Act or under any penal law, when charged with the offence, pleads not guilty and takes a stand that he has not committed the offence. Even in the cases where loan is taken from a bank and the cheques issued to the bank stand dishonoured, the stand taken is same. Mere pleading not guilty and stating that the cheques were issued as security, would not give amount to rebutting the presumption raised under Section 139 of N.I. Act. If mere statement under Section 313, Cr. P.C. or under Section 281, Cr. P.C. of accused of pleading not guilty was sufficient to rebut the entire evidence produced by the complainant / prosecution, then every accused has to be acquitted. But, it is not the law. In order to rebut the presumption under Section 139 of N.I. Act, the accused, by cogent evidence, has to prove the circumstance under which cheques were issued. It was for the accused to prove if no loan was taken why he did not write a letter to the complainant for return of the cheque. Unless the accused had proved that he acted like a normal businessman/prude....