TaxTMI 
TaxTMI 
2024 (12) TMI 833
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....ted 02.08.2023, passed in the case, has been affirmed. 2. At the time of admission of the revision, the original record has been summoned. 3. Heard learned counsel for the parties and perused the record. 4. The case is based on a complaint filed by the private respondent under Section 138 of the Act. According to it, the revisionist had taken Rs. 2,50,000/- as loan, from the private respondent in the month of October, 2019, for his family needs. In return thereof, the revisionist gave a cheque dated 20.07.2021 of Rs. 2,50,000/- to the private respondent, with the assurance that when presented, the private respondent shall get payment of it. The cheque was presented in the bank, but it was dishonoured. A notice was given to the revisionist. The revisionist refused to receive the notice. Thereafter, the complaint was filed. After enquiry, by the order dated 16.10.2021, passed in the case, the revisionist was summoned to answer accusation under Section 138 of the Act. In evidence, the private respondent was examined as PW1. In fact, prior to it, the accusation was read over to the revisionist. According to the revisionist, he did not issue any cheque in discharge of any of hi....
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....that he has cash in hand so as to advance Rs. 2,50,000/-, as loan. 7. In support of his contention, learned counsel for the revisionist has placed reliance on the principles of law, as laid down in the cases of M.S. Narayan Menon @ Mani Vs. State of Kerala and Another, (2006) 6 SCC 39, John K. John Vs. Tom Varghese and Another, (2007) 12 SCC 714, Krishna Janardan Bhat Vs. Dattatraya G. Hegde, (2008) 4 SCC 54, Rangappa Vs. Sri Mohan (2010) 11 SCC 441, Vijay Vs. Laxman and Another, (2013) 3 SCC 86, Indus Airways Private Limited Vs. Magnum Aviation Private Limited (2014) 12 SCC 539, K. Subramani Vs. K. Damodara Naidu, (2015) 1 SCC 99, Basalingappa Vs. Mudibasappa, (2019) 5 SCC 418, Rajaram through LRs. Vs. Maruthachalam through LRs, 2023 SCC OnLine SC 48, Dattatraya Vs. Sharanappa, (2024) 8 SCC 573, and Tedhi Singh Vs. Narayan Dass Mahant, (2022) 6 SCC 735. 8. In the case of Narayan Menon (supra), the Hon'ble Supreme Court, inter alia, observed as follows:- "32. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon w....
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.... (1) If a person takes or accepts any loan or deposit in contravention of the provisions of Section 269- SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted." (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner." "35. A statutory presumption has an evidentiary value. The question as to whether the presumption stood rebutted or not, must, therefore, be determined keeping in view the other evidence on record. For the said purpose, stepping into the witness box by the appellant is not imperative. In a case of this nature, where the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration." 11. In the case of Rangappa (supra), the Hon'ble Supreme Court, inter alia, observed as follows:- "26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impu....
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.... "15. ...................................................................... ............................................................................. ..................... The Delhi High Court has travelled beyond the scope of Section 138 of the NI Act by holding that the purpose of enacting Section 138 of the NI Act would stand defeated if after placing orders and giving advance payments, the instructions for stop payments are issued and orders are cancelled. In what we have discussed above, if a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier, in our considered view, the cheque cannot be said to have been drawn for an existing debt or liability." 14. In the case of K. Subramani (supra), the Hon'ble Supreme Court, inter alia, observed as follows:- "9. In the present case the complainant and the accused were working as Lecturers in a government college at the relevant time and the alleged loan of Rs 14 lakhs is claimed....
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...................." "16. This Court in M.S. Narayana Menon case [M.S. Narayana Menon v. State of Kerala, (2006) 6 SCC 39, held that what is needed is to raise a probable defence, for which it is not necessary for the accused to disprove the existence of consideration by way of direct evidence and even the evidence adduced on behalf of the complainant can be relied upon........................................................... ............................................................................" 16. In the case of Rajaram (supra), the Hon'ble Supreme Court, inter alia, observed as follows:- "29. In the present case, the accused appellant had examined Mr. Sarsaiyyn, Income Tax Officer, Ward No. 18, Circle (II)(5), who produced certified copies of the Income Tax Returns of the complainant for the financial year 1995-1996, 1996-1997, 1997- 1998 and 1998-1999. The certified copies of the Income Tax Returns established that the complainant had not declared that he had lent Rs. 3 lakh to the accused. It further established that the agricultural income also was not declared in the Income Tax Returns." "30. The learned Trial Court further found ....
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....so direct that a further amount of Rs 15,000 shall be paid as compensation to the respondent." 19. It is a revision. The scope of revision is quite restricted to the extent of examining the correctness, legality and propriety of any judgment and order. Generally, evidence are not reassessed in a revision unless inadmissible evidence is considered or admissible evidence is ignored or the finding is perverse, i.e. against the weight of evidence. 20. In the case of Amit Kapoor Vs. Ramesh Chander and Another, (2012) 9 SCC 460, the Hon'ble Supreme Court observed as follows:- "12. Section 397 of the Code vests the court with the power to call for and examine the records of an inferior court for the purposes of satisfying itself as to the legality and regularity of any proceedings or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law. There has to be a well- founded error and it may not be appropriate for the court to scrutinise the orders, which upon the face of it bears a token of careful consideration and appear to be in accordance with law. If one looks into the various judgments of this Court, it emerge....
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....f exchange or cheque was duly stamped; (g) that holder is a holder in due course:- that the holder of a negotiable instrument is a holder in due course: provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him." 22. There is also a presumption that the holder of a cheque receives the cheque in whole or part of any debt or other liabilities. Section 139 of the Act reads as follows:- "139. Presumption in favour of holder.-It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section138 for the discharge, in whole or in part, of any debt or other liability." 23. Undoubtedly, these presumptions are rebuttable and the law on this point is well settled that for rebutting the presumption, an accused is not required to lead any evidence. He can even, from the evidence of the complainant infer and mak....
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....on in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused. The aspect relevant for consideration had been as to whether the appellant-accused has brought on record such facts/material/circumstances which could be of a reasonably probable defence." "20. ........................................................................ ........................................................................ ........................................................................ ..................The observations of the trial court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or t....
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....a cheque or demand draft or a receipt might not have been obtained would make no difference. In this context, it would, perhaps, not be out of context to note that the fact that the respondent-accused should have given or signed blank cheque to the appellant complainant, as claimed by the respondent- accused, shows that initially there was mutual trust and faith between them." "38. In the absence of any finding that the cheque in question was not signed by the respondent- accused or not voluntarily made over to the payee and in the absence of any evidence with regard to the circumstances in which a blank signed cheque had been given to the appellant complainant, it may reasonably be presumed that the cheque was filled in by the appellant complainant being the payee in the presence of the respondent-accused being the drawer, at his request and/or with his acquiescence. The subsequent filling in of an unfilled signed cheque is not an alteration. There was no change in the amount of the cheque, its date or the name of the payee. The High Court ought not to have acquitted the respondent- accused of the charge under Section 138 of the Negotiable Instruments Act." 26. In the ....
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.... respondent and as security thereof, he had given a cheque of Rs. 50,000/-. 29. The revisionist has been examined as DW1 and Mohd. Nazim has been examined as DW2. As DW1, Abdul Qadir, the revisionist, has stated that Mohd. Nazim had taken loan of Rs. 50,000/- at 5% rate of interest from the private respondent, and in lieu thereof, he had given two security cheques. According to DW1, Abdul Qadir, the revisionist, Mohd. Nazim, had returned the amount of loan, but he could not repay the interest. DW2, Mohd. Nazim, has also stated so. 30. As far as the rate of interest is concerned, the revisionist himself has stated that the loan was given at the rate of 5% interest. This has been so stated by DW2, Mohd. Nazim, in Para 3 of his statement, but in Para 10, he speaks of 10% rate of interest. It is true that no specific date has been disclosed by the private respondent. But then, it is not disputed that the cheque was given by the revisionist to the private respondent. What is in dispute is as to why the cheque was given? According to the private respondent, loan was advanced to the revisionist and in repayment of the loan amount, cheque was given, whereas, as stated, according to t....
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....su Mallick and Another, (2013) 16 SCC 465. The Hon'ble Supreme Court, in that case, observed that, "We do not consider it necessary to examine or exhaustively enumerate situations in which courts may remain content with imposition of a fine without any sentence of imprisonment. There is considerable judicial authority for the proposition that the courts can reduce the period of imprisonment depending upon the nature of the transaction, the bona fides of the accused, the contumacy of his conduct, the period for which the prosecution goes on, the amount of the cheque involved, the social strata to which the parties belong, so on and so forth. Some of these factors may indeed make out a case where the court may impose only a sentence of fine upon the defaulting drawer of the cheque. There is for that purpose considerable discretion vested in the court concerned which can and ought to be exercised in appropriate cases for good and valid reasons. Suffice it to say that the High Court was competent on a plain reading of Section 138 to impose a sentence of fine only upon the appellant. Inasmuch as the High Court did so, it committed no jurisdictional error " 36. Learned counse....