TaxTMI 
TaxTMI 
2025 (1) TMI 469
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....under Section 138 of the NI Act was filed at the instance of the complainant (since deceased). It is averred that the son of the respondent - Akashdeep had friendly relations with the son of the complainant - Kunal Gupta. It is alleged that Kunal Gupta advanced a sum of Rs. 1,00,000/- to Akashdeep on 23.12.2011, Rs. 1,00,000/- on 27.02.2012. It is alleged that thereafter the complainant advanced a sum of Rs. 2,00,000/- to Akashdeep on 11.02.2013. Further, on 11.02.2013, Bhumika Gupta advanced a sum of Rs. 1,00,000/- to Akashdeep. It is further alleged that Manish Gupta provided a sum of Rs. 1,00,000/- to Akashdeep on 23.12.2011 and a further sum of Rs. 1,00,000/- on 27.07.2012. It is thus the case of the complainant that a total sum of Rs. 7,00,000/- was advanced to Akashdeep by the complainant and his children. 6. It is alleged that Akashdeep provided various cheques for repayment of the loan amount, however, the same were dishonoured on presentation. It is however the case of the complainant that the interest accrued @3% per month on the loan for a period up to December 2012 was paid by Akashdeep. It is alleged that thereafter the respondent assured to repay the sum of Rs. 7,0....
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.... the business of money lending, and had no license for the same. 11. It was noted that it was not the case of the complainant that the whole money was advanced by him. The learned MM further noted that a person could be held liable under Section 138 of the NI Act if such person issued a cheque for discharge of the liability of another person, however, the person in whose favour such cheque had been issued should himself be entitled for the sum of money for which the cheque was issued or must possess some special authorization to file a complaint qua the other person. 12. It was noted that the present complaint was not maintainable qua Manish Gupta, and Bhumika Gupta to whom Akashdeep owed money, and for whose liability as well the cheque had been issued by the respondent. 13. It was noted that Akashdeep, did not owe the money equivalent to that of the cheque to the complainant. Consequently, the learned MM noted that since the liability of the accused was less than the cheque amount, no prosecution under Section 138 of the NI Act could be made. The learned MM, therefore, acquitted the respondent of the offence under Section 138 of the NI Act. Aggrieved by the same, the com....
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....riramlulu Naidu (since deceased) through LRs: Criminal Appeal No. 1978 of 2013]. 19. The present case, however, relates to acquittal of an accused in a complaint under Section 138 of the NI Act. The restriction on the power of Appellate Court in regard to other offence does not apply with same vigor in the offence under NI Act which entails presumption against the accused. The Hon'ble Apex Court in the case of Rohitbhai Jivanlal Patel v. State of Gujarat : (2019) 18 SCC 106 had observed as under: "12. According to the learned counsel for the appellant-accused, the impugned judgment is contrary to the principles laid down by this Court in Arulvelu [Arulvelu v. State, (2009) 10 SCC 206 : (2010) 1 SCC (Cri) 288] because the High Court has set aside the judgment of the trial court without pointing out any perversity therein. The said case of Arulvelu [Arulvelu v. State, (2009) 10 SCC 206 : (2010) 1 SCC (Cri) 288] related to the offences under Sections 304-B and 498-A IPC. Therein, on the scope of the powers of the appellate court in an appeal against acquittal, this Court observed as follows : (SCC p. 221, para 36) "36. Careful scrutiny of all these judgments leads....
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....eived the cheque in discharge of a legally enforceable debt or liability are raised against the accused [Ref. Rangappa v. Sri Mohan:(2010) 11 SCC 441]. 21. The Hon'ble Apex Court in Rajesh Jain v. Ajay Singh : (2023) 10 SCC 148, while discussing the appropriate approach in dealing with presumption under Section 139 of the NI Act, observed the following : "54. .... Once the presumption under Section 139 was given effect to, the courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting the presumption. If he fails to do so, the court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section 138. If the court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking aid of the presu....
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....n. The learned MM noted that in the absence of a power of attorney on behalf of son - Manish Gupta and daughter - Bhumika Gupta, the filing of the present complaint without any written formal authorization is legally untenable. 24. Secondly, and consequently the learned MM noted that the present complaint was not maintainable qua Manish Gupta and Bhumika Gupta to whom money was also owed, and for the discharge of whose liability as well, the subject cheque was issued by the respondent. In that light, the learned MM noted that respondent's son did not owe money equivalent to the cheque, that is Rs. 7,00,000/- towards the complainant. Consequently, the learned MM noted that the respondent was able to raise a probable defence that the liability towards the complainant was less than the cheque amount, and that the respondent was able to rebut the presumptions that existed in favour of the complainant. 25. In the opinion of this Court, the acquittal of the respondent in the present case is unsustainable, inter alia, for the following reasons: 26. At the outset, since the execution and signature on the cheque is not disputed, presumption under Section 138 and 118 of the NI Act i....
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....tion. Though, in that case, this Court was dealing with the presumptive clause in Section 118 NI Act, since the nature of the presumptive clauses in Section 118 and 139 is the same, the analogy can be extended and applied in the context of Section 139 as well. 45. Therefore, in fine, it can be said that once the accused adduces evidence to the satisfaction of the Court that on a preponderance of probabilities there exists no debt/liability in the manner pleaded in the complaint or the demand notice or the affidavit-evidence, the burden shifts to the complainant and the presumption 'disappears' and does not haunt the accused any longer. The onus having now shifted to the complainant, he will be obliged to prove the existence of a debt/liability as a matter of fact and his failure to prove would result in dismissal of his complaint case. Thereafter, the presumption under Section 139 does not again come to the complainant's rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance. [Basalingappa vs. Mudibasappa, AIR 2019 SC 1983; See also, Rangappa vs. Sri Mohan (2010) 11 SCC 441]" ....
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....wards the interest on the entire loan amount, which was dishonoured due to insufficiency of funds; iv) A cheque for Rs. 1,00,000/- in favour of Bhumika Gupta which could not be presented at the request of the son of the respondent. c) The son of the respondent paid interest @3% per month on the loan amount upto December 2012, and since thereafter failed to pay the interest but assured to pay the entire interest together. d) When the complainant and his sons intended to initiate criminal proceedings, the respondent took it upon himself to pay the entire amount of Rs. 7,00,000/- with interest. e) The respondent assured to pay the complainant and his sons and stated that his retirement funds are yet to be released. f) The respondent issued a cheque bearing no. 449327 dated 20.02.2014 for a sum of Rs. 7,00,000/- in favour of the complainant. g) The respondent requested the complainant for financial assistance to the extent of Rs. 3,00,000/- to clear the liabilities owed by the respondent to five different Thrift & Credit Cooperative Societies. The complainant agreed to extend the said financial assistance in the form of loan, and ag....