TaxTMI 
TaxTMI 
2025 (6) TMI 1345
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....ppellant/complainant had filed this present appeal. 2.For the sake of convenience, the parties are referred to as per their litigative status before the trial Court. 3.The background of the case is that the complainant company and accused had business transactions. The complainant is a manufacturer of ready made garments and the accused approached the complainant for garments work order. Based on which, the complainant entered into a Memorandum of Understanding (MOU) dated 02.02.2011. At that time the accused company a sick unit. On the request of the accused, the complainant extended loan of Rs. 20,00,000/- to the accused on condition that the same shall be returned within a period of six months. The accused failed to honour commitment of the complainant and job work MOU cancelled. The complainant demanded the material cost and loss occurred to the company due to the accused and also demanded loan amount of Rs. 20,00,000/-, and for the loss all together to the tune of Rs. 43,25,000/-. The accused paid the loan amount of Rs. 20,00,000/- borrowed from the complainant but failed to return the loss caused. Later on the request of the accused, the complainant agreed to share the ....
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....lainant suffered a loss to a tune of Rs. 23,25,000/-. The accused agreed to bear 50% of the loss and issued the cheque. On dishonour of the cheque, statutory notice issued. Thereafter, neither the cheque amount paid nor any reply sent. Strangely the accused latter takes a stand that they entered into a sale agreement with one A.Anand of M/s.A.S.P. Engineering for sale of factory shed at No.16, Maraimalai Nagar. At that time, the complainant raised objection for sale of the property since accused not repaid the agreed amount of loss. Now she claims that she instructed her son Ayyappan to issue a cheque/Ex.P2 as security to tide over the situation and further now takes a stand that as per MOU the complaint can only invoke Arbitration Clause, if at all there is any dispute and not to file a complaint under Section 138 of the N.I. Act, which is not proper. 6.It is settled position that the holder of the cheque is at liberty to proceed against drawee of the cheque, if the cheque is dishonoured and there cannot be any negative estoppal. For the first time, during questioning under Section 313 of Cr.P.C. the accused gives an explanation that she was out of country and the cheque was is....
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....he N.I. Act. The Lower Appellate Court shifting the burden on the complainant to prove the debt or liability is not proper. Section 139 of the N.I. Act is an example of reverse onus Clause and therefore, once the issuance of the cheque and signature admitted presumption in favour of the complainant comes to paly that there exists legally enforceable debt or liability. 8.He further submitted that the defence raised by the respondent/accused does not inspire confidence or meet the standard of 'preponderance of probability'. The complainant by cogent evidence and materials independently proved beyond reasonable doubt that the cheque was issued in discharge of a debt or liability by the accused. In this case the accused not proved that there is no debt or liability exists between the complainant and the accused by cogent material. On the other hand, confirms that her son handed over her cheque to the complainant and also not proved that there is no debt or liability to be discharged. 9.The learned counsel for respondent/accused strongly opposed the appellant's contention and submitted that in this case there is only an authorisation letter/Ex.P1 and no power of attorn....
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.... other hand, the husband of the accused examined as DW1 and through him Exs.D1 to D8 marked. Ex.D1 is the MOU, Ex.D2 is the mail sent to the complainant on 03.08.2011 recording the meetings, fixing of piece rate for the job work and for the expenses incurred in the process of job work, by sudden cancellation of MOU without three months notice. Ex.D3 is the letter confirming the payment of Rs. 20,00,000/- by way of Demand Draft drawn on Syndicate Bank dated 10.11.2012. Ex.D4 is the Passport entry showing that on the date of the issuance of cheque, accused was not in India, the explanation under Section 313 of Cr.P.C. is clean. The cheque was handed over by her son Ayyappan to tide over the obstacles created by the complainant in sale of industrial shed at Maraimalai Nagar to M/s.A.S.P. Engineering. Ex.D6 is the sale deed. Ex.D7 is the letter of M/s.A.S.P. Engineering. The accused thus by cross examination and by producing defence evidence and materials proved that there is no liability for cheque/Ex.P2 and it was only an adjustment to tide over the situation during the sale of industrial shed by the accused to M/s.A.S.P. Engineering. 12.Further submitted that PW1 though represent....
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....umar reported in MANU/TN/4344/2018, it is held that lack of personal knowledge about the transaction on the part of the complainant or his witness, will shake the very root of the case under Section 138 of the N.I. Act. In the case of Kumar Exports vs. Sharma Carpets reported in (2009) 2 SCC 513, it is held that the accused can inter alia rely on circumstantial evidence or Section 114 of the Evidence Act to rebut the presumptions arising under N.I. Act. Further it is held that failure by the complainant to produce books of accounts or stock register to prove the existence of legally enforceable debt would render a case under Section 138 of N.I. Act liable to be dismissed. Further referring to the case of M.S Narayana Menon vs. State of Kerala reported in (2006) 6 SCC 39, wherein it is held that burden of proof on the accused is only preponderance of probabilities and he does not have to disprove the prosecution case in entirety and adverse inferences can be drawn against the complainant for not producing books of accounts and business register to prove the debt. Further referring to the judgment in the case of Union of India vs. Raman Iron Foundry reported in (1974) 2 SCC 231 and t....