TaxTMI 
TaxTMI 
2025 (7) TMI 61
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....ith the petitioner, approached the petitioner for a friendly loan for a sum of Rs. 75 lakhs in the month of November 2017. It is alleged that the respondents assured to return the loan amount by January, 2019. Thereafter, the petitioner advanced a sum of Rs. 75 lakhs to the respondents. 3. It is alleged that thereafter the respondents failed to pay the loan amount within the stipulated time and after much insistence issued three cheques bearing nos. 243761 dated 28.01.2019 (CC No. 6830/2019), 243762 dated 27.02.2019 (CC No. 6832/2019), 243763 dated 28.03.2019 (CC No. 6831/2019) each for a sum of Rs. 25 lakhs. The said cheques on presentation got dishonoured and returned unpaid vide return memos dated 23.04.2019 with the remarks : Cheque Nos. 243761 and 243763 with remarks "exceeds arrangement" and cheque no. 243762 with remark "drawer signature differs". Thereafter, on the failure of the respondents to repay the cheque amount despite the issuance of legal demand notice, the subject complaints were filed under Section 138 of the NI Act. 4. By the impugned judgments, the learned MM acquitted the respondents of the offence under Section 138 of the NI Act. The learned MM took int....
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....ned counsel for the respondents submitted that the petitioner failed to show that there existed any legally recoverable debt. He submitted that contrary to the allegation of the petitioner that he had advanced a friendly loan to the respondents, the petitioner failed to mention that there existed strictly business relations between the parties. He submitted that while the petitioner alleged that he had advanced a loan for a sum of Rs. 75,00,000/-, as per his own cross-examination, he was unable to point to a date as to when the said amount was advanced. 8. He submitted that as per the petitioner's own stand, he had advanced the said loan to the respondents in cash, yet either in the complaint or during his cross-examination, the petitioner could not mention the denomination in which the amount was advanced. He submitted that despite being questioned, the petitioner failed to bring forth any witness to attest the grant of loan. He submitted that the petitioner even failed to specify the date, time or purpose for which the loan was advanced. He submitted that it is implausible for the petitioner to have advanced a huge sum of Rs. 75 lakhs in cash, that too, without any document or....
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....ate court should be very slow in setting aside a judgment of acquittal particularly in a case where two views are possible. The trial court judgment cannot be set aside because the appellate court's view is more probable. The appellate court would not be justified in setting aside the trial court judgment unless it arrives at a clear finding on marshalling the entire evidence on record that the judgment of the trial court is either perverse or wholly unsustainable in law." The principles aforesaid are not of much debate. In other words, ordinarily, the appellate court will not be upsetting the judgment of acquittal, if the view taken by the trial court is one of the possible views of matter and unless the appellate court arrives at a clear finding that the judgment of the trial court is perverse i.e. not supported by evidence on record or contrary to what is regarded as normal or reasonable; or is wholly unsustainable in law. Such general restrictions are essentially to remind the appellate court that an accused is presumed to be innocent unless proved guilty beyond reasonable doubt and a judgment of acquittal further strengthens such presumption in favour of the accus....
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....all view based on the evidence on record and decide accordingly. 55. At the stage when the courts concluded that the signature had been admitted, the court ought to have inquired into either of the two questions (depending on the method in which the accused has chosen to rebut the presumption) : Has the accused led any defence evidence to prove and conclusively establish that there existed no debt/liability at the time of issuance of cheque? In the absence of rebuttal evidence being led the inquiry would entail : Has the accused proved the non-existence of debt/liability by a preponderance of probabilities by referring to the "particular circumstances of the case"? xxx xxx xxx 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 ha....
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....ued in discharge of a debt/liability and, if he adduces acceptable evidence, the burden again shifts to the complainant. At the same time, the accused may also rely upon circumstantial evidence and, if the circumstances so relied upon are compelling the burden may likewise shift to the complainant. It is open for him to also rely upon presumptions of fact, for instance those mentioned in Section 114 and other sections of the Evidence Act. The burden of proof may shift by presumptions of law or fact. In Kundanlal's case- (supra) when the creditor had failed to produce his account books, this Court raised a presumption of fact under Section 114, that the evidence, if produced would have shown the non-existence of consideration. 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....
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..... Tr. Pavithran Prasanth : 2024 INSC 1059]. However, in the present case, it is pertinent to note that right from the time of reply to legal demand notice, the respondents denied the issuance of the loan and questioned the mode and manner of the advancement of the loan amount. It is pertinent to note that despite having admitted the same, the petitioner failed to bring forth any material to substantiate that he had advanced the said loan to the respondents. 17. It is pertinent to note that in terms of the dictum of the Hon'ble Apex Court in Rajesh Jain v. Ajay Singh (supra), once the respondents were able to raise a probable defence by either leading direct or circumstantial evidence to show that there existed no debt/liability in the manner as pleaded in the complaint/ demand notice/ affidavit-evidence, the presumption raised against them disappeared. It was then for the petitioner to prove as a matter of fact that there in fact existed a debt/liability. 18. Even if the petitioner's case is taken at the highest, yet, since the respondents had already raised a probable defence to dislodge the presumptions raised against them, the onus was on the petitioner to show that there ....