TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 475
X X X X Extracts X X X X
X X X X Extracts X X X X
....and also issued a post dated cheque bearing No. 834276 dated 17.06.2016 for a sum of Rs. 10,00,000/- in favour of the petitioner. The said cheque on presentation got dishonoured and returned unpaid vide return memo dated 18.06.2016 with remarks "funds insufficient". Thereafter, the petitioner sent a legal demand notice dated 12.07.2016 to Respondent No. 2. Subsequently, on the failure of Respondent No. 2 to repay the cheque amount within the stipulated period despite the issuance of legal demand notice, the subject complaint was filed under Section 138 of the NI Act. 3. By the impugned judgment, the learned MM acquitted Respondent No. 2 of the offence under Section 138 of the NI Act. It was noted that as per the version of the petitioner, he had advanced a sum of Rs. 10,00,000/- to Respondent No. 2 on 24.07.2015 out of which Rs. 5,00,000/- was paid through RTGS and Rs. 5,00,000/- was paid in cash. It was noted that at the time of framing of notice, Respondent No. 2 only admitted to receiving a sum of Rs. 5,00,000/- from the petitioner. It was further noted that as per Respondent No. 2, he had already paid a total of Rs. 10,00,000/- to the petitioner in the following manner: Rs. 9,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ame was with respect to a separate transaction, no evidence was brought forth to substantiate that the sum of Rs. 9,00,000/- pertained to a separate transaction with the mother of Respondent No. 2. 7. The learned MM noted that even if the stand of the petitioner that Respondent No. 2 had availed a loan for a sum of Rs. 10,00,000/- was presumed to be correct, the same had already been repaid by Respondent No. 2. It was noted that the petitioner received a sum of Rs. 9,00,000/- on 28.01.2016 and that the same was reflected in the statement of account placed by Respondent No. 2. It was noted that the statement of account further reflected a withdrawal of a sum of Rs. 1,00,000/- on the same day that is 28.01.2016. It was noted that the same was in line with the testimony of Respondent No. 2 and his father that the remaining sum of Rs. 1,00,000/- was paid to the petitioner in cash. Consequently, considering that Respondent No. 2 was able to raise a probable defence to rebut the presumptions raised against him, the learned MM acquitted the respondent of the offence under Section 138 of the NI Act. 8. The learned counsel for the petitioner submitted that the learned MM erred in acquitti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as then on the petitioner to establish the existence of debt. Analysis 11. The present case, 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 an appeal against the order of acquittal in regard to other offence does not apply with same vigour 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 judg....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 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]. 13. 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 presumption. The c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is discharged, and the presumption 'disappears.' The burden then shifts upon the complainant, who then has to prove the existence of such debt as a matter of fact. The Hon'ble Apex Court in Rajesh Jain v. Ajay Singh (supra), in this regard has observed as under: "41. In order to rebut the presumption and prove to the contrary, it is open to the accused to raise a probable defence wherein the existence of a legally enforceable debt or liability can be contested. The words 'until the contrary is proved' occurring in Section 139 do not mean that accused must necessarily prove the negative that the instrument is not issued in discharge of any debt/liability but the accused has the option to ask the Court to consider the non-existence of debt/liability so probable that a prudent man ought, under the circumstances of the case, to act upon the supposition that debt/liability did not exist. [Basalingappa Vs. Mudibasappa (AIR 2019 SC 1983) See also Kumar Exports Vs. Sharma Carpets (2009) 2 SCC 513] xxx xxx xxx 44. The accused may adduce direct evidence to prove that the instrument was not issued in discharge of a debt/liability and, if he adduces acceptable evidence, the burden again ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Respondent No. 2 was 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 him "disappeared". The onus then "shifted" on the petitioner to establish as a matter of fact that there in fact existed a debt/liability, and a failure to do so would culminate in the dismissal of his complaint case. 17. The petitioner has emphasised upon the contradictions that emerged in the version of Respondent No. 2 to challenge the impugned judgment. It has been argued that at the time of framing of notice, Respondent No. 2 stated that he had given a blank signed cheque to the petitioner, however, he subsequently stated that he met the petitioner for the first time in Court and that a blank signed cheque along with the promissory note was given by him to his father. He further submitted that while Respondent No. 2 only admitted to having taken a loan of Rs. 5,00,000/- he stated that the entire sum of Rs. 10,00,000/- had been paid to the petitioner. 18. It is imperative to note that it is the petitioner's own case that....