TaxTMI 
TaxTMI 
2026 (1) TMI 561
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....ed persons / petitioners have preferred these Criminal Revisions. 3. Before the Trial Court, the respondent/complainant filed a complaint under Section 138 of the Negotiable Instruments Act, stating that the act of the accused persons attracts an offence punishable under Section 138 of the Negotiable Instruments Act. Accordingly, cognizance was taken, summons were issued to the accused persons and, after appearance, copies were furnished. They denied the offences and the trial commenced. On the side of the complainant, P.W.1 was examined and Exs.P1 to P6 were marked. On the side of the accused, D.W.1 was examined and Ex.D1 was marked. Court documents Exs.C1 to C3 were also marked. 4. Upon considering the oral and documentary evidence, the learned Trial Judge held that the complainant had prima facie established his case against the petitioners. The requirements under Section 138 of the Negotiable Instruments Act were duly complied with. The petitioners failed to discharge the burden cast upon him to probabilise his defence. Accordingly, the petitioners were convicted and sentenced to undergo one year simple imprisonment and to pay a fine. Further, compensation equivalent to t....
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.... Act. 8. According to the defence, the petitioners contended that the complainant is an unauthorised money lender, who is in the habit of obtaining blank cheques and documents as security for loans advanced to borrowers. It was contended that one Jeeva (examined as D.W.1) had obtained a loan from the complainant and, at that time, the complainant insisted on guarantors. Accordingly, the petitioners issued a blank cheque and blank promissory notes to the complainant as security for the said loan. 9. The petitioners further contended that they had not borrowed any personal loans from the complainant as alleged by P.W.1. Even after the principal borrower, namely D.W.1, discharged the loan, the complainant refused to return the blank cheques and promissory notes given as security. It was also contended that the complaint does not specifically state when and where the cheques were issued after the alleged disbursement of the loan, which itself shows that the cheques were not issued by the petitioners towards any legally enforceable debts. According to the petitioners, thes aspects were not properly appreciated by the Trial Court as well as the First Appellate Court and, therefore,....
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....itioners had handed over blank cheques only in their capacity as guarantors and not towards discharge of any legally enforceable debt. Taking advantage of the same, the respondent misused the said cheques. As per the respondent's own evidence, it is admitted that all the money was paid in cash. If the transaction were genuine, the complainant would have disclosed the same before the Income Tax authorities. However, the income tax returns submitted before the trial court for the assessment years 2016-2017 do not disclose the alleged transaction, which itself proves that no such huge amount was independently paid to the petitioners. 14. It was further submitted that Jeeva (D.W.1) had lodged a complaint before the police narrating all the relevant facts even prior to the filing of the present complaints. On 23.02.2018, D.W.1 gave a complaint against the defacto complainant/respondent. During the course of arguments, copies of the FIR in Crime No.44 of 2019 and the protest petition filed by Jeeva were relied upon. It was submitted that the police initially filed a negative final report, against which a protest petition was filed. The protest petition was allowed, the negative final ....
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.... "21. The accused has also an option to prove the nonexistence of consideration and debt or liability either by letting in evidence or, in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and the evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the Court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue." (emphasis supplied) 6.3. A three-Judge Bench of this Court in Rangappa (supra) had occasion to consider Section 139 of the Negotiable Instruments Act elaborately. The Court reiterated that where the signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability. However, the presumption is rebuttable in nature and the onus is on the accused to raise a probable defence. 25.5. It is not necessary for the ....
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....atened all the persons who stood as sureties, hence, D.W.1 lodged a complaint on 06.02.2019. 22. From July 2018 onwards, disputes arose between Jeeva and the persons who stood as guarantors, namely the petitioners. According to the defacto complainant, the loan transaction relates to September 2016 and the cheques were presented for collection on two occasions, namely in July 2018 and October 2018. However, as per the FIR allegations, the guarantors were already threatened on 23.07.2018 itself by the henchmen of the defacto complainant. Under such circumstances, it is highly improbable that the petitioners would have voluntarily approached the defacto complainant and issued a cheques which was presented for collections on 20.07.2018, 21.07.2018, 21.07.2018, 20.07.2018, 21.07.2018, 21.07.2018 and 20.07.2018, respectively. 23. As rightly pointed out by the learned counsel for the petitioners, the defacto complainant has not stated the specific date on which the cheques were issued by the petitioners. As per the evidence of D.W.1 as well as the FIR allegations, there was no cordial relationship between defacto complainant and Jeeva, seven other persons / accused who stood as gua....
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....ate of its encashment, the legally enforceable debt on the date of maturity would not be the sum represented on the cheque. In such circumstances, the payment made must be endorsed on the cheque as prescribed under Section 56 of the Act. Only the cheque so endorsed may be used to negotiate the balance amount, if any. If the endorsed cheque is dishonoured upon presentation, then alone the offence under Section 138 would stand attracted (para 30). Though a post-dated cheque might have been drawn to represent a legally enforceable debt at the time of its drawing, for the offence to be attracted, the cheque must represent a legally enforceable debt at the time of its encashment. If there is a material change in circumstances such that the sum mentioned in the cheque does not represent a legally enforceable debt on the date of maturity or encashment, the offence under Section 138 of the Act is not made out." 27. The learned counsel for the petitioners submitted that, in the case on hand also, the respondent/complainant failed to prove the existence of a legally enforceable debt at the time of drawing and presentation of the cheques. It was contended that the courts below fai....