TaxTMI 
TaxTMI 
2026 (4) TMI 1424
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....present Criminal Appeal is filed by the appellant/complainant. 2.Despite service of notice to the respondent and her name printed in the cause list, there was no representation for the respondent either in person or by any counsel. Hence, this Court by order dated 12.11.2025 appointed Ms.R.Gayathri as Legal Aid Counsel for the respondent. 3.Gist of the case is that the appellant and the respondent are known to each other for the past 15 years. The respondent along with her husband approached the appellant and requested to join the chit run by them. Believing the same, the appellant joined the chit and the respondent borrowed a sum of Rs. 3,67,000/- from the appellant. On 03.09.2015, the appellant issued a post dated cheque bearing No.000121 dated 03.10.2015 for Rs. 3,67,000/- drawn on Karur Vysya Bank, Attibele Branch. When the appellant presented the cheque (Ex.P1) for encashment on 26.10.2015 in Central Bank of India, Mookandapalli Branch, the same returned for the reason "Insufficient Funds" on 27.10.2015. The appellant intimated the dishonour of cheque to the respondent, but the respondent did not pay the amount, on the other hand, the respondent requested the appellant t....
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....notice (Ex.P4) issued on 12.11.2015. Despite receipt of the same, the respondent neither paid the cheque amount nor sent any reply. Following the procedure, the complaint under Section 138 of N.I. Act filed before the trial Court. 6.Learned counsel further submitted that the appellant examined himself as PW1. Initially the appellant took a stand as though the respondent took loan from the appellant, at that time, the cheque (Ex.P1) was given by the respondent. Later the appellant deposed that the transaction was related to the chit. This discrepancy is projected as vital contradiction in the evidence of the appellant. The specific defence taken by the respondent is that the signed blank cheque (Ex.P1) was given to one Narayana Reddy with whom the appellant had chit transaction and that the signed cheque (Ex.P1) was filled up by the appellant and projected as though it was issued for liability. Further defence taken by the respondent is that the respondent took a loan of Rs. 2,00,000/- for construction of house and she repaid this Rs. 2,00,000/- with interest, at that time, the appellant returned the cheque which was given for that transaction. As regards this cheque (Ex.P1) give....
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.... got dishonoured. The appellant in his chief examination admits that he intends to examine Narayana Reddy, thereafter, failed to examine Narayana Reddy. The appellant confirmed that the cheque (Ex.P1) is a non-CTS cheque. The cheque, which was given to Narayana Reddy for the chit transaction in the year 2012, was misused by the appellant. The appellant admits that he was an Income Tax Assessee, but he has not shown the loan given to the respondent in the Income Tax Returns. She further submitted that from the appellant's bank account statement (Ex.P7), it is seen that the appellant never had any transaction running to lakhs. The cheque, which was issued as security to Narayana Reddy, was misused, is not proper. The trial Court had merely gone on the statutory presumption invoking Sections 118 and 139 of N.I. Act, but not considered the facts of the case. 9.She further submitted that the respondent elaborately cross examined the appellant who deposed different answers at each stage. To probablize her defence, the respondent examined herself as DW1 and deposed with regard to loan transaction and repayment of loan to the appellant much earlier and also about the chit transaction sh....
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....ted by the respondent. Though the respondent examined herself as DW1 but admits the issuance of cheque (Ex.P1) and takes a defence that the cheque (Ex.P1) was given to one Narayana Reddy who was conducting an indigenous chit. During the chit transaction, the respondent handed over signed blank cheque which was filled up by the appellant and projected as though it was issued for liability. The respondent admits that she knew the appellant and she took loan of Rs. 2,00,000/- from the appellant which she repaid over a period of time and the security cheque which was taken by the appellant was also returned back to her. DW2, a relative of DW1 examined to confirm that there was a chit transaction with Narayana Reddy and it is the practise of Narayana Reddy to collect security cheque from the successful bidders of the chit. Hence, the entire defence rest on the evidence of Narayana Reddy. Though the appellant states that he is inclined to examine Narayana Reddy, but for some other reason not examined him. When the specific defence taken by the respondent that she gave the cheque (Ex.P1) to Narayana Reddy and the said Narayana Reddy was very much available is proved by the evidence of DW2....