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2009 (2) TMI 901 - HC - Indian LawsSection 138 of the Negotiable Instruments Act, 1881 - Dishonour of Cheque - acquittal of the accused - amount advanced was an ''unaccounted amount'' which was not disclosed to the Income Tax Authority - cheques issued towards discharge of legally enforceable debt or not? - 1st respondent accepted the liability to repay the loan but denied her signatures on the bill of exchange as well as the cheque - presumption u/s 139 - HELD THAT:- The presumption u/s 139 regarding existence of debt or liability is not rebutted, in order to attract Section 138, the debt or liability has to be a "legally recoverable" debt or liability. As held by the Apex Court in the case of Krishna Bhat [2008 (1) TMI 827 - SUPREME COURT] there is no presumption u/s 139 that the debt is a legally recoverable debt. In the case of Goa Plast (P) Ltd. v. Chico Ursula D'Souza [2003 (11) TMI 336 - SUPREME COURT], the Apex Court reiterated that a debt or liability subject-matter of Section 138 means a legally enforceable debt or liability. Admittedly the amount allegedly advanced by the applicant was entirely a cash amount and that the amount was "unaccounted". He admitted not only that the same was not disclosed in the Income Tax Return at the relevant time but till recording of evidence in the year 2006 it was not disclosed in the Income Tax Return. By no stretch of imagination it can be stated that liability to repay unaccounted cash amount is a legally enforceable liability within the meaning of explanation to Section 138. The alleged debt cannot be said to be a legally recoverable debt. Considering the admission of the applicant, the conclusion recorded by the ld trial Judge that the applicant has failed to establish that the cheque was issued towards discharge of a legally recoverable debt is correct.
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