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2016 (8) TMI 1589 - HC - Indian LawsDishonour of Cheque - cheque issued by the accused to the complainant in discharge of legally enforceable debt or liability - Security cheque or not - rebuttal of presumption - HELD THAT:- In the present case, the object of the parties when the transaction was entered into cannot be said to be to circumvent or defeat the purpose of the Income Tax Act. The defendant would not have issued the cheque in question had the object of the loan transaction been to defeat the provisions of the Income Tax Act. In cases where the complainant claims to have advanced a friendly loan in cash, and where the transaction of loan is not evidenced by any other documentary or other reliable evidence, no doubt, the aspect whether the availability of funds in cash with the complainant/lender, and its advancement as loan to the accused have been reflected in the income tax returns of the complainant/lender, or not, become relevant. If, the availability of funds, and the loan transaction itself is not so reflected, that factor is taken note of by the Court as relevant to hold that the presumption under Section 118 and 139 of the NI Act stands rebutted - In the present case, the loan transaction, though not recorded in an agreement, or a receipt or acknowledgement executed by the accused, and though not reflected in the income-tax returns of the complainant, is evidenced by the oral testimony of CW-2, who is an independent witness and highly credible. The cheque in question cannot be said to be merely a security cheque for the reason that the same was issued in consideration of the loan of Rs. 10 lacs taken by the respondent/accused from the appellant/complainant. Merely because the debt may have been repayable subsequently in instalments, it cannot be said that on the date of issuance of the cheque, the debt did not exist. The mode and manner of its repayment was all that was postponed. In any event, on the date of presentation of the cheque, the debt was crystallised and ascertained. It is unheard of, that in the normal course of transactions, the drawer of the cheque issues separate instructions to the holder/payee authorising him to deposit the cheque for encashment. Absence of such authorisation certainly cannot be taken as a factor against the complainant, so as to rebut the presumption under Section 118 and 139 of the NI Act - the finding returned by the Trial Court that the cheque in question was a security cheque, or that it was not issued in respect of an outstanding debt or liability, cannot be sustained and is set aside. The respondent/accused has not been able to rebut the presumption that there was an outstanding debt owed by the respondent accused to the appellant of Rs. 10 Lakhs, and the cheque was issued towards repayment thereof. Consequently, the dishonour of the said cheque, and non-payment of the amount despite service of statutory notice under Section 138, resulted in the commission of offence under Section 138 of the NI Act. The respondent is held guilty of commission of offence under Section 138 of the Negotiable Instruments Act - List on 24.08.2016 for hearing on the aspect of sentence. The respondent shall remain personally present in Court on the next date.
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