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2017 (9) TMI 853 - HC - Indian LawsDishonour of cheques - Conviction for the offence under Section 138 of the Negotiable Instruments Act - Held that:- True it is that in all cases where the loan transaction is not referred to or reflected in the Income Tax Returns, one cannot jump to a conclusion that the presumption under Section 139 of the N.I Act stand rebutted. In cases where the amount is small, the same principle may not apply. However, a huge amount of ₹ 50 lakhs has to be explained or else even when such transaction is in the realm of suspicion, an imprimatur of the Court would be given if such transaction is accepted as a valid transaction. There is no gainsaying that non reflection of the loan transaction in the ITR certainly makes the loan unaccounted for, for which penalty could be imposed on the person concerned but it does not become per se unrecoverable. In the present case, seen along with the other facts, this lapse on the part of the petitioner assumes significance. It is thus difficult to presume that there existed a debt liability. Though the petitioner has not stepped into the witness box to lead any evidence but in cases involving Section 138 of the Negotiable Instruments Act, the presumption of the existence of debt liability may be rebutted. The presumption could be rebutted even otherwise on the basis of attendant sets of circumstances and it may not be necessary in each case to expect the accused to lead evidence as in a criminal trial. A statement under Section 313 of the Cr.P.C may not be the evidence of an accused as it is only in the nature of an explanation of an accused of the incriminating circumstances. There is no presumption of law that an explanation given by the accused is always truthful but once a doubt has been created regarding the existence of the debt liability, the reverse onus requirement as has been seen in Rangappa (Supra), makes it incumbent upon the respondent/complainant to prove that loan was advanced and there existed a liability. This Court finds it difficult to believe that ₹ 50 lakhs would be advanced as loan to a person who is on litigating terms with the complainant and that also by selling off his property. We have no evidence whatsoever regarding the sale of the property or mortgage of another property to establish the liquidity/capacity of the complainant to advance loan. Cumulatively seen, the case of the respondent/complainant falls at the seams. There is no option for this Court but to set aside the same. The petitioner stands acquitted and is discharged of all his liability.
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