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2023 (11) TMI 1 - HC - Indian LawsDishonor of Cheque - legally enforceable debt or not - Transaction in violation of Section 269-SS of Income Tax Act - unaccounted cash - Can such tranaction be permitted to be enforced, by institution of proceedings under Section 138 of the Negotiable Instruments Act ? - HELD THAT:- Acceptance of an amount exceeding Rupees Twenty Thousand in cash attracts penalty under Section 271-D of the Act of 1961 but such acceptance does not nullify the transaction. Infact, the penalty can be waived on showing reasonable cause. Hence, violation of Section 269-SS by the drawer of the cheque would not render the amount in question non-recoverable. A transaction not reflected in the books of accounts and/or Income Tax returns of the holder of the cheque in due course can be permitted to be enforced by instituting proceedings under Section 138 of the Act of 1881 in view of the presumption under Section 139 of the Act of 1881 that such cheque was issued by the drawer for the discharge of any debt or other liability, execution of the cheque being admitted. Violation of Sections 269-SS and/or Section 271-AAD of the Act of 1961 would not render the transaction unenforceable under Section 138 of the Act of 1881. The decisions in Krishna P. Morajkar [2013 (7) TMI 1163 - BOMBAY HIGH COURT], Bipin Mathurdas Thakkar and Pushpa Sanchalal Kothari [2015 (2) TMI 1351 - BOMBAY HIGH COURT] lay down the correct position and are thus affirmed. The decision in Sanjay Mishra [2009 (2) TMI 901 - BOMBAY HIGH COURT] with utmost respect stands overruled.
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