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2015 (9) TMI 1068 - MADRAS HIGH COURT

2015 (9) TMI 1068 - MADRAS HIGH COURT - TMI - Offence under Section 138 of the Negotiable Instruments Act - Dishonor of cheque due to insufficient funds - Held that:- Once the issuance of the cheque has been admitted, the appellant/complainant is entitled to invoke presumption under Section 118 and 139 of the Negotiable Instruments Act that the cheque has been issued for discharging the legally subsisting liability. The said presumption is a rebuttable one and so, the burden is upon the responde .....

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filed was denied by him. - respondent herein has not rebutted the presumption invoked under Section 139 of the Negotiable Instruments Act. Further, he has not probabilised his defence. Hence, the onus does not shift to the complainant.

Hence, I am of the view that the cheque has been issued for discharging the legally enforceable debt. When the cheque was presented for encashment, it was returned as 'insufficient funds' on 11.09.2002. Hence, statutory notice has been issued to the res .....

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ents Act. - Crl.A.Nos.801 and 802 of 2011 - Dated:- 6-3-2015 - MS. R.MALA, J. For The Appellant : Mr.S.Mukanchand Bothra (party-in-person) For The Respondent : Mr.K.Ramani JUDGMENT The Criminal Appeals arise out of the judgment of acquittal dated 07.10.2011 in C.C.Nos.6788 and 6787 of 2002 on the file of the learned VIII Metropolitan Magistrate, George Town, Chennai. 2. The facts of the case are as follows: Crl. A.No.801 of 2011 (C.C.No.6788 of 2002): (i) The appellant herein as a complainant pr .....

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n 30.09.2002 with an endorsement party out of station not claimed as per Ex.P4/return cover. Therefore, the appellant preferred a private complaint against the respondent/accused under Section 138 of the Negotiable Instruments Act. Crl. A.No.802 of 2011 (C.C.No.6787 of 2002): (ii) The appellant herein as a complainant preferred a private complaint stating that the respondent/accused had borrowed loan from the complainant and to discharge the said liability, he had given Ex.P1 cheque dated 04.09. .....

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nder Section 138 of the Negotiable Instruments Act. 3. The trial Court has taken cognizance of an offence, after following the procedure and recording sworn statement. Since the accused pleaded not guilty, the trial Court examined P.W.1 and marked Exs.P1 to P4 on the side of the complainant. No oral and documentary evidence were let in on the side of the respondent. The trial Court after considering the oral and documentary evidence, acquitted the accused for the offence under Section 138 of the .....

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egally subsisting liability and the presumption is rebuttable one. But the respondent/accused has not rebutted the presumption by preponderance of probabilities. Whereas the trial Court has wrongly held that burden is shifted upon the complainant to prove that the cheque is issued for discharging legally subsisting liability. It is further submitted that the trial Court has held that the complainant has not obtained licence for money lending business, which is against law and the income tax retu .....

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dated 29.04.2011 (S.Swarna v. S.Mukanchand Bothra); (iii) S. A.Nos.280 to 285 of 1998, dated 30.06.2011 (Kuppayammal v. A.Sitheswaran); 5. Resisting the same, the learned counsel for the respondent would submit that the appellant has not proved that the cheque has been issued for discharging the legally subsisting liability. The said cheques were given only as security at the time of borrowal of money, which was subsequently repaid. Further, any amount of money exceeding ₹ 20,000/- has to .....

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) 141 (Madras) (T.R.Palanisamy v.Hariharan); (ii) CDJ 2008 MHC 4594 (Mad.) (Kalavally v. Parthasarathy); (iii) 2014 (8) Scale 669 (Ramdas v. Krishnanand); (iv) (2008) 4 Supreme Court Cases 54, Krishna Janardhan Bhat v. Dattatraya G.Hegde. 6. Considered the rival submissions made by both sides and perused the typed set of papers. 7. Once the issuance of the cheque has been admitted, the appellant/complainant is entitled to invoke presumption under Section 118 and 139 of the Negotiable Instruments .....

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'ble Apex Court reported in 2010 (2) MWN (Cr.) DCC 5 (SC) (Rangappa v. Sri Mohan), the accused must prove his defence not only by examination of fresh witness, however he may place reliance on the prosecution evidence. Before adverting to the facts of the case, it would be appropriate to consider the decision relied on by both sides. 9. The Party-in-Person relied on the following decisions: 9.1. In the decision of the Hon'ble Apex Court made in Criminal Appeal No.1020 of 2010, Rangappa v .....

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an would, under the circumstances of the case, act upon the plea that it did not exist. 9.2. In the decision of this Court dated 29.04.2011 made in Crl.R. C.No.807 of 2005 and 556 of 2006, S.Swarna v. S.Mukanchand Bothra, it was held that once they plead discharge, the person who pleads discharge must prove the same. The respondent herein has proved that he discharged the same. But, he has not filed any documents to prove the discharge. It is appropriate to incorporate paragraph 12 of the said d .....

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s, it was held that having regard to the fact that the respondents/defendants have failed to discharge the initial burden that they only put their signatures in blank promissory notes and having regard to sections 2(12) and 2(14) of the Indian Stamp Act and Section 20 of the N. I. Act, it has to be presumed that the document was executed by the defendants and therefore, under Section 118 of the Negotiable Instruments Act, presumption shall be drawn in favour of the plaintiff that the document wa .....

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e of entry in the accounts maintained by the appellant for the purpose of income tax with regard to the cheque loan. In this regard, PW1, the complainant would depose that in the statement of account ending with 31.03.2000, he has given the particulars with regard to the loan to his Auditor. Again he reiterated the same evidence in his cross examination. But he has not produced the income tax return to the Court. It is observed by the learned Judicial Magistrate in the judgment that the complain .....

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come tax account. In this context, in the absence of production of income tax returns, it is to be held that the loan transaction should not have been shown in the account. As per the settled position of law, when the income tax assessee fails to produce income tax returns containing the loan transaction, it should have been observed that the alleged loan transaction is a an illegal one. Further, he has not disputed the genuineness of Exs. D1 to D3 and the evidence of PW2 with regard to these do .....

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held that as per Section 269-SS, Income Tax Act, any advance taken by way of loan of more than ₹ 20,000 had to be made by an account payee cheque. 10.3. The decision reported in 2014 (8) SCALE 669, Ramdas S/o Khelunaik v. Krishnanand S/o Vishnu Naik does not apply to the facts of the present case because it was held therein that the case has been filed as if it was for borrowal of money. In paragraph 9 of the said decision, it was stated as follows: 9. ... We find from the record that adm .....

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complainant giving hand loan to the accused-appellant. There was also no calculation of account or stipulation of any interest on the alleged loan amount to show as to how the amount of ₹ 5,00,000/- was figured, in return of a hand loan of ₹ 1,75,000/- if at all taken by the appellant from the complainant. It is also not on record whether there was sufficient balance amount or not in the bank account of the accused when the cheque was dishonoured by the Bank. The Complainant himself .....

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D.W.6. However, in the instant case no rebuttable evidence has been let in. Hence, the above citation is not applicable. 10.4. In the decision reported in CDJ 2008 MHC 4594, Kalavally v. Parthasarathy, it was held that once presumption under Section 139 has been rebutted, the onus is shifted to the complainant to prove that the cheque has been issued for discharge. It is appropriate to incorporate paragraph 44 of the said decision: 44. In this case, the evidence on record makes it abundantly cle .....

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ct that the complainant had not produced any account books to show that he was carrying on quarrying business as claimed by him and no documentary proof has been produced to prove his means it should be held that the complainant has failed to prove that the cheque was given in discharge of a legally recoverable liability. When the defence taken by the accused is that the complainant was a man of no means, it is the bounden duty of the complainant to prove by acceptable evidence that he had the m .....

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ument. The complainant had not explained as to why such document was not obtained from the accused. 11. Considering the citations submitted by both sides, now this Court has to consider the facts of the present case. It is admitted that the respondent has borrowed ₹ 35 lakhs and that amount was also shown in the Income Tax returns. Further, when a suggestion was posted to the appellant that at the time of borrowal of money, blank cheques were issued which was subsequently filled up and com .....

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tion 118 and 139 of the Negotiable Instruments Act that the cheque has been issued for discharging the legally subsisting liability. Now, it is the duty of the respondent/accused to rebut the presumption that he had borrowed the money and repaid the same and that the cheque has been issued only as a security. However, except the denial made by P.W.1, no other evidence is available. The respondent herein has not filed any document to show that the amount has been repaid. As per the decision of th .....

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ing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. However, in the instant case, to prove that he had repaid the money, the respondent has not let in any evidence. Hence, I am of the view that the respondent herein has not rebutted the presumption invoked under Section 139 of the Negotiable Instruments Act. Further, he has not probabilised his defe .....

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te that the Trial Court in paragraph 14 of its judgment has stated that the amount lent to the respondent/accused has not been shown in the liability column in the Income Tax return. The party-in-person would submit that the said amount was shown in the assets column and not in the liability column. However, the Trial Court has not considered the same. It is also true that the Income Tax return has not been marked. However, as per the application filed under Section 91 Cr.P. C, the said document .....

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been admitted, the appellant is entitled to invoke presumption under Section 118 and 139 of the Negotiable Instruments Act that the cheque has been issued for discharging the legally subsisting liability, which is a rebuttable presumption. However, the presumption has not been rebutted by this respondent/accused. He has not probabilised his defence by preponderance of probabilities. Hence, I am of the view that the cheque has been issued for discharging the legally enforceable debt. When the ch .....

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on 138 of the Negotiable Instruments Act. 16. It is true that as per the dictum of the Hon'ble Apex Court relied on by the learned counsel for the respondent reported in (2008) 4 Supreme Court Cases 54, Krishna Janardhan Bhat v. Dattatraya G.Hegde, the other principles of legal jurisprudence, namely, presumption of innocence as a human right and the doctrine of reverse burden introduced by S.139 should be delicately balanced and such balancing acts would largely depend upon the factual matri .....

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