TMI Blog2023 (12) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... ount from the appellant viz. ailment of her husband (blood cancer) and the training of her daughter as an Air Hostess, she could have adduced some evidence in order to bolster the said aspect, which she did not. Respondent No. 1 also could have relied on the presumption of fact, for instance, those mentioned in section 114 of the Indian Evidence Act to rebut the presumptions under section 118 and 139 of the N.I. Act. The statutory notice, complaint and evidence of the respective parties, if juxtaposed, would unerringly point out the fact that the respondent No. 1 did borrow an amount of Rs. 3,00,000/- from the appellant and issued cheques in question in discharge of a debt. Defences as raised by respondent No. 1 are unacceptable and unbelievable. Respondent No. 1 had failed to discharge the said onus. A bare look at Section 269-SS of the Income Tax Act would reveal that the said bar is applicable to a person who accepts deposit by way of cash and not to a person who makes or offers any money to the payee and, therefore, even if the said bar is made applicable to the present case, the same shall apply to respondent No. 1 who had accepted the amount of Rs. 3,00,000/- from the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lp as she was undergoing a training as an Air Hostess. 3. The appellant, on humanitarian grounds, lent an amount of Rs. 3,00,000/- to respondent No. 1 by way of loan, which she promised to refund by the end of June, 2007. It is the contention of the appellant that in lieu of the said amount, respondent No. 1 had issued four cheques, details of which are as under; (a) Cheque No. 445883 dated 24th July, 2007 for Rs. 1,25,000/-; (b)Cheque No. 445881 dated 24th May, 2007 for Rs. 1,25,000/-; (c) Cheque No. 445260 dated 24th July, 2007 for Rs. 25,000/- and (d) Cheque No. 445882 dated 23th June, 2007 for Rs. 25,000/-. The cheques were drawn on UTI Bank Limited Ghatkopar which was subsequently known as Axis Bank. Upon instructions of respondent No. 1, the appellant had deposited the cheques in the Bank as respondent No. 1 could not repay the amount till June, 2007. 4. The appellant had initially deposited two cheques of Rs. 1,25,000/- each in the Axis Bank on 3rd October, 2007 at it s Mulund Branch. On 5th October, 2007, she received a memo from the Axis Bank informing her that cheques deposited by her were dishonoured for insufficiency of funds. 5. A legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gued that there is a violation of the provisions of Section 269-SS of the Income Tax Act as the amount in question which exceeds Rs. 20,000/- is stated to have been advanced to respondent No. 1 in cash and not by cheque. 9. Learned Counsel for the appellant has placed reliance on certain precedents, which shall be referred hereinafter. 10. The appellant in her affidavit in lieu of examination-in-chief before the Magistrate testified that she lent Rs. 3,00,000/- to the respondent No. 1 upon her request on 29th January, 2007 as she was in dire need in view of the fact that her husband was suffering from blood cancer and her daughter had to undergo training for the post of an Air Hostess. She testified that respondent No. 1 promised to repay the said hand loan by June, 2007 and, therefore, issued four cheques of following description as enumerated below in favour of the appellant which were drawn on UTI Bank Limited Ghatkopar (East) Branch; (a) Cheque No. 445883 dated 24th July, 2007 for Rs. 1,25,000/-; (b) Cheque No. 445881 dated 24th May, 2007 for Rs. 1,25,000/-; (c) Cheque No. 445260 dated 24th April, 2007 for Rs. 25,000/- and (d) Cheque No. 445882 dated 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is evident from the substantive evidence of Bank Officer examined on behalf of respondent No. 1. 14. Turning back to the cross-examination of the appellant by respondent No. 1 wherein it has been elicited that the appellant and respondent No. 1 were close friends who were working in a Company known as Max Newyork Life . Relations between them were just like members of family and both were on visiting terms to one another s house. Cross-examination further reveals that respondent No. 1 had demanded money from the appellant in the year 2007 which was paid by the appellant to her in cash. The cross further reveals that the appellant did not acknowledge receipt of the amount or executed any document after paying the amount since relations were very close and friendly, which appears to be quite obvious. Cross also reveals that after obtaining the cheques, the appellant advanced the amount to respondent No. 1. The appellant had further stated in her cross-examination that she can prove the source of income from where she had paid an amount of Rs. 3,00,000/- to respondent No. 1. It is further surfaced in the cross-examination that all the aforesaid cheques were given by respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and this witness that the cheques were returned for Insufficient funds and not on account of difference in the signatures. Admittedly, the concerned cheque book was issued in favour of respondent No. 1. It is not the case of respondent No. 1 that since the cheques were lost, she had informed the Bank to stop payment of the cheques. This witness (D.W. 2 Moulik Shah) also testified that he is not aware whether any application to that effect was given by respondent No. 1 or informed the Bank about lost cheques. He testified that since he is not a handwriting expert, he cannot make a positive statement as to whether signatures over the cheques in question were made by respondent No. 1. As such, even this witness has not supported respondent No. 1-accused. It is surprising as to how Counsel for respondent No. 1 argued before this Court that the cheques were stolen by the appellant which was not the defence taken during trial. 17. There is one more interesting fact surfaced during the cross-examination of the appellant wherein the appellant admits that before the cheques were dishonoured, respondent No. 1 had filed a Non-Cognizable Offence bearing No. 725 of 2007 on 18th May, 2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the cheque book? It is equally surprising as to where the other two cheques are, if four cheques were lost. The silence of the respondent No. 1 on this crucial aspect renders her testimony doubtful. It is also surprising to note as to why respondent No. 1 did not make any attempt to prove the fact that the signatures over the cheques were forged. This is nothing short of subterfuge. 20. It would be apposite to place reliance on a judgment of the Supreme Court in case of M/s Kumar Exports Vs. M/s. Sharma Carpets in Criminal Appeal No. 2045 of 2008 (arising out of Special Leave Petition (Criminal) No. 955 of 2007) wherein the Hon ble Supreme Court discussed the scope of Section 139 and 118 of the N.I. Act. Paragraph 11 and 12 are extracted below; 11. The use of the phrase until the contrary is proved in Section 118 of the Act and use of the words unless the contrary is proved in Section 139 of the Act read with definitions of may presume and shall presume as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue. 12. The defence of the appellant was that he had agreed to purchase woolen carpets from the respondent and had issued the cheques by way of advance and that the respondent did not supply the carpets. It is the specific case of the respondent that he had sold woolen carpets to the appellant on 6.8.1994 and in discharge of the said liability the appellant had issued two cheques, which were ultimately dishonoured. In support of his case the respondent produced the carbon copy of the bill. A perusal of the bill makes it evident that there is no endorsement made by the respondent accepting the correctness of the contents of the bill. The bill i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, under the circumstances of the case, act upon the plea that they did not exist. As already stated, nothing has been brought on record to rebut the presumption by the respondent No. 1. There is absolutely nothing in the evidence of respondent No. 1 to infer, even remotely, that neither the amount in question was lent by the appellant nor had she issued any cheques in discharge of the said debt. The reason for which respondent No. 1 is said to have borrowed the amount from the appellant viz. ailment of her husband (blood cancer) and the training of her daughter as an Air Hostess, she could have adduced some evidence in order to bolster the said aspect, which she did not. Respondent No. 1 also could have relied on the presumption of fact, for instance, those mentioned in section 114 of the Indian Evidence Act to rebut the presumptions under section 118 and 139 of the N.I. Act. 22. The statutory notice, complaint and evidence of the respective parties, if juxtaposed, would unerringly point out the fact that the respondent No. 1 did borrow an amount of Rs. 3,00,000/- from the appellant and issued cheques in question in discharge of a debt. Defences as raised by respondent No. 1 ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing made. It may be useful to quote provisions of Section 269SS and 271D of the Income Tax Act as under: Section 269SS : No person shall, after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred to as the depositor), any loan or deposit otherwise than by an account payee cheque or account payee bank draft, if, - (a) the amount of such loan or deposit or the aggregate amount of such loan and deposit; or (b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is twenty thousand rupees or more: Provided that the provisions of this section shall not apply to any loan or deposit taken or accepted from, or any loan or deposit taken or accepted by (a) Government; (b) any banking company, post office savings bank or co-operative bank; (c) any corporation establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Section 269-SS and 271D of the Income Tax Act have absolutely no bearing over the case in hand and, therefore, the impugned judgment and order of acquittal rendered by the Magistrate is unsustainable and, therefore, needs to be quashed and set aside. 26. The learned Magistrate had rendered the judgment in most cryptic and perfunctory manner, in the sense, neither the facts have been clearly stated nor the evidence has been properly discussed. The learned Magistrate has also misinterpreted and misread the legal position as envisaged not only under sections 138 and 139 of the N.I. Act but also the provisions of Section 269-SS of the Income Tax Act. The learned Magistrate has failed to appreciate vital admissions in the cross-examination of the appellant as well as D.W.2 Moulik Shah in it s correct perspective which have been elicited at the time of recording evidence. Thus, the findings arrived at by the Court below are patently illegal and perverse and, therefore, need to be set aside. 27. Corollary of the aforesaid discussion is that the appeal needs to be allowed and as such, it is allowed. The impugned judgment and order rendered by the learned Metropol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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