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2019 (7) TMI 1642 - HC - Indian LawsMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - acquittal of the accused - locus standi to depose the case - failure to prove the debt - non-filing of income tax return to show the loan - time limitation for issuance of cheque - Vicarious liability - borrowing of amount in individual capacity - loan not shown amount of loan in income tax account. Locus standi to depose the case - HELD THAT - The deposition of Gagan Bothra, in the crossexamination spanning to 11 days, runs to around 25 typed pages. However, strangely, in the typed set of papers filed by the petitioners before this Court, they have not filed the full deposition of Gagan Bothra and have filed the deposition given by him on 7 days, suppressing the deposition given on four days, viz., 04.03.2015, 01.04.2015, 08.04.2015 and 15.04.2015. It is indeed a sharp practice to file incomplete deposition and the same is deprecated. This Court is not finding fault with the learned Senior Counsel, for, perhaps, they may not be even aware of this - crossexamination has been in Tamil and Gagan Bothra has stated in the crossexamination itself that he does not know to read Tamil, despite which, the answers given by him in respect of the fact in issue militates against the submission of the learned counsel that he was incompetent to depose. The Trial Court and the Appellate Court have appreciated the evidence of Gagan Bothra and have acted on his testimony. Mukanchand has failed to prove the debt - HELD THAT - The learned Senior Counsel submitted that Mukanchand has failed to prove the debt of ₹ 35 lakhs and ergo, the prosecution should fail. As alluded to above, Mukanchand has obtained the certified copies of the two promissory notes, the originals of which, he has filed in C.S. No.652 of 2004 and has marked their certified copies as Exs.P.11 and P.12. - In this case, apart from the cheque in question, two promissory notes totalling to ₹ 35 lakhs have also been marked as exhibits (Exs.P.11 and P.12) and this Court is unable to understand as to beyond that, what proof is required. Complainant has not filed the income tax returns to show that ₹ 35 lakhs was given as loan - HELD THAT - Gagan Bothra brought to the notice of this Court the complaint given by Mani (A3) to the police which formed the registration of the FIR in Cr. No.548 of 2006 and submitted that even in that complaint, there is no mention that the impugned cheque bearing no.578202 was given as security to Mukanchand which he has misused. The admissions of Mani (A3) in the FIR (Ex.P.13) can be used against him under Section 21 of the Evidence Act. In that complaint, he has admitted that a sum of ₹ 21 lakhs was borrowed from Mukanchand for the purpose of construction of college. The said complaint has been given by Mani (A3) in the capacity of Managing Trustee of the Rajiv Gandhi Trust (A1). He has referred to several cheque numbers that have been given as security to Mukanchand, but, significantly, the cheque bearing no.578202 (Ex.P.1) impugned cheque, does not find place therein. That apart, Mani (A3), even in the complaint, has stated that since Arul Anbarasu (A9) is contesting the election in Sholingur constituency, Mukanchand, under the instigation of someone having vested interest, has given wide publicity to tarnish the reputation of Anbarasu (A2) and also his son Arul Anbarasu (A9) to see that Arul Anbarasu (A9) is defeated in the ensuing election - Across the Bar, Gagan Bothra submitted that on this frivolous complaint given by Mani (A3), his father Mukanchand was arrested and remanded to custody. If what Gagan Bothra says is true, then, the accused will have to perforce reap for what they had sown, for, that is the law of nature. Be that as it may, this Court has no reasons to hold that Mukanchand has not proved the debt. Issuance of the impugned cheque is barred by limitation - HELD THAT - Section 138 NI Act prosecution is not intended for money recovery, but, to instill fear in the mind of the drawer of a cheque to ensure that cheques are not indiscriminately issued. In a given case, the Court can merely sentence the accused to imprisonment till the raising of the Court without ordering any compensation. If any amount is paid by the accused to the complainant in a prosecution under the NI Act, that can definitely be given credit in the execution of a money decree. Vicarious liability on Anbarasu (A2) - HELD THAT - The Trust Deed, no doubt, says that Anbarasu (A2) is an Honorary Chairman, which, according to this Court is a misnomer. Unlike a business enterprise where its Managing Director will have remuneration, the Trustees cannot draw remuneration from the Trust funds. They may only draw some actual expenses incurred by them for the benefit of the Trust. Therefore, there is no question of a paid Trustee or Honorary Trustee in matters of Trust - These clauses themselves show the overarching power and hold of Anbarasu (A2) in the affairs of the Rajiv Gandhi Trust (A1). Mani (A3), in the FIR (Ex.P.13), has stated that he has borrowed in his individual capacity - HELD THAT - In this case, 2 promissory notes for ₹ 20 lakhs and ₹ 15 lakhs have been executed in favour of Mukanchand. The promissory notes have been signed by Mani (A3) for and on behalf of the Rajiv Gandhi Trust (A1). The rubber stamp of the Rajiv Gandhi Trust (A1) is available in the promissory notes as well in the impugned cheque. The statutory notices sent to the accused were returned on the ground not claimed . In their Section 313 Cr.P.C. statement also, the accused have not explained the circumstances under which the impugned cheque came into the hands of Mukanchand. Mukanchand has not shown the loan in his income tax account and therefore, it should be black money and as such, Section 23 of the Contract Act would apply - HELD THAT - In the opinion of this Court, after having obtained a loan, it does not behove of the debtor to repudiate it on the ground that the creditor had earned the money through illegal means. In other words, after having borrowed from a compassionate harlot, can the borrower deny repayment of loan on the ground that she had earned the money immorally and illegally? The answer to this question can only be an emphatic No and nothing else. In short, a thief is not entitled to legitimately rob a dacoit. This Court has no reasons to interfere with the concurrent findings of facts arrived at by the two Courts below - Revision dismissed.
Issues Involved:
1. Locus Standi of Gagan Bothra to Depose 2. Proof of Debt by Mukanchand 3. Non-filing of Income Tax Returns to Show Loan 4. Issuance of Cheque and Limitation Period 5. Vicarious Liability on Anbarasu (A2) 6. Borrowing Capacity of Mani (A3) in Individual Capacity 7. Application of Section 23 of the Contract Act Issue-wise Detailed Analysis: I. Locus Standi of Gagan Bothra to Depose: The defense argued that Gagan Bothra was not competent to give evidence on behalf of his father Mukanchand as he was a minor during the transactions. The court, however, concluded that Gagan Bothra, being 25 years old during the trial and having personal knowledge of the transactions, was competent to depose. The court noted that Gagan Bothra withstood extensive cross-examination and provided satisfactory answers, thus satisfying the test laid down in A.C. Narayanan vs. State of Maharashtra. II. Proof of Debt by Mukanchand: The defense contended that Mukanchand failed to prove the debt of ?35 lakhs. The court found that Mukanchand had marked two promissory notes totaling ?35 lakhs as exhibits (Exs.P.11 and P.12), which, along with the issuance of the cheque, led to the presumption under Section 139 of the NI Act that the cheque was issued for discharging a liability. III. Non-filing of Income Tax Returns to Show Loan: The defense argued that the income tax returns of Mukanchand & Sons showed only ?6,70,000/- as outstanding and not ?35 lakhs. Gagan Bothra countered that the loan was taken from multiple accounts, not just the HUF account. The court held that the complainant is not required to prove the source of income beyond the issuance of the cheque, especially when the accused admitted the issuance of the cheque. IV. Issuance of Cheque and Limitation Period: The defense claimed that the debt was time-barred as the cheque was issued in 2006 for a debt from 2002. The court rejected this argument, noting that Mukanchand had filed a civil suit for recovery in 2004, which was within the limitation period, and the issuance of the cheque in 2006 provided a fresh cause of action. V. Vicarious Liability on Anbarasu (A2): The defense argued that Anbarasu (A2) could not be held vicariously liable as he was only an Honorary Chairman. The court, however, found that Anbarasu (A2) had overarching power in the Trust, as evidenced by clauses in the Trust Deed (Ex.P.14), thus justifying the vicarious liability. VI. Borrowing Capacity of Mani (A3) in Individual Capacity: The defense contended that Mani (A3) borrowed the money in his individual capacity. The court found that the promissory notes and the cheque bore the seal of the Rajiv Gandhi Trust (A1) and were signed by Mani (A3) in his capacity as Managing Trustee, thus refuting the claim of individual borrowing. VII. Application of Section 23 of the Contract Act: The defense argued that the loan was void under Section 23 of the Contract Act as it was not shown in the income tax returns, implying it was black money. The court rejected this argument, stating that the debtor cannot repudiate a loan on the ground that the creditor's money was earned illegally. The court emphasized that the source of the creditor's funds is irrelevant to the debtor's obligation to repay. Conclusion: The court dismissed all the criminal revisions, upheld the concurrent findings of the lower courts, and directed the Trial Court to issue a warrant to secure the accused and commit them to prison to serve their sentences.
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