2024 (11) TMI 708 - HC - Indian Laws

Dishonour of Cheque - challenge to conviction and sentence under Section 138 of the Negotiable Instrument Act - it is alleged that judgment is based on conjectures and surmises - contradictions in the Complaint and the evidence - only defence that has been put forth by the petitioner is that he had returned the loan amount in cash though, without any acknowledgment - HELD THAT - The learned Metropolitan Magistrate as well as the learned ASJ, have rightly observed that though a plea of having return the amount in cash, has been taken but the petitioner has not able to prove it by any cogent evidence. He admittedly has no acknowledgement of repayment of loan from the respondent and has also not been able to explain why he did not take back the cheques from the respondent No. 2, at the time when he made the alleged repayment. It has been rightly held that the petitioner has not been able to discharge the presumption against him under Section 139 of N.I. Act read with Section 118 of the Indian Evidence Act. So far as the objection taken in regard to the loan being taken in cash being violative of the Income Tax Act is concerned, it is the respondent No. 2 may be liable for prosecution under Income Tax Act but in view of the categorical admissions of the petitioner of having taken a cash of Rs. 15,00,000/-, he cannot avoid his liability under Section 138 of N.I Act. The petitioner in the present Revision Petition, has not been able to agitate any ground which entitles him to any interference in his conviction and sentence. There is no merit in the present Revision, which is hereby dismissed. Revision dismissed.

Summary

Issues:
Challenge to conviction and sentence under Section 138 of the Negotiable Instrument Act based on various grounds including contradictions in evidence, loan transaction in cash exceeding permissible limit under Income Tax Act, failure to prove repayment of loan amount, and failure to discharge presumption under Section 139 of N.I. Act.

Analysis:
The petitioner filed a Criminal Revision Petition under Section 397 of CrPC challenging the conviction and sentence passed by the Metropolitan Magistrate for an offence under Section 138 of the Negotiable Instrument Act. The petitioner had taken a cash loan of Rs. 15,00,000 from the respondent and issued three cheques to repay the loan, which were dishonoured due to insufficient funds, leading to the filing of a complaint under Section 138 of the N.I. Act.

The petitioner contended that the judgment was contrary to law, based on conjectures, and failed to notice contradictions in evidence. Additionally, the petitioner argued that the loan transaction in cash violated the Income Tax Act, and the respondent failed to disclose the source of the loan amount. The petitioner claimed to have repaid the loan in cash within three months but could not provide any acknowledgment. The petitioner relied on a legal precedent to argue that the presumption against him under Section 139 of the N.I. Act had been discharged.

The court noted that the petitioner admitted taking the cash loan and issuing the cheques, which were dishonoured. The petitioner's defense of repaying the loan in cash without acknowledgment was not substantiated by evidence. The court held that the petitioner failed to discharge the presumption under Section 139 of the N.I. Act and the Indian Evidence Act. The court also dismissed the objection regarding the loan transaction violating the Income Tax Act, stating that the petitioner's admission of taking the cash loan rendered him liable under Section 138 of the N.I. Act.

Ultimately, the court upheld the conviction and sentence, dismissing the petitioner's appeal. The court found no merit in the petitioner's Revision Petition, leading to its dismissal. The court directed the execution of the sentence by the Metropolitan Magistrate, concluding the judgment.