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2018 (9) TMI 1523 - HC - Indian LawsDishonor of Cheque - recovery of loan - Section 139 of the Negotiable Instruments Act, 1881 - decree was passed in favor of the respondent / plaintiff on the basis of presumption of the cheque having been given in discharge of antecedent liability - It is argued that on the basis of the said presumption alone, the suit of the respondent / plaintiff against the appellant / defendant for recovery of money on the basis of a cheque for the suit amount, could not have been decreed. Held that - If there is even little evidence on the basis of which the last Court of Facts has decided, the Second Appellate Court cannot, by labelling the judgment of the First Appellate Court as perverse, seize jurisdiction over matters of fact. Om Prakash, when summoned as a witness by the appellant / defendant, thus could not be expected to incriminate himself by admitting operating a committee or by admitting that the respondent / plaintiff had at the contemporaneous time of loan received money from the committee . The evidence of Om Prakash thus does not rebut the presumption, even if the test of proportionality is applied. This Second Appeal does not entail any substantial question of law and has no merit to be heard further - appeal dismissed.
Issues Involved:
1. Substantial Question of Law in Second Appeal 2. Presumption under Section 139 of the Negotiable Instruments Act, 1881 (NI Act) 3. Evidence to Rebut Presumption 4. Legally Enforceable Debt and Income Tax Act Compliance 5. Jurisdiction under Section 100 of the Code of Civil Procedure, 1908 (CPC) Detailed Analysis: 1. Substantial Question of Law in Second Appeal: The appeal under Section 100 CPC challenges the judgment of the First Appellate Court, which reversed the Trial Court's dismissal of the suit for recovery of ?1,25,000/-. The High Court noted that a Second Appeal requires a substantial question of law to be framed, which was not done initially. The appellant's counsel argued that the First Appellate Court wrongly allowed the appeal based on a presumption under Section 139 of the NI Act. However, the High Court emphasized that merely because another view is possible on the appreciation of evidence does not constitute a substantial question of law. 2. Presumption under Section 139 of the Negotiable Instruments Act, 1881 (NI Act): The First Appellate Court had allowed the appeal by referring to Section 139 of the NI Act, which presumes that a cheque is issued in discharge of an antecedent liability. The High Court discussed the presumption under Section 139, noting that it includes the existence of a legally enforceable debt. This presumption can be rebutted by the accused by raising a probable defense. 3. Evidence to Rebut Presumption: The appellant/defendant claimed that the cheque was given as security for a loan of ?8,000/- from Chhote Lal, not for the alleged loan of ?1,25,000/-. However, the appellant failed to provide sufficient evidence to rebut the presumption. The High Court noted the lack of documentary evidence, the failure to examine Chhote Lal, and the absence of any complaint about the lost cheque. The evidence provided by the appellant, including the testimony of Om Prakash, was deemed insufficient to rebut the presumption. 4. Legally Enforceable Debt and Income Tax Act Compliance: The appellant argued that the transaction was not reflected in the respondent's income tax returns, relying on the Bombay High Court's judgment in Sanjay Mishra, which held that unaccounted cash is not a legally enforceable liability. However, the High Court highlighted subsequent judgments, including Rangappa vs. Sri Mohan, which clarified that the presumption under Section 139 includes a legally enforceable debt. The High Court also referred to Krishna P. Morajkar, which disagreed with Sanjay Mishra, stating that non-disclosure in income tax returns does not render a debt irrecoverable. 5. Jurisdiction under Section 100 of the Code of Civil Procedure, 1908 (CPC): The High Court reiterated the limited scope of interference in Second Appeals under Section 100 CPC, emphasizing that it cannot re-evaluate evidence or findings of fact unless they are perverse or based on no evidence. The findings of the First Appellate Court were supported by evidence, and the High Court found no substantial question of law to justify further hearing. Conclusion: The High Court dismissed the appeal, concluding that it did not involve any substantial question of law and affirmed the First Appellate Court's judgment in favor of the respondent/plaintiff for the recovery of ?1,25,000/- with interest.
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