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2019 (9) TMI 785 - HC - Indian LawsDishonor of cheque - insufficiency of funds - failure to repay borrowed amount - Section 138 of the Negotiable Instruments Act - acquittal of accused - HELD THAT - In the case at hand, though probable defence with regard to capacity of the complainant to lend money appears to have been taken very casually because, if statement of the accused recorded under S.313 CrPC as well as suggestions put to the complainant during his cross-examination are perused, same clearly suggest that the main defence of the accused is/was that she issued cheque as security, but even if such defence is tested on the basis of evidence led on record by respective parties, same deserves outright rejection - In the case at hand, careful perusal of the complaint filed by complainant under S.138 clearly suggests that he set up a case that he, after having arranged money from his friends namely Raju and Stephen Deen, gave it to the accused. There is no suggestion with regard to capacity of complainant to lend money, who otherwise is a Government employee. Complainant s assertion made in examination-in-chief that he is working as a Carpenter in MES at Jutogh and drawing salary of ₹ 33,000/- per month, remained totally un-shattered, because at no point of time, suggestion, if any, qua aforesaid aspect of the matter came to be put to the complainant. Hon'ble Apex Court in Rohitbhai Jivanlal Patel vs. State of Gujarat Anr , 2019 (3) TMI 769 - SUPREME COURT , has held that in view of statutory presumptions as contemplated under Ss.118 and 139 of the Act, onus is shifted upon the accused and unless accused discharges said onus by leading evidence on record as to show preponderance of probabilities tilting in his favour, complainant s case cannot be disbelieved for want of evidence regarding source of funds for advancing as loan to the accused. In the case at hand, accused has not been able to rebut the statutory presumption under Ss.118 and 139 of the Act in favour of holder of cheque i.e. complainant and as such, there appears to be no illegality or infirmity in the judgments/order of conviction and sentence passed by learned Courts below - All the ingredients of S.138 of the Act stand duly proved in the case at hand, as such, this Court finds no occasion to interfere with the judgments/order of conviction and sentence recorded by learned Courts below, as such, same deserve to be upheld. Petition dismissed.
Issues Involved
1. Legally enforceable debt under Section 139 of the Negotiable Instruments Act. 2. Examination of friends who allegedly lent money to the complainant. 3. Loan advancement in violation of Section 269SS of the Income Tax Act. 4. Non-disclosure of the loan in the complainant's Income Tax Return. 5. Re-appreciation of evidence by the trial court after remand. 6. Issuance of cheque as security versus discharge of lawful liability. 7. Capacity of the complainant to lend money. Issue-Wise Detailed Analysis 1. Legally Enforceable Debt under Section 139 of the Negotiable Instruments Act: The court reaffirmed that Section 139 of the NI Act mandates a presumption that the cheque was issued for the discharge of any debt or liability, unless the contrary is proved. The accused admitted to issuing the cheque and did not dispute the signatures, thus invoking the presumption under Sections 118 and 139 in favor of the complainant. The court cited the Hon'ble Apex Court's ruling in *Hiten P. Dalal v. Bartender Nath Bannerji*, emphasizing that the presumption must be rebutted by proof, not mere plausible explanations. 2. Examination of Friends Who Allegedly Lent Money to the Complainant: The complainant testified that he borrowed money from friends to lend to the accused. The court noted that no suggestion was made during cross-examination regarding the source of money, and the complainant's testimony remained unchallenged. The accused failed to examine these friends or provide evidence to counter the complainant's claims. 3. Loan Advancement in Violation of Section 269SS of the Income Tax Act: The defense argued that the loan was advanced in violation of Section 269SS of the IT Act, making it non-recoverable. However, the court did not find this argument sufficient to rebut the presumption under Section 139 of the NI Act. 4. Non-disclosure of the Loan in the Complainant's Income Tax Return: The defense also argued that the loan was not shown in the complainant's Income Tax Return. The court held that this alone does not rebut the statutory presumption under Sections 118 and 139 of the Act, especially when the issuance of the cheque and the signatures were admitted. 5. Re-appreciation of Evidence by the Trial Court after Remand: The court held that the trial magistrate was within its jurisdiction to re-appreciate the evidence after the case was remanded for fresh consideration. The court had earlier set aside the acquittal, noting that the trial magistrate had not correctly applied the law. The re-evaluation of evidence was necessary and lawful. 6. Issuance of Cheque as Security versus Discharge of Lawful Liability: The accused claimed the cheque was issued as security, not for a lawful liability. However, the court found no evidence to support this claim. The complainant's testimony and the lack of a reply to the legal notice strengthened the presumption that the cheque was issued for a legally enforceable debt. The court cited the Hon'ble Apex Court's decision in *M/s Laxmi Dyechem vs. State of Gujarat* to support this conclusion. 7. Capacity of the Complainant to Lend Money: The court found that the complainant, a government employee earning ?33,000 per month, had the capacity to lend the money. The defense did not effectively challenge this during cross-examination. The court referenced the Hon'ble Apex Court's rulings in *Basalingappa vs. Mudibasappa* and *Rohitbhai Jivanlal Patel vs. State of Gujarat & Anr*, which emphasize that the burden shifts to the accused to disprove the complainant's financial capacity once the statutory presumption is invoked. Conclusion The court dismissed the petition, upholding the judgments of the lower courts. The accused was directed to surrender and serve the sentence. The court found no merit in the arguments presented by the defense and concluded that the statutory presumption under Sections 118 and 139 of the NI Act was not rebutted. All pending applications were disposed of, and bail bonds were canceled.
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