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TMI Blog2009 (2) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... e was in need of financial assistance and she agreed to return the amount advanced within a period of three months to the 1st respondent. The applicant advanced a friendly loan of Rs. 15 lacs to the 1st respondent. She executed a hundi on 15th September, 2004 in the sum of Rs. 15 lacs and also issued a cheque dated 28th December, 2004 favouring the applicant. The said cheque was dishonoured and after issuing notice, the present complaint was filed by the applicant. The learned trial Judge passed an order of acquittal. The learned Judge held that the applicant has failed to establish that the cheque was issued by the 1st respondent in discharge of legal liability of the loan amount. The learned Judge observed that the 1st respondent has denied her signatures on the bill of exchange as well as the cheque subject-matter of the complaint. The learned Judge has taken into account various circumstances borne out by the evidence on record and has passed order of acquittal. The learned Judge also considered the admission of the applicant that the amount advanced was an unaccounted amount which was not disclosed to the Income Tax Authority. 4. The learned Senior Counsel appearing for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x. According to the case of the complainant, he had advanced loan on 14th September, 2004 which was repayable within 90 days. Thus, on 14th September, 2004 the amount allegedly paid by him to the 1st respondent was stated to be an unaccounted amount which was kept at the residence of the applicant. Moreover, till February, 2006, when the evidence was recorded, the said amount was not disclosed in the Income Tax Returns of the applicant. Thus it continued to be an unaccounted amount. 7. It is true that merely because amount advanced is not shown in Income Tax Return, in every case, one cannot jump to the conclusion that the presumption under Section 139 of the said Act stands rebutted. There may be cases where a small amount less than a sum of Rs. 20,000/- is advanced in cash by way of loan which may be repayable within few days or within few months. A complainant may not show the said amount in the Income Tax Return as it is repayable within few days or few months in the same financial year. In such a case the failure to show the amount in the Income Tax Return may not by itself amount to rebuttal of presumption under Section 139 of the said Act. If in a given case the amount adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e presumption under Section 139 of the said Act. Paragraphs 30 and 31 read thus: 30. The proviso appended to the said section provides for compliance with legal requirements before a complaint petition can be acted upon by a Court of law. Section 139 of the Act merely raises a presumption in regard to the second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge liability of any debt or other liability. 31. The courts below, as noticed hereinbefore, proceeded on the basis that Section 139 raises a presumption in regard to existence of a debt also. The courts below, in our opinion, committed a serious error in proceeding on the basis that for proving the defence the accused is required to step into the witness box and unless he does so he would not be discharging his burden. Such an approach on the part of the courts, we feel, is not correct. (Emphasis added) 10. Thus, what has been held by the Apex Court is that Section 139 of the said Act merely raises a presumption in regard to the second aspect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence. For the aforementioned purpose the nature of the offence, seriousness as also gravity thereof may be taken into consideration. The courts must be on guard to see that merely on the application of presumption as contemplated under Section 139 of the Negotiable Instruments Act, the same may not lead to injustice or mistaken conviction.... (Emphasis added) In paragraph 45 the Apex Court held thus: 45. We are not oblivious of the fact that the said provision has been inserted to regulate the growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters and to safeguard the faith of the creditor in the drawer of the cheque which is essential to the economic life of a developing country like India. This, however, shall not mean that the courts shall put a blind eye to the ground realities. Statute mandates raising of presumption but it stops at that. It does not say how presumption drawn should be held to have rebutted. Other important principles of legal jurisprudence, namely, presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of giving sanctity to the instruments of credit which could be deemed to be convertible into money and easily passable from one person to another. In the absence of such instruments, including a cheque, the trade and commerce activities, in the present day world, are likely to be adversely affected as it is impracticable for the trading community to carry on with it the bulk of the currency in force. The negotiable instruments are in fact the instruments of credit being convertible on account of legality of being negotiated and are easily passable from one hand to another. To achieve the objectives of the Act, the legislature has, in its wisdom, thought it proper to make such provisions in the Act for conferring such privileges to the mercantile instruments contemplated under it and provide special penalties and procedure in case the obligations under the instruments are not discharged. The laws relating to the Act are, therefore, required to be interpreted in the light of the objects intended to be achieved by it despite there being deviations from the general law and the procedure provided for the redressal of the grievances to the litigants-Efforts to defeat the objectives o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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