PRINCIPAL COMMISSIONER OF INCOME TAX vs. M/S AJMER VIDYUT VITRAN NIGAM LIMITED

2025:CGHC:15554

NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR ACQA No.161 of 2019 Anirudha Rathore S/o Mahavir Rathore Aged About 35 Years R/o Village- Ward No.5, Main Road Khokhra, Thana And Tahsil- Janjgir, District- Janjgir- Champa, Chhattisgarh. ... Appellant/Complainant versus 1 - Sanichram Yadav S/o Ramadhar Yadav Aged About 19 Years R/o Ward No. 19, Indra Nagar, Behind Sharda Manglam, Janjgir, Thana And Tahsil- Janjgir, District- Janjgir- Champa, Chhattisgarh....(Accused) 2 - State Of Chhattisgarh Through District- Magistrate, District- Janjgir- Champa, Chhattisgarh. ... Respondents For Appellant : Shri Anurag Verma, Advocate. For Respondent No.1 : Shri Vishwanath Shrivas, Advocate. For Respondent No.2/State : Shri Arvind Dubey, G.A. Hon'ble Shri Justice

Deepak Kumar Tiwari

Judgment on Board 02.04.2025 1. This Acquittal Appeal is directed against the judgment and order dated 13.04.2017 passed by the Sessions Judge, District Janjgir- Digitally signed by SISTLA NEELIMA VISHNU PRIYA Date: 2025.04.04 10:54:01 +0530

2 Champa in Criminal Appeal No.09/2017 whereby, while allowing the Appeal, Respondent No.1/accused has been acquitted under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the NI Act') against the judgment dated 23.01.2017 passed by the JMFC, Nawagarh, District Janjgir-Champa in Criminal Case No.566/2016. 2. As per the complaint, on 03.08.2015, Respondent No.1/accused has taken loan of Rs.5 lacs for the purpose of domestic use and for repayment of the same, issued a cheque bearing No.791751 dated 27.10.2015 (Ex.P-1) and when the Appellant/Complainant has presented the same before Bank of Badoda, Branch Janjgir-Champa for encashment, it was dishonoured on 28.10.2015 with an endorsement "fund insufficient". Thereafter, the Appellant/Complainant sent a legal notice dated 20.11.2015 to Respondent No.1/accused, who has received it on 24.11.2015 and even after receiving the same, he failed to pay the said amount, therefore, a complaint has been preferred by the Appellant/complainant. 3. In order to prove his case, the Appellant/Complainant has examined himself and one Bhim Singh (CW-2) and exhibited 5 documents i.e. Cheque (Ex.P-1), deposit slip (Ex.P-2), notice received for dishonour of cheque from the Bank (Ex.P-3), acknowledgment (Ex.P-4) and postal receipt (Ex.P-5). Respondent No.1/accused has abjured his guilt and in the statement recorded under Section 313 Cr.P.C, has stated that he has been falsely implicated in the case and the Complainant has taken a blank cheque from him for providing the loan.

3 4. After evaluation of evidence, learned JMFC, Nawagarh has convicted Respondent No.1/accused under Section 138 of the NI Act and awarded sentence of simple imprisonment for a period of 6 months and imposed fine of Rs.5,000/- with usual default stipulations against which, he has preferred an Appeal before the Sessions Judge, Janjgir- Champa, which has been allowed by the impugned judgment. Hence, this Acquittal Appeal has been preferred by the Complainant/Appellant herein. 5. Learned Counsel for the Appellant/Complainant submits that the appellate court has committed an error in acquitting Respondent No.1/accused and the trial Court has not appreciated the evidence in its proper perspective and has wrongly given its finding based on the point that the Appellant has failed to prove his source of income, which was necessary to be proved. He placed reliance on the judgment rendered in the matter of P. Rasiya v. Abdul Nazer and Anr. reported in 2022 SCC OnLine SC 1131 and submits that as a legal notice has been sent, therefore, presumption has to be drawn that service of notice has been affected and for the same, he further placed reliance on Ajeet Seeds Limited vs. K. Gopala Krishnaiah ; (2014) 12 SCC 685. He further submits that Respondent No.1/accused has not denied his signature on the cheque, therefore, there is a legal presumption against him under Section 138 of the NI Act. He submits that as both the accused and the complainant were known to each other and had a good relation, therefore, in such circumstances, the appellate Court has wrongly created doubt with regard to the existence of debt or liability and for

4 such proposition, he placed reliance on the matter of Kishan Rao vs. Shankar Gouda reported in (2018) 8 SCC 165 and lastly submits that considering the aforesaid backdrop, the Appeal may be allowed. 6. On the flip side, learned Counsel for Respondent No.1/accused submits that in order to succeed a charge under Section 138 of the NI Act, the Appellant/Complainant ought to prove that he has sent a legal notice to him making a demand for payment of cheque amount. He further submits that in the present case, the legal notice has not been proved and the Appellant/Complainant himself, at para-10 of his statement, has accepted the said fact. He further submits that the Complainant was drawing salary of Rs.9,000/- per month while working as a clerk under one Sajan Agrawal, Contractor, therefore, the appellate Court has rightly drawn a conclusion that he has failed to prove that he was having sufficient funds for extending the said loan and as such, a valid consideration has been passed and in such backdrop, the judgment is well merited and does not call for any interference. 7. Heard learned Counsel for the parties and perused the entire record along with the annexed documents with utmost care. 8. To attract the offence under Section 138 of the NI Act, three ingredients are necessary viz: (i) that there is a legally enforceable debt; (ii) that the cheque was drawn from the account of Bank for discharge in whole or in part of any debt or liability which presupposes a legally enforceable debt; and (iii) that the cheque so issued had been returned due to insufficiency of funds. As per proviso (b) to Section 138 of NI Act, the payee or the holder in due course of the cheque, as the case

5 may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the Bank regarding the return of the cheque as unpaid and if the Complainant has failed to comply with the said proviso, no offence under Section 138 could be made out. 9. In the instant case, the appellate Court has rightly observed that the said legal notice has not been proved during trial and the Complainant himself has, at para-10 of his cross-examination, clearly admits that copy of the notice sent by his Advocate has not been filed by him. 10. In the matter of Krishna Janardhan Bhat vs. Dattatraya G. Hegde reported in (2008) 4 SCC 54, it was held that the courts below failed to notice that ordinarily in terms of Section 269-SS of the Income tax Act, any advance taken by way of any loan of more than Rs.20,000/- was to be made by way of an account payee cheque only and Section 271-D of the said Act is relevant here, which reads as under:- "Penalty for failure to comply with the provisions of Section 269-SS-(1) If a person takes or accepts any loan or deposit in contravention of the provisions of Section 269-SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted." 11. In the said matter, it has been observed that statute mandates raising of presumption but it stops at that. It does not say how presumption drawn should be held to have rebutted. it has been further observed therein that other important principles of legal jurisprudence, namely presumption of innocence as human rights and the doctrine of

6 reverse burden introduced by Section 139 should be delicately balanced. Such balancing acts, indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same. 12. Looking to the aforesaid legal principles and taking into consideration the facts and circumstances of the present case wherein, the Complainant was drawing salary of Rs.9,000/- per month and has stated that in the year 2013, he sold certain ancestral land and received the sale amount and considering the entire evidence available on record, this Court is of the view that the learned appellate Court has rightly disbelieved the present case for the consideration advanced by the Complainant to the accused. In the aforesaid circumstances, without any interest or execution of any document, this Court does not find any illegality or infirmity in the judgment of acquittal passed by the learned 1st appellate Court, therefore, no interference is required. 13. Accordingly, the Appeal fails and is hereby dismissed. Sd/- (Deepak Kumar Tiwari) JUDGE Priya