THE COMMISSIONER OF INCOME TAX vs. M/S THE REDDI SAHAKARA BANK NIYAMITHA

The case of the complainant is that the accused was known to him for the last four to five years. The accused requested him to advance a hand loan of Rs.2,00,000/- (Rupees Two Lakhs only) for some legal necessity. The said amount of Rs.2,00,000/- (Rupees Two Lakhs only) was advanced in two installments in the month of November 2008. At the time of advancing the loan, the accused agreed to repay the loan within two

In order to establish the case, the complainant got examined himself as PW1 and got marked Exs.P1 to

The learned Magistrate by judgment dated 03.09.2013 passed in C.C. No.156/2011, held that the accused has committed an offence punishable under Section 138 of N.I. Act and accordingly convicted the accused for the offence punishable under Section 138 of N.I. Act and sentenced her to pay a fine of Rs.2,15,000/- in default of payment of fine to undergo S.I. for a period of six months. Out of the fine amount, a sum of Rs.2,10,000/- was directed to be paid to the complainant.

Aggrieved by the aforesaid judgment and order of conviction and sentence passed by the learned Magistrate, the accused preferred criminal Appeal No.118/2013 on the file of the Court of the II Addl. Sessions Judge at Mandya. The learned Sessions Judge by judgment dated 05.12.2014, allowed the said appeal and set aside the impugned judgment and order of conviction and sentence passed by the learned Magistrate and

Aggrieved by the aforesaid judgment and order of acquittal passed by the lower appellate court, the complainant has preferred the present appeal.

The contention of the learned counsel appearing for the appellant is that though the trial court having appreciated the entire evidence and material on record has convicted the accused for the offence punishable under Section 138 of N.I. Act, however, the lower appellate court without properly appreciating the reasons assigned by the trial court and also without properly appreciating the evidence and material on record, erroneously acquitted the accused. He contends that the accused and the complainant were known to each other for several years and a hand loan of Rs.2,00,000/- (Rupees Two Lakhs only) was advanced to the accused on her request and the accused has admitted the signature in the cheque and therefore, presumption under Section 139 of N.I. Act arises. The accused has failed to rebut the said

Per contra, the learned counsel appearing for the appellant/accused contends that the trial court neither applied its judicial mind nor appreciated the oral and documentary evidence in its proper perspective. The

The case of the complainant is that he and the accused are well known to each other for four to five years. The accused requested hand loan of Rs.2,00,000/- (Rupees Two Lakhs only) for the purpose of some legal necessity and accordingly the said amount of Rs.2,00,000/- (Rupees Two Lakhs only) was given in two installments. In this connection, the cheque bearing No.693178 dated 04.03.2009 drawn on Vysya Bank Limited, Jayalakshmipuram, Mysore Branch was issued to the complainant. When the said cheque was presented through his banker i.e., The Corporation Bank, Mandya Branch, the same came to be dishonored with an endorsement “account closed”. Though a demand notice issued to the accused asking her to make the payment, however, the accused by giving evasive reply, failed to make the payment within the stipulated period and therefore, the accused committed the offence punishable under Section 138 of N.I. Act.

According to the complainant, he paid the loan of Rs.2,00,000/- (Rupees Two Lakhs only) in two installments in the month of November 2008 and the accused agreed to repay the said loan within two months. The cheque in this regard was issued on 04.03.2009. The complainant has been examined as PW1. He has deposed that the accused was known to him for several years and in the month of November 2008, she approached him seeking a hand loan of Rs.2,00,000/- (Rupees Two Lakhs only) and in this connection, a cheque marked at Ex.P1 was issued by the accused. In the cross-examination, he has deposed that the amount of Rs.1,00,000 (Rupees One Lakh only) each was given to the accused in two installments i.e., on 09.11.2008 and 19.11.2008. He has admitted in the cross-examination that through his uncle one Sri. Srinivas, he came in contact with the accused. He admits that he has not stated in the notice or in the complaint as to when the loan was advanced to the accused. He further admitted that there are no other documents executed in connection with the said loan transaction.

The accused has been examined as DW1. She has deposed that she is a practicing doctor from past 19 – 20 years in various government hospitals. She had become a member in a chit business which was being run by one Chandru. The said chit business in the name and style of Sri. Manjunatha Chits was started on 01.03.2002 in Arakere, Mandya District. She was paying Rs.6,700/- every month and the total chit amount was Rs.2,01,000/-. On 15.03.2002, she took the chit amount of Rs.1,15,900/- in the bid after deducting Rs.85,100/-. On the same day, the said amount of Rs.1,15,900/- was received from her. In the said transaction, she had given two blank cheques with her signature. She has further deposed that she had paid the full amount of the said chit transaction. Thereafter, the said Chandru again started one more chit on 03.05.2005 and she became a member in the said chit. Again, she received an amount of Rs.83,000/- on 03.05.2005 after deducting the bid amount of Rs.67,000/-. In the said chit transaction also, she gave two blank cheques drawn (bearing No.693178 & 693179) on Vysya

It is the defense of the accused that one of the Cheque i.e., cheque in question (bearing No.693178) drawn on Vysya Bank, Jayalakshmipuram, Mysore Branch, which was given as a security for the said chit transaction between herself and Chandru was misused by the said Chandru. She has deposed in her evidence that in the chit transaction, one person by name Dhananjaya was also a member. He had filed a criminal case against her for the alleged offence punishable under Section 138 of N.I. Act for misusing another cheque issued in favour of Chandru. However, the said case ended in acquittal.

According to the accused, the complainant is a total stranger to her and at no point of time, she has taken money from the complainant and therefore, there is no question of issuing cheque to the complainant. It is her specific case that there was no need for her to take hand loan of Rs.2 Lakhs from the complainant and there was no legally enforceable debt.

Ex.P6 is the reply given by the accused to the demand notice issued by the complainant. She has specifically denied of having borrowed any amount from the complainant. In the said reply, she has stated that during the year 2001-02, she had a chit transaction with one Chandru, resident of Arakere, Mandya District and while receiving the chit amount, signed cheques and other documents were given to the said person. After 2006, it came to her knowledge that the said Chandru had misused the Cheque which was in his possession. It also came to her knowledge that some of the cheques which had been given to Chandru was misused by others.

The defence of the accused is consistent. According to the complainant, on 09.11.2008 and on 19.11.2008, a sum of Rs.1,00,000/- (Rupees One Lakh only) each was advanced to the accused as loan. The cheque is dated 04.03.2009. There are no other documents in support of the loan transaction between the complainant and the accused. Though the complainant has claimed that he was an income tax assessee, however, no documents to show that he was an income tax assessee is forthcoming. The cheque at Ex.P1 had been issued after more than three months from the date of alleged loan transaction. According to PW1, he came in contact with the accused through his uncle one Sri. Srinivas. PW1 has specifically deposed that he has no personal information about the accused. This shows that the accused is not familiar to the complainant. This being the case, it is difficult to believe that a sum of Rs.2,00,000/- (Rupees Two Lakhs only) was advanced without any documents in this regard. It is an admitted fact that at the time of advancing the loan amount, no cheque is received and the

Though the presumption is available to the complainant as per Section 139 of N.I. Act, however, in the present case, the accused is able to rebut the said presumption. The contention of the complainant that the cheque at Ex.P1 was issued in his favour towards legal enforceable debt is not substantiated by adducing convincing evidence before the trial court.

The complainant has failed to prove the case beyond all reasonable doubts. The reasons assigned by the learned Sessions Judge cannot be said to be illegal or perverse. The learned Sessions Judge having considered