A Delhi Court in, Jagbeer Singh Vs. Rohit Kumar Sharma acquitted the accused upon unfulfillment of ingredients under Section 138(c) of the NI Act, 1881 where the primary questioned raised was regarding the non-reflection of the loan amount in ITR upon which the court said that it may not itself amount to a rebuttal of presumption under Section 139.
Facts
The complainant issued a friendy loan of 3lac on 6/4/15 and 2lac on 16/4/15 to the accused. The accused then gave a post-dated cheque dated 19/7/2016 for 5 lac in the discharge of his liability. When the complainant went to encash the cheque the cheque was returned with the remarks ‘insufficient funds’. A legal notice was thus sent upon which the accused denied any loan transaction and the said dishonored cheque was stolen from the accused’s place. Accused claimed that a complaint was filed by him upon the knowledge of such theft.
The witness of the transaction
The witness was a common friend who claimed that the above-mentioned transaction did take place and that he was present on both occasions. The witness further stated, the cheque in question was issued by the accused on 16.04.2015 and the name of the payee, amount and signature was already filled on the cheque in question by the accused, however, the cheque in question was undated when it was handed over to the complainant but denied the accusation of theft.
Accused’s Contention
Accused denied the fact that he took a loan from the complainant but he accepted the receipt of the legal notice. He further stated that he received a message from the bank regarding the presentation of the cheque and upon searching for the cheque book he found it missing and thereafter lodged a police complaint. But the complainant objected that the same was done after receiving the legal notice.
The accused further pointed out the inconsistencies within his statements. He even mentioned the non-reflection of the loan amount in ITR.
Court’s ruling
The Court firstly took into account the contradictory statement given by the complainant. Further, the court mentioned the point regarding the non-reflection of loans in ITR but said that failure to show the amount in the Income Tax Return may not by itself amount to a rebuttal of presumption under section 139 of NI Act. The court also questioned the advancement of the loan to a mere acquaintance without executing any documents. Furthermore, the complainant in examination in chief said that he gave the 5 lac in one shot whereas in cross-examination he said that the loan was given in two installments. Further, he has enough money in his account yet he took 5 lac in two installments. Moreover, the question raised was that why didn’t he transfer the money from his account. Other than that, the court pointed out to contrary statements of the accused. On one hand, the accused is contradicting his own statement and on the other hand complainant’s witness is stating facts opposite to what is averred by the complainant himself.
Upon perusal and establishment of fact that ingredients of Section 138(c) are missing the court finally ruled, “It is clear that the offence u/s 138 NI Act arises only when the drawer fails to make the payment to the payee, holder or holder in due course. Since, in the present case the complainant failed to prove that he is the holder/holder in due course, and that the cheque was actually drawn by the accused in his favour, therefore the elements of Section 138 NI Act are not made out”. The accused was thus acquitted.
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