A cash transaction exceeding Rs. 20,000 does not invalidate a legally enforceable debt under the Negotiable Instruments Act, which presumes a cheque pertains to such a debt upon acknowledgment of signature.

JUDGMENT :

SANJEEV KUMAR SHARMA, J.

1. Heard Mr. S.S.S. Rahman, learned counsel for the petitioner and Mr. S. Nawaz, learned counsel for respondent no.2.

2. This is an application under Section 528 of BNSS, 2023 has been filed by the petitioner, namely, Fokhoruddin Ali Ahmed, has prayed for quashing of the NICR Case No.04/2025, registered under Section 138 of N.I Act, 1881, pending before the learned Court of Chief Judicial Magistrate, Chirang.

3. The brief facts of the case are that a complaint case being N.I.C.R. Case No. 04/2025 was registered by the respondent against the petitioner under Section 138 of Negotiable Instrument Act, 1881 claiming enforceable liability of an amount of Rs. 10,00,000/-(Rupees Ten Lakhs Only) and the same is pending before the learned Court of Chief Judicial Magistrate, Chirang.

4. According to the learned counsel for the petitioner, the allegations made in the complaint are all false and that the petitioner has lost his SBI cheque book bearing the account number 30132028434 of Bortalowa Bazar. The loss of the Cheque book was duly reported by the son of the petitioner Shahanur Ahmed at Kajalgaon Police station and a General Diary Entry vide GDE No. 27 was registered on 15.10.2024 and in this regard the police gave a police report dated 08.04.2025, where it is clearly stated about the loss of the cheque book and the misuse of the said cheque book by the respondents and some other persons.

5. The learned counsel for the petitioner also submitted that after the loss of the cheque book bearing the account number 30132028434, an e- complaint was lodged on 04.04.2025 to the Assam Police Online Citizen Service on behalf of the petitioner by the petitioner's son, Sahanur Ahmed, as the petitioner was severely ill.

6. The learned counsel for the petitioner further submitted that the petitioner prior to the institution of the N.I.C.R. Case No. 04/2025 received a demand notice dated 07.12.2024 from one Jahir Abbas, Advocate claiming the payment of the amount of Rs. 10,00,000/-(Rupees Ten Lakhs Only) as enforceable liability and on receipt of the demand notice dated 07.12.2024, the petitioner through his learned advocate send a reply cum legal notice to the demand notice stating that all the allegations made therein are false. The reply to the demand notice was sent on 24.12.2024.

7. The learned counsel for the petitioner further submitted that in view of Section 269 of the Income Tax Act, amounts in excess of Rs.20,000/- are required to be paid by cheque or other means but not by cash and referred to a judgment of the Hon’ble Kerala High Court in P.C Hari Vs. Shine Varghese & Anr., reported in 2025 SCC Online Ker 5535.

8. The learned counsel for the petitioner has submitted that cash transactions above Rs.20,000/- in violation of Section 269 SS of the Income Tax Act does not constitute a legally enforceable debt under the N.I Act. Therefore, the complaint deserves to be quashed.

9. The learned counsel for the petitioner has also relied upon the following judgments which are as follows :

i) K.N. Beena Vs. Muniyappan & Anr., reported in (2001) SCC 458

ii) Sanjabij Tari Vs. Kishore S. Borcar & Anr. in Criminal Appeal No.1755 of 2010

iii) P.C Hari Vs. Shine Varghese & Anr., reported in 2025 SCC Online Ker 5535

10. In Sanjabij Tari (Supra), the Apex Court observed that the judgment of the Court in APS Forex Services Private Limited, only says that presumption under Section 139 of the N.I Act is rebuttable and when the same is rebutted, the onus would shift back to the complaint to prove his financial capacity, more particularly, when it is a c