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RAJASTHAN HIGH COURT BENCH AT JAIPUR
Birendra Kumar, J.
Deepak Garg - Appellant
Versus
State of Rajasthan, Through P. P. & Ors. - Respondents
S.B. Criminal Miscellaneous (Petition) No. 6897 of 2022
Decided On : 05-05-2023
Quashment - FIR - IPC Section 420, Negotiable Instruments Act Sections 138, 139, Income Tax Act Sections 269ST, 269SS - The court quashed the FIR based on the presumption of liability under the Negotiable Instruments Act, highlighting the burden of proof on the accused and the implications of illegal cash transactions under the Income Tax Act.
Fact of the Case:
The petitioner sought to quash an FIR for cheating, claiming it was filed maliciously after a prior complaint regarding dishonored cheques. The respondent alleged fraud related to a loan and the misuse of cheques as security.
Finding of the Court:
The court found that the FIR was based on bald allegations and that the respondent had admitted to signing the cheque, thus shifting the burden of proof to him. The court also noted the respondent's violations of the Income Tax Act.
Issues: Whether the FIR was maliciously instituted and whether the petitioner could be prosecuted based on the allegations made by the respondent.
Ratio Decidendi: The court held that the presumption under Section 139 of the Negotiable Instruments Act places the burden on the accused to prove otherwise, and that the FIR could not stand due to the respondent's own admissions and illegal cash transactions.
Result: The FIR and subsequent proceedings were quashed.
JUDGMENT
1. Heard.
2. The petitioner has sought for quashment of FIR No. 290/2021 registered with Kotwali Police Station, Alwar at the behest of respondent No.2 for offence under Section 420 IPC.
3. The challenge is on the ground that the impugned FIR has been maliciously instituted to wreck vengeance.
4. Learned counsel for the petitioner submits that the background of the impugned FIR is a complaint case filed by the petitioner against respondent No.2 on 11.2.2021, wherein, cognizance was taken on 4.8.2021 against respondent No.2 for offence under Section 138 of The Negotiable Instruments Act. Respondent No.2 got bail in that case on 19.1.2022. Case of the petitioner in the aforesaid complaint case is that the complainant is engaged in the business of sale of jewellery whereas respondent No.2 is engaged in business of brick kiln. Both were known to each other. On 3.12.2020, respondent No.2 purchased gold jewellery worth Rs. 20,07,975/- vide sale cum tax invoice at Annexure-2. Respondent No.2 issued cheque No. 000546 of Rs. 20,07,975/- as payment of cost of jewellery. The date of cheque was put as 4.12.2020 on the cheque. Later on, respondent No.2 informed the petitioner to present the cheque for encashment after 10 days as the account has insufficient funds. The petitioner sent message on 9.12.2020 to respondent No.2 that he is going to present the cheque to the bank. Respondent No.2 submitted a return Whatsapp reply, a copy of the same is at Annexure-4 stating therein that respondent No.2 is suffering from financial crunch and after restitution of business after Corona effect, he would ensure payment. The petitioner presented the cheque on 16.12.2020 to the Bank and the Bank reported (vide Annexure-5) that the cheque cannot be honoured as the fund is insufficient in the account of respondent No.2. Thereafter, the petitioner informed to respondent No.2 about dishonour of the cheque and respondent No.2 assured the petitioner to wait till 4.1.2021, when respondent No.2 would make the payment of the cheque amount, failing which, the petitioner would be at liberty to initiate legal proceedings. On failure to make payment, registered legal notice was sent and on no response, complaint was filed as stated hereinabove wherein cognizance was already taken.
5. Thereafter on 17.2.2021, respondent No.2 filed a complaint case which was subsequently registered as impugned FIR No. 290/2021 on its transmission by the learned Magistrate under Section 156(3) Cr.P.C.
6. The impugned FIR reveals that since the parties were known to each other very well, respondent No.2 took loan of Rs. 3,00,000/- in cash in February, 2017 from the petitioner and issued two cheques (one of the same was cheque No. 000546) in favour of the petitioner as security to ensure payment of the aforesaid loan amount of Rs. 3,00,000/-. The two cheques were only signed by respondent No.2 and cheques were blank otherwise. Respondent No.2 had handed over two blank letter pads of Diksha Bricks also whereof respondent No.2 was the proprietor. The letter heads were duly stamped. In between 6.3.2017 to 13.8.2017, respondent No.2 supplied bricks to the petitioner on request and the total cost of the bricks was 2,43,600/-. Rest amount out of Rs. 3,00,000/- i.e. 56,400/- was paid in cash to the petitioner. However, the petitioner did not return the two cheques immediately and said that he will search out those cheques in the house and thereafter would hand over the same. The petitioner with dishonest intention, fraudulently filled up one of the cheque and produced it before the Bank, the said cheque got dishonoured. For the fraudulent act aforesaid, the impugned FIR has been lodged.
7. Learned counsel for the petitioner submits that even if the complainant's statement is assumed to be correct, the complainant has admitted that he had signed the cheques but fraud was committed in filling up those cheques and presenting the same before the Bank. Learned counsel contends that in the aforesai
The statutory presumption under Sections 138 and 139 of the Negotiable Instruments Act establishes that the accused must rebut the existence of a debt with credible evidence; mere denial is insuffici....
A presumption of debt exists under Sections 138 and 139 of the Negotiable Instruments Act, which the accused failed to rebut, affirming liability for dishonored cheques.
Presumption under Section 139 of the Negotiable Instruments Act requires the accused to present credible evidence to rebut the holder's claim of legal liability regarding the cheque issued.
A drawer of a cheque is presumed liable unless they provide evidence to rebut the presumption of issuance for debt repayment, established under Sections 138 and 139 of the Negotiable Instruments Act.
Point of Law : Dishonour of Cheque – Acquittal under - complainant has failed to prove even the execution of the cheque since his very specific case that it was a cheque written using a pen in his pr....
The court determined that under Sections 138 and 139 of the Negotiable Instruments Act, the presumption that a cheque was issued to discharge a debt is rebuttable, placing the burden on the accused t....
A drawer of a cheque may incur liability under Section 138 of the Negotiable Instruments Act unless they can sufficiently rebut the statutory presumptions of consideration and debt.
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