The courts upheld the presumption of legally enforceable debt under the Negotiable Instruments Act in the absence of sufficient rebuttal by the accused.

ORDER

This Criminal Revision Case has been filed by the petitioners/accused to set aside the conviction and sentence dated 29.02.2024 made in C.A.No.274 of 2022 dated 29.02.2024 on the file of the III Additional District and Sessions Court, Gobichettipalaym confirming the conviction and sentence made in S.T.C. No.920 of 2017 dated 29.11.2022 on the file of the Judicial Magistrate No.1, Gobichettipalayam and sentencing the petitioners to undergo simple imprisonment for one year and to pay a compensation of Rs.6,00,000/- to the respondent/complainant.

2. The case of the petitioners is that the respondent/complainant filed a private complaint against the petitioners for the offence under Sections 138 of the Negotiable Instruments Act before the Judicial Magistrate No.1, Gobichettipalayam in STC No.920 of 2017. The learned Magistrate after enquiry, found the petitioners guilty for the offence under Section 138 of the Negotiable Instruments Act and convicted and sentenced for the 2nd petitioner to undergo one year simple imprisonment and directed the petitioners to pay Rs.6 lakhs as compensation to the respondent/complainant. Challenging the same, the petitioners filed an appeal in C.A.No.274 of 2022 before the III Additional District and Sessions Court, Gobichettipalaym. The learned appellate Judge, after hearing the arguments found that the petitioners have committed the offence under Section 138 of the Negotiable Instruments and thereby, dismissed the appeal by judgment dated 29.02.2024 and confirmed the judgment of conviction and sentence passed by the trial Court. Aggrieved by the same, the petitioners have filed the present revision.

3. The case of the respondent/complainant is that the 1st petitioner is a partnership firm and the 2nd petitioner is the partner of the 1st petitioner/partnership firm. The 2nd petitioner had borrowed a sum of Rs.6 lakhs from the respondent for business purpose for the 1st petitioner/partnership firm on 20.03.2017 and for repayment of the said amount, had issued a post dated cheque bearing Cheque No.001287 dated 21.04.2017. Thereafter, when the respondent presented the said cheque for collection in his bank namely State Bank of Mysore, Gobichettipalayam on 21.04.2017, the cheque was returned for the reason that the account of the 2nd petitioner was blocked. The same was not informed to the petitioners through statutory notice dated 13.05.2017 which was received by the petitioners on 16.05.2017. However, they neither repaid money nor sent any reply. Hence, the respondent was constrained to invoke Section 138 of the Negotiable Instruments Act and Section 420 of IPC and filed a private complaint before the jurisdictional Magistrate.

4. The contention of the petitioners is that they never borrowed any money from the respondent and issued any cheque to the respondent. The Courts below failed to consider that the respondent had not filed his IT returns.

As per the income tax rules, cash transaction for more than Rs.20,000/- has to be done only through bank and therefore, the money alleged to have been lent to the petitioners by the respondent, is not a legally enforceable debt. Further, no material was produced by the respondent to show that he lent such a huge amount to the petitioners. More over, the cheque was returned only for the reason of "account blocked" by the Bank and it was not returned for the reason funds insufficient. Even on the said date i.e. 21.04.2017, a sum of Rs.14 lakhs was in the account of the petitioners. Therefore, the offence und