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Presumption under S139 of NI Act unsustainable if there is a failure to show the debt transaction in income tax return – Telangana High Court

The evidence placed on record by the complainant is not sufficient to prove the case against the accused beyond all reasonable doubt. Hence, the trial Court was perfectly justified in acquitting the accused. This was said in the case of R.Narender vs Yakamma Keloth Or Kalyan [CRIMINAL APPEAL No.2852 of 2018] by Justice G Sri Devi in the High Court of Telangana

The facts of the case date back to 12.09.2018, when the Special Magistrate acquitted the respondent for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881. Aggrieved by the judgment of the Trial Court, the appellant preferred the present Criminal appeal under Section 378 (4) of  Cr.P.C.

The appellant contended that since it is proved that the cheques have been signed and issued by the accused to the complainant, the trial Court shall raise a presumption to the effect that the said cheques have been issued towards discharge of legally enforceable debt. Secondly, it is contended that it is for the accused to rebut the said presumption and it is to be seen whether the accused could be successful in discharging the said burden. There is no plausible explanation from the accused why the cheques were signed and given by her to the complainant and therefore the accused failed to rebut the presumption without any iota of evidence

The respondent contended that the trial Court has rightly acquitted the accused on the ground that she had creditably rebutted the presumption and established her defense that the impugned cheques were issued for the purpose of security only, which can be evident from the terms and conditions stipulated in Ex.P6. Secondly, it is contended that the accused had aptly rebutted the presumption through her reply notice dated 01.02.2016, wherein it is clearly substantiated factum that she had neither instructed nor assured the complainant to present the said cheques. Thirdly, despite being an income tax payee, the appellant had failed to file any income tax returns to show that he had incurred the said expenditure

The Court referred to the case of Sanjay Mishra Vs. Ms. Kanishka Kappor @ Nikki and Another [CRIMINAL APPLICATION NO.4694 OF 2008] wherein it was said that, “If in a given case the amount advanced by the complainant to the accused is a large amount and is not repayable within few months, the failure to disclose the account in Income Tax return of the complainant may be sufficient to rebut the presumption under Section  139 of the Act.” Hence, in the present case the absence of any corroborative evidence regarding the debt transaction in the Income Tax return, the version of the complainant cannot be accepted at its face value as rightly pointed out by the Trial Court. 

The Court after perusing the materials available on record in the light of the above judgment opined that “the trial Court has rightly held that the accused was successful to rebut the presumption available to her under Section  139   of Negotiable Instruments Act and concluded that the evidence placed on record by the complainant is not sufficient to prove the case against the accused beyond all reasonable doubt and accordingly acquitted her”. Hence, the Criminal Appeal was dismissed.

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