Nitish Banka

    • Friendly loan in cash in cheque bounce cases

    Sometimes in usual course of business blank cheques are handed over to trusted persons and the cheques are often misused by these persons under the guise a friendly loan is given to the accused.

    Now this amount as shown by the complainant is in cash and since its a friendly loan no paper work is done.

    But since burden to prove that the cheque was not issued as a legally enforceable debt is on the accused in cheque bouncing case then how he will discharge this burden is the main ground.

    Cross examination is an opportunity granted to the accused in such cases as well as his statement under 313 CrPC

    Image result for cheque bounce

    In cross examination following questions must be put up-:

    1. Have you withdrawn the money from the bank ? if the accused has  in fact given a loan to the accused person he must have withdrawn such money from the bank. if the answer is no there will be no record of such transaction.
    2. If the amount is above Rs. 20000/- an dis in cash it is hit by section 269SS of income tax and is a transaction prohibited by law. for this just as have you paid money all in cash?
    3. Have you signed any acknowledgement of debt from the accuse? since its a friendly loan no record was available for this?
    4. Have you shown this amount in ITR? If he produces ITR and balance sheet then ask for the basis on which he has mentioned loan against the accused in balance sheet when no document in support of transaction is there. If the complainant does not produce the ITR then the cash is black money and again rebutting the presumption of legally enforceable debt.

    As held in Sanjay Mishra vs Ms.Kanishka Kapoor The learned Judge held that the applicant has failed to establish that the cheque was issued by the 1st respondent in discharge of legal liability of the loan amount. The learned Judge observed that the 1st respondent has denied her signatures on the bill of exchange as well as the cheque subject matter of the complaint. The learned Judge has taken into account various circumstances borne out by the evidence on record and has passed order of acquittal. The learned Judge also considered the admission of the applicant that the amount advanced was an unaccounted amount which was not disclosed to the Income Tax Authority.

    Therefor recovery of black money is impermissible in law.

    Advocate Nitish Banka

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