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Section 138 NI Act: Non-Filing Of I-T Returns Does Not Mean That The Complainant Had No Source Of Income :

Courtesy/By: Sakshi Shukla | 23 Mar 2019

The Madhya Pradesh High Court has observed that mere non-filing of Income Tax Return would not automatically dislodge the source of income of the complainant in a cheque bounce case under Section 138 of the Negotiable Instruments Act. The case of the complainant was that the accused had obtained a loan of Rs.10, 00,000 from him and assured that she would refund the said amount within a period of six months. In lieu of the said amount, she issued a cheque which got dishonoured. The accused was convicted by the Trial court, which was later upheld by the District Court.

The bench observed that the courts below were right in holding that the cheque was issued by the accused in discharge of legal liability which was returned by the Bank on her instructions. Where the accused has failed to satisfactorily explain the circumstances under which the cheque was issued by the accused or misused by the complainant, then it can be safely inferred/ presumed that the cheque was issued in discharge of legally recoverable dept/liability, the court added.

Courtesy/By: Sakshi Shukla | 23 Mar 2019