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Time of India
4 days ago
- Business
- Time of India
Debt by cash transactions of over Rs 20,000 not legally enforceable: Kerala HC
The Kerala High Court on Friday declared that a debt created by a cash transaction of above Rs 20,000 in violation of the Income Tax Act is not a " legally enforceable debt " unless there is a valid explanation for the same. Justice P V Kunhikrishnan made the declaration while allowing a plea for setting aside the conviction and sentence of a man accused in a cheque dishonor case . Explore courses from Top Institutes in Please select course: Select a Course Category Others Management Technology CXO Data Analytics Product Management Digital Marketing Leadership Artificial Intelligence Data Science healthcare Public Policy Operations Management Cybersecurity MBA Degree MCA others Finance Data Science Project Management PGDM Skills you'll gain: Duration: 28 Weeks MICA CERT-MICA SBMPR Async India Starts on undefined Get Details Skills you'll gain: Duration: 7 Months S P Jain Institute of Management and Research CERT-SPJIMR Exec Cert Prog in AI for Biz India Starts on undefined Get Details Skills you'll gain: Duration: 16 Weeks Indian School of Business CERT-ISB Transforming HR with Analytics & AI India Starts on undefined Get Details Skills you'll gain: Duration: 9 months IIM Lucknow SEPO - IIML CHRO India Starts on undefined Get Details The accused was sentenced to one year and imposed with a fine of Rs 9 lakh by a sessions court for the offence of dishonour of cheque due to insufficiency of funds in the account under section 138 of Negotiable Instruments (NI) Act. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Animal Advocate Begs: Never Do This With A Senior Dog ExpertsInPetHealth Learn More Undo In his appeal in the High Court against the sessions court decision, the accused claimed that as the amount of Rs 9 lakh given to him by the complainant was in cash, it was an illegal transaction according to the Income Tax laws. "Therefore, a debt created by an illegal transaction cannot be treated as a legally enforceable debt," the accused had claimed. Live Events Agreeing with the accused's contention, Justice Kunhikrishnan said that if a criminal court "indirectly legalises such illegal transactions in violation of the IT Act" by treating them as a legally enforceable debt, it will be against the aim of the country to discourage cash transactions above Rs 20,000. The High Court said that discouraging cash transactions above Rs 20,000 was also "a part of the 'digital India' dream of our country, which is propounded by our Prime Minister to save our economy and to curb a parallel economy in our country". "If the debt arises through an illegal transaction, that debt cannot be treated as a legally enforceable debt. If the court regularises such transactions, that will encourage illegal transactions by the citizens. Even black money will be converted into white money through the criminal courts," the High Court said. It further said that in such cases the accused should challenge such transactions in evidence and has to rebut the presumption under section 139 of the NI Act that "the holder of a cheque received it for the discharge of a debt or other liability". In the instant case, the accused had rebutted the presumption by claiming that the complainant does not have the source to loan out Rs 9 lakh and therefore, the debt alleged to be due to him cannot be treated as a legally enforceable one, the HC said. It allowed the accused's revision petition and acquitted him by setting aside his conviction and sentence by the lower court. The High Court said if anybody pays an amount in excess of Rs 20,000 to another person by cash in violation of the IT Act and thereafter receives a cheque for that debt, he should take responsibility to get back the amount, unless there is a valid explanation for such cash transactions. "If there is no valid explanation in tune with provisions of the IT Act, the doors of the criminal court will be closed for such illegal transactions," the HC said. It also made it clear that its findings would be prospective in nature.
News18
4 days ago
- Politics
- News18
Debt by cash transactions of over Rs 20,000 not legally enforceable: Kerala HC
Kochi, Jul 25 (PTI) The Kerala High Court on Friday declared that a debt created by a cash transaction of above Rs 20,000 in violation of the Income Tax Act is not a 'legally enforceable debt" unless there is a valid explanation for the same. Justice P V Kunhikrishnan made the declaration while allowing a plea for setting aside the conviction and sentence of a man accused in a cheque dishonor case. The accused was sentenced to one year and imposed with a fine of Rs 9 lakh by a sessions court for the offence of dishonour of cheque due to insufficiency of funds in the account under section 138 of Negotiable Instruments (NI) Act. In his appeal in the High Court against the sessions court decision, the accused claimed that as the amount of Rs 9 lakh given to him by the complainant was in cash, it was an illegal transaction according to the Income Tax laws. 'Therefore, a debt created by an illegal transaction cannot be treated as a legally enforceable debt," the accused had claimed. Agreeing with the accused's contention, Justice Kunhikrishnan said that if a criminal court 'indirectly legalises such illegal transactions in violation of the IT Act" by treating them as a legally enforceable debt, it will be against the aim of the country to discourage cash transactions above Rs 20,000. The High Court said that discouraging cash transactions above Rs 20,000 was also 'a part of the 'digital India' dream of our country, which is propounded by our Prime Minister to save our economy and to curb a parallel economy in our country". 'If the debt arises through an illegal transaction, that debt cannot be treated as a legally enforceable debt. If the court regularises such transactions, that will encourage illegal transactions by the citizens. Even black money will be converted into white money through the criminal courts," the High Court said. It further said that in such cases the accused should challenge such transactions in evidence and has to rebut the presumption under section 139 of the NI Act that 'the holder of a cheque received it for the discharge of a debt or other liability". In the instant case, the accused had rebutted the presumption by claiming that the complainant does not have the source to loan out Rs 9 lakh and therefore, the debt alleged to be due to him cannot be treated as a legally enforceable one, the HC said. It allowed the accused's revision petition and acquitted him by setting aside his conviction and sentence by the lower court. The High Court said if anybody pays an amount in excess of Rs 20,000 to another person by cash in violation of the IT Act and thereafter receives a cheque for that debt, he should take responsibility to get back the amount, unless there is a valid explanation for such cash transactions. 'If there is no valid explanation in tune with provisions of the IT Act, the doors of the criminal court will be closed for such illegal transactions," the HC said. It also made it clear that its findings would be prospective in nature. PTI HMP HMP ROH view comments First Published: July 25, 2025, 18:00 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Time of India
28-04-2025
- Time of India
Fake politician held for duping shop owner of 85K
1 2 3 Pune: Baner police on Sunday night arrested an electrician from Indapur on the charge of cheating an eyewear shop at Baner Phata near Katraj-Dehu road bypass of Rs85,271 on April 20 by posing as a 'politician'. Senior inspector Chandrashekar Sawant of Baner police told TOI, "We arrested Siddhant Patil alias Zende (37) of Mhasobachiwadi in Indapur on charge of purchasing high-value eyewear of different brands worth Rs85,271 from the shop in exchange for payment by cheque that was later returned by the bank due to insufficient balance." You Can Also Check: Pune AQI | Weather in Pune | Bank Holidays in Pune | Public Holidays in Pune "The shopkeeper, Adinath More (24), approached us with his complaint on Sunday afternoon. Zende, who cleared his HSC examinations, entered the shop wearing a starched white shirt and black or white trousers. He pretended to be an influential politician and remained on the phone, feigning to speak with some leader," Sawant said. "Later, while speaking to More, he claimed that the sleuths of the Enforcement Directorate (ED) raided his home and he could not execute online or cash transactions. He could only pay through cheques. He then purchased glasses and goggles worth Rs85,271 and handed over the cheque," the officer said. Sawant stated, "A case under the Negotiable Instrument (NI) Act has been registered against Zende in Gurgaon, a case of cheating has been registered against him with Bhigwan police station, and a body offence has been registered against him with the Walchandnagar police station."
