Response

Yes unaccounted money is a legally enforceable debt because of it is not shown in the IT returns there is no bar to say that it is not legally enforceable debt. In the IT Act also there is no provision saying that unaccounted money is not legally enforceable at law but subject to some conditions and consequences. A person can not shift his burden of liability only on the ground that debt is not shown in the IT Act.

Section 138 of the Negotiable Instruments Act, 1881, can be said to be falling either in the class of acts which are not criminal in a real sense but are acts which in the public interest are prohibited under the penalty or those where although the proceedings may be criminal in form, they are really only a summary mode of enforcing a civil right.

Mere dishonour of a cheque for the reasons stated in section 138 of the Negotiable Instruments Act, 1881, is sufficient for commission of crime under section 138 of the Negotiable Instruments Act, 1881, and it is not material whether he had reason to believe when he issued the cheque that the cheque may not be dishonoured on presentment.

The state of mind of the accused person, his knowledge or reasonable belief are not the necessary Ingredients of an offence under section 138 of the Negotiable Instruments Act, 1881, and, therefore, the provision contained in section 140 of the Act that it shall not be a defence in a prosecution for an offence under section 138 that the drawer had no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment, cannot be said to be unreasonable and violative of article 14 of the Constitution of India.

Reference: Section 138 of the Negotiable Instruments Act, 1881

Section 140 of the Negotiable Instruments Act, 1881

Article 14 of the Constitution of India

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LAWAYZ-2023-261