Negotiable Instruments Act, 1881 (NI Act) do not bar lending of amount in cash. If at all the complainant has violated the provisions of Income Tax Act, it is for the Income Tax Department to take action, but the same cannot be a ground to seek acquittal – Mahesh. R Vs. B.M. Mahesh – Karnataka High Court

The First Appellate Court referred to Section 269 of Income Tax Act, 1961 to hold that the complainant could not have lent more than Rs. 20,000/- in cash, which is barred under Income Tax Act. But the Court has failed to appreciate the fact that there is no such provision in of Negotiable Instruments Act, 1881 and the NI Act do not bar lending of such amount in cash. If at all the complainant has violated the provisions of Income Tax Act, it is for the Income Tax Department to take action and the accused could have complained to the said Department. But the same cannot be a ground to seek acquittal.

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