"Transactions above Rs 20,000 are not valid, unless...": High Court clarifies quashing imprisonment and fine by trial court

KOCHI: The High Court has ruled that transactions above Rs 20,000 must be made through an account for them to be valid. 'Payment in cash is not valid. Cases where cheques given as collateral for such transactions will not stand,' Justice P.V. Kunhikrishnan has clarified.

The High Court clarified this in its order quashing the imprisonment and fine imposed by the trial court based on the bouncing of a cheque given as collateral for a loan of nine lakh rupees given in cash. The order will not have a retrospective effect. The order will not apply to cases where the trial has been completed. The trial court order was challenged by Pathanamthitta native P.C. Hari. The Pathanamthitta Magistrate's Court had sentenced the petitioner to one year's imprisonment and a fine of nine lakh rupees for the cheque that bounced. This was upheld by the Additional Sessions Court also. The High Court was approached after this.

The petitioner argued that the loan of nine lakh rupees was a lie and that the complainant had no source of income for this. The complainant Shine Varghese argued that the cheque case would not be dismissed on the grounds that the loan amount was paid in cash. The court clarified that, as per the Income Tax Act, an amount exceeding Rs 20,000 can only be transferred through a bank account. Illegal money transfer cannot be considered a legal loan. Otherwise, the reason for the payment in cash should have been clarified.

Against the idea of Digital India

The High Court has clarified that amounts exceeding Rs 20,000 can be transferred only through account pay cheque, account pay bank draft or electronic clearing system. "There should not be a situation where black money is laundered through the court. It will also go against the idea of 'Digital India' announced by the Prime Minister with the aim of curbing the parallel economy. There is also a restriction on transactions exceeding two lakh rupees in a day. If a large amount is transferred other than through a bank account, a fine of an equivalent amount should be paid," the court pointed out.