ANIL DEV SINGH, J. :
This is a revision petition against the order of the learned Addl. Sessions Judge dt. 24th January, 1997 whereby the order of the learned Addl. Chief Metropolitan Magistrate dt. 28th July, 1995 was set aside. The facts giving rise to this petition are as follows :
A criminal complaint No. 901 of 1987 for the alleged commission of the offences under s. 276E of the IT Act, 1961 (for short the Act), was filed by Shri R. M. Prasad, ITO, Company Circle XXV, New Delhi, against the petitioners as per the following allegations :
Petitioner No. 1 is a company registered under the Companies Act, 1956. Petitioners 2 to 4 were the Directors of the petitioner No. 1 during the period relevant to the asst. yr. 1984-85 and they were in charge of and responsible to the company for the conduct of its business at the time when the offence is said to have been committed. During the course of the assessment proceedings for the period relevant to the asst. yr. 1984-85 the complainant found that the company had shown deposits in its books of accounts in the name of M/s. Summan Steel & Rolling Mills Pvt. Ltd. and M/s. Universal Properties Ltd. Repayment of deposits amounting to Rs. 1,00,000 and Rs. 3,50,000 were made to M/s. Summan Steel & Rolling Mills Pvt. Ltd. in cash by the petitioner company on 28th January, 1984 and 12th February, 1984 respectively. Similarly, repayment of deposit of Rs. 10,000 was made by the petitioner-company to M/s. Universal Properties Ltd. on 12th September, 1983. The case of the complainant is that the repayments were made in contravention of s. 269T of the Act inasmuch as they were made in cash instead of by cheques resulting in commission of offence punishable under s. 276E of the Act. Petitioner No. 1 was issued a notice by the complainant on 22nd March, 1987 requiring it to show cause why action under s. 276E of the Act be not initiated against it. The company as well as its directors (petitioners 2 to 4), however, failed to give any reply to the notice.
The learned trial Court by its order dt. 28th July, 1995 acquitted the petitioners on the ground that the provisions of s. 269T of the Act were not attracted as it was not a case of repayment in connection with the deposits, but it was a case of repayment of loans. It was held that the repayment of loan by cash payment will not constitute contravention of s. 269T of the Act. The complainant being aggrieved of the order of the Addl. Chief Metropolitan Magistrate filed a revision petition before the Addl. Sessions Judge, Delhi. The Addl. Sessions Judge by his order dt. 24th January, 1997 reversed the order of the learned Addl. Chief Metropolitan Magistrate holding that the repayment was towards deposits as contemplated by s. 269T of the Act. It further came to the conclusion that the term 'deposit' means any deposit of money which is repayable after notice and repayable after a fixed period of time. It also observed that it was too early for the trial Court to jump to the conclusion that the loans repaid by the petitioner-company were not deposits as contemplated by s. 269T of the IT Act.
2. I have heard learned counsel for the parties. In order to appreciate the question as to whether the petitioners have violated the provisions of the Act, it would be necessary and convenient to extract s. 269T thereof :
'269T. Mode of repayment of certain deposits -
(1) No company (including a banking company), co-operative society or firm shall repay to any person any deposit otherwise than by an account payee cheque or account payee bank draft where the amount of the deposit, or where the amount of the deposit is to be repaid together with any interest, the aggregate of the amount of the deposit and such interest, is ten thousand rupees of more :
Provided that where the repayment is by a banking company or co-operative bank, such repayment may also be made by crediting the amount of such deposit to the account (if any) with such company or bank of the person to whom such deposit has to be repaid :
Provided further that nothing in this sub-section shall apply to or in relation to the repayment of any deposit on or after the date on which the IT (Second Amendment) Act, 1981, receives the assent of the President.
(2) No branch of a banking company or a co-operative bank and no other company or co-operative society and no firm or other person shall repay any deposit made with it otherwise than by an account payee cheque or account payee bank draft drawn in the name of the person who has made the deposit if -
(a) the amount of the deposit together with interest, if any, payable thereon, or
(b) the aggregate amount of the deposits held by such person with the branch of the banking company or co-operative bank, or as the case may be, the other company or co-operative society or the firm, either in his own name or jointly with any other person on the date of such repayment together with the interest, if any, payable on such deposits,
is twenty thousand rupees or more :
Provided that where the repayment is by a branch of a banking company or co-operative bank, such repayment may also be made by crediting the amount of such deposit to the savings bank account or the current account (if any) with such branch of the person to whom such deposit has to be repaid :
Provided further that nothing in this sub-section shall apply to or in relation to the repayment of any deposit before the date on which the IT (Second Amendment) Act, 1981, receives the assent of the President.
Explanation - For the purposes of this section, -
(i) 'banking company' shall have the meaning assigned to it in cl. (i) of the Explanationn to s. 269SS;
(ia) 'co-operative bank' shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949);
(ii) 'deposit' means any deposit of money which is repayable after notice or repayable after a period and, in the case of a person other than a company, includes deposit of any nature'.
The above said, section shows that the aggregate amount of deposits held by a company shall not be repaid to any person otherwise than by an account payee cheque or account payee bank draft where the amount of deposit, or where the amount of deposit is to be repaid together with any interest, the aggregate of the amount of the deposit and such interest, is ten thousand rupees or above, after the IT (Second Amendment) Act, 1981, received the assent of the President of India. The President of India assented to the Amendment Act on 19th September, 1981. It is not disputed that the repayment was made after the Amendment Act was assented to by the President of India. Learned counsel for the petitioner submitted that s. 269T(1) of the Act will not be applicable if the repayment was towards deposit as under second proviso to s. 269T(1) nothing in the said sub-section will apply to or in relation to any repayment of any deposit on or after the date on which the IT (Second Amendment) Act, 1981, received the assent of the President of India. It does appear to me that this sub-section is not applicable as the assent of the President of India was received earlier to the repayment, but cls. (a) and (b) of sub-s. (2) of s. 269T would undoubtedly be applicable if the repayment in the instant case was made in relation to deposit as the repayment was made after 19th September, 1981 when the President of India assented to the Amendment Act. Now the only question which remains to be determined is whether the repayment was towards deposit or the same was towards loan. In order to determine this question it will be necessary to consider whether the meaning of the term deposit ascribed by the Expln. to s. 269T includes the term loan in its ambit. The distinction between the loan and the deposit is that in the case of the former it is ordinarily the duty of the debtor to seek out the creditor and to repay the money according to the agreement and in the case of the latter it is generally the duty of the depositor to go to the banker or to the depositee, as the case may be, and make a demand for it. This distinction was adopted by the Lahore High Court in the case of Gurcharan Das & Anr. vs. Ram Rakha Mal & Ors. AIR 1939 Lah 81. Similar view was expressed by a Division Bench of the Oudh High Court in the case of Chaturgun vs. Shahzady AIR 1930 Oudh 395. While drawing the distinction between the words deposit and loan, the Court relied upon two earlier decisions of the Madras High Court in V. Balakrishnudu vs. Narayanaswamy Chetty 24 IC 852, and Kishtappa Chetty vs. Lakshmi Ammal 72 IC 842. In this regard it held as follows :
'The word 'deposit' as pointed out by the Madras High Court in V. Balakrishnudu vs. Narayanaswamy Chetty 24 IC 842 is derived from the Latin depositum, a technical word used in the Roman law of bailment for a bailment of a specific thing to be kept for the bailor and returned when wanted, as opposed to commodious where a specific thing is lent to the bailee to be used by him and returned. In popular language commodious is translated by the word 'loan' and the distinction between deposit and loan is this : that a deposit is to be kept by the depositee for the depositor and the loan is to be kept by the borrower for himself. Thus I deposit my hat in the cloak room. My hat is not to be used by the depositee, but is to be kept for me and returned to me on my demand; but I lend my money to a friend and he can do what he likes with it as long as he returns it to me either on demand or at some specified time. It may be, as observed by Sir Walter Schwabe when Chief Justice of the Madras High Court, in Kishtappa Chetty vs. Lakshmi Ammal, 72 IC 842 that Art. 145 covers more than the deposited of Roman Law, and his Lordship observed that the framers of the Indian Limitation Act 'meant to use simple and plain language,' but I take this to mean that the word 'deposit' is used in the ordinary sense of the word in the English language, and as far as I am aware the word 'deposit' does not cover a transaction of the nature of a loan. The transaction that we have to consider is a loan. The plaintiff lent the defendant these ornaments to be used by the latter in a religious procession. There was no question of trust or quasi-trust. It was a mere loan for the benefit of the borrower and in my opinion Art. 145 has no application'.
3. It may also be noted that while Arts. 19 and 21 of the Limitation Act fix the period within which suit for recovery of loan can be filed, Art. 22 deals with the period of limitation for suit for money on account of deposit. The starting period of limitation under Arts. 19 and 21, on the one hand, and Art. 22, on the other, are different. Under Arts. 19 and 21 the cause of action in the case of money lent arises from the date of loan, whereas under Art. 22 the cause of action in the case of a deposit arises from the date of demand. thereforee, it is necessary to distinguish a deposit from a mere loan.
4. The provisions of s. 269T r/w s. 276E are penal in nature and must be strictly construed. Since the legislature specifically used the word 'deposit' in contradistinction to the term 'loan', the provisions would only be attracted if the repayment has been made in respect of a deposit. The meaning of the word 'deposit' occurring in s. 269T cannot be stretched to include loan. An assessed must know as to which of his acts would violate a penal provision of a statute, as otherwise unwittingly he may fall in the net cast by a penal provision. In case two interpretations are possible, an interpretation which takes out an assessed from the clutches of a penal provision must be preferred.
5. The complainant in the show-cause notice dt. 2nd March, 1987 clearly stated that the petitioners raised a loan and a payment was made in cash with reference to the same. This is what the show cause notice states :
'During the course of assessment proceedings for the asst. yr. 1984-85 in your case it is found that you have raised a loan from M/s. Summan Steel & Rolling Mills and made payment for the said loan in the previous year relevant to the asst. yr. 1984-85. Copy of the account appearing in your account books is reproduced below :
Receipt Payment
24-3-84
cash
2,16,800
28-1-84
cash
1,00,000
30-3-84
cash
75,000
12-2-84
cash
3,50,000
14-2-84
cash
1,50,000
27-2-84
cash
2,00,000
20-3-84
cash
1,86,000
It is noticed that the transactions for receipt as well as for the payment of the loan have been made in cash exceeding Rs. 10,000. Provision of s. 269T of the IT Act, 1961 prohibits the payment in cash for the deposit received by you if the amount repaid exceeded to Rs. 10,000 other than Bank cross cheques and drafts.'
It is thereforee, obvious that the complainant itself conceded in the above said notice that the transactions for receipt was in the nature of a loan. This being the situation, there was no justification for the complainant to invoke s. 269T r/w s. 276E of the IT Act. The prosecution of the petitioners, thereforee, was not warranted.
Accordingly, the order of the learned Addl. Sessions Judge dt. 24th January, 1997 is set aside and the order of the learned Addl. Chief Metropolitan Magistrate dt. 28th July, 1995 is restored.