Gujarat High Court
Gautam Shamjibhai Badhani vs State Of Gujarat on 11 August, 2025
NEUTRAL CITATION
R/CR.MA/23861/2024 ORDER DATED: 11/08/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR LEAVE TO APPEAL) NO. 23861
of 2024
In F/CRIMINAL APPEAL NO. 31576 of 2024
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GAUTAM SHAMJIBHAI BADHANI
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR. MAULIK M SONI(7249) for the Applicant(s) No. 1
MR ROHAN N SHAH, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MS. JUSTICE S.V. PINTO
Date : 11/08/2025
ORAL ORDER
1. The present application is filed by the applicant - original complainant under Section 378(4) of the Code of Criminal Procedure, 1973 (for short "Cr.P.C.") seeking leave to file an appeal against the judgment and order passed by the learned Additional Chief Judicial Magistrate, Nakhatrana Dist. Kachchh (hereinafter referred to as "the learned Trial Court") in Criminal Case No. 601 of 2019 on 08.01.2024, whereby the respondent No. 2
- original accused came to be acquitted from the offence under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the NI Act").
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NEUTRAL CITATION R/CR.MA/23861/2024 ORDER DATED: 11/08/2025 undefined 1.1 The respondent No 2 is hereinafter referred to as "the accused" as he stood in the original case for the sake of convenience, clarity and brevity.
2. The brief facts culled out from the memo of the present application as well as the impugned judgment and order and paper book filed by the applicant are as under:
2.1 The applicant and the accused had a friendly relationship and the accused had taken an amount of Rs.9,50,000/-
as a hand loan in the year 2018. The amount was to be returned on 25.07.2019 and towards the outstanding amount, the accused had issued cheque No. 919949 dated 03.08.2019 for the amount of Rs.9,50,000/- from his account with Baroda (Dena) Gujarat Gramin Bank, Nakhatrana Branch. The applicant deposited the cheque in his account with Bank of Baroda, Nakhatrana Branch and the cheque was dishonored and the reason mentioned in the return memo was "Funds Insufficient". The applicant sent the statutory demand notice to the accused on 23.08.2019 which was duly served but no payment was made and hence, the applicant filed a criminal complaint before the Court of the Judicial Magistrate First Page 2 of 13 Uploaded by F.S. KAZI(HC01075) on Thu Aug 14 2025 Downloaded on : Thu Aug 14 21:45:12 IST 2025 NEUTRAL CITATION R/CR.MA/23861/2024 ORDER DATED: 11/08/2025 undefined Class, Nakhatrana under Section 138 of the N I Act, 1881 which was registered as Criminal Case No. 601 of 2019. 2.2 The accused was served with the summons and the accused appeared before the learned Trial Court and his plea was recorded at exhibit 08 and the entire evidence of the applicant was taken on record. The applicant was examined on oath and 05 documentary evidences were produced in support of his case and after the closing pursis was filed, the further statement of the accused under Section 313 of the Code of Criminal Procedure was recorded wherein the accused has denied all the contentions alleged against him and stated that a false complaint has been filed. The accused stepped into the witness box and was examined on oath at exhibit 33 and produced 05 documentary evidence in his defence and after the arguments of the learned advocates for both the parties were heard, by the impugned judgment and order, the learned Trial Court acquitted the accused from the offence under Section 138 of the N I Act.
3. Being aggrieved and dissatisfied with the same, the applicant has preferred the present application seeking leave to Page 3 of 13 Uploaded by F.S. KAZI(HC01075) on Thu Aug 14 2025 Downloaded on : Thu Aug 14 21:45:12 IST 2025 NEUTRAL CITATION R/CR.MA/23861/2024 ORDER DATED: 11/08/2025 undefined appeal mainly stating that the learned Trial Court has not properly interpreted the evidence and has misread the evidence and the impugned judgment is perverse, erroneous and contrary to law.
4. Heard learned advocate Ms. Honey Raval for learned advocate Mr. Maulik Soni for the applicant and learned APP Mr. Rohan N. Shah for the respondent - State.
5. Learned Advocate Ms. Honey Raval the applicant submits that the learned Trial Court has not appreciated that the applicant has successfully established that the cheque in question was issued by the accused from the bank account maintained by him. The applicant has proved that the cheque was written by the accused and it was dishonoured and as the applicant is the holder in due course of the cheque in question the statutory presumption under Section 139 of the N I Act is to be drawn in favour of the applicant. The learned Trial Court has not appreciated the provisions of Section 118 and 139 of the NI Act in proper perspective. The fact of the amount was paid by the applicant to the accused is also not negated, but the learned Trial Court has disbelieved the same. The accused had failed to rebut the Page 4 of 13 Uploaded by F.S. KAZI(HC01075) on Thu Aug 14 2025 Downloaded on : Thu Aug 14 21:45:12 IST 2025 NEUTRAL CITATION R/CR.MA/23861/2024 ORDER DATED: 11/08/2025 undefined presumption and the financial capacity of the applicant was never put to challenge and hence the judgement and order of acquittal is bad in law and the leave to appeal may be granted.
6. Learned APP Mr. Rohan N. Shah has submitted that the learned Trial Court has appreciated all the evidence in detail in light of the citations referred to in the judgement and has passed the judgement and order of acquittal which is proper and no interference is required and hence the application for leave to appeal may be rejected.
7. With regard to the facts in the present case, it would be fit to refer to the observations made the Apex Court in Rangappa vs Sri Mohan reported in 2010 11 SCC 441 in para 14 which reproduced as under:
"14. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section Page 5 of 13 Uploaded by F.S. KAZI(HC01075) on Thu Aug 14 2025 Downloaded on : Thu Aug 14 21:45:12 IST 2025 NEUTRAL CITATION R/CR.MA/23861/2024 ORDER DATED: 11/08/2025 undefined 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard of proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
7.1 The Apex Court in the case of Basalingappa vs. Mudibasappa reported in 2019 0 AIR (SC) 1983 has observed in Para 23 and 28 as under:
"23. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.Page 6 of 13 Uploaded by F.S. KAZI(HC01075) on Thu Aug 14 2025 Downloaded on : Thu Aug 14 21:45:12 IST 2025
NEUTRAL CITATION R/CR.MA/23861/2024 ORDER DATED: 11/08/2025 undefined
(ii) The presumption Under Section 139 is a rebuttable presumption and the onus is on the Accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the Accused to rely on evidence led by him or Accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the Accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
(v) It is not necessary for the Accused to come in the witness box to support his defence.
24. xxxx
25. xxxx
26. xxxx
27. xxxx
28. We are of the view that when evidence was led before the Court to indicate that apart from loan of Rs. 6 lakhs given to the Accused, within 02 years, amount of Rs. 18 lakhs have been given out by the complainant and his financial capacity being questioned, it was incumbent on the complainant to have explained his financial capacity. Court cannot insist on a person to lead negative evidence."
7.2 The Apex Court in the case of Dashrathbhai Trikambhai Patel vs Hitesh Mahendrabhai Patel & Anr. reported in (2023) 1 SCC 578 has observed as under:
"30. In view of the discussion above, we summarise our findings below:
(i) For the commission of an offence under Section 138, the Page 7 of 13 Uploaded by F.S. KAZI(HC01075) on Thu Aug 14 2025 Downloaded on : Thu Aug 14 21:45:12 IST 2025 NEUTRAL CITATION R/CR.MA/23861/2024 ORDER DATED: 11/08/2025 undefined cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation;
(ii) If the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque;
(iii) When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any. If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under Section 138 will stand attracted;
(iv) The first respondent has made part-payments after the debt was incurred and before the cheque was encashed upon maturity. The sum of rupees twenty lakhs represented on the cheque was not the 'legally enforceable debt' on the date of maturity. Thus, the first respondent cannot be deemed to have committed an offence under Section 138 of the Act when the cheque was dishonoured for insufficient funds; and
(v) The notice demanding the payment of the 'said amount of money' has been interpreted by judgments of this Court to mean the cheque amount. The conditions stipulated in the provisos to Section 138 need to be fulfilled in addition to the ingredients in the substantive part of Section 138. Since in this case, the first respondent has not committed an offence under Section 138, the validity of the form of the notice need not be decided."
8. In light of the above settled principles of law and on perusal of the record of the case as per the case of the applicant he had given an amount of Rs.9,50,000/- as hand loan to the accused Page 8 of 13 Uploaded by F.S. KAZI(HC01075) on Thu Aug 14 2025 Downloaded on : Thu Aug 14 21:45:12 IST 2025 NEUTRAL CITATION R/CR.MA/23861/2024 ORDER DATED: 11/08/2025 undefined as the accused was in need for some finance. The amount was to be repaid on 25.07.2019 and during the cross examination, the applicant has stated that he is doing the business of farming and has agricultural land at Nakhatrana, but immediately thereafter has stated that he does not have any agricultural land in his ownership, but is doing farming in others lands on contract. He is not a farmer and he does not know in how many acres he doing farming by contract. The applicant has stated that he is working under one Piyushbhai and they grow castor seeds and cotton. Earlier he had a shop and was doing the business of repairing punctures in tyres of vehicles and he closed the same and is doing farming for last five years. The applicant did not know what kind of castor seeds were grow and did not know the amount of castor seeds that was sold as the accounts for the past two years were not made. The applicant could not remember how much amount he had withdrawn for the past two years and besides farming he also does the business of selling and buying vehicles and houses on commission basis and last had received Rs.70,000/- as commission for sale of a house before three years. The applicant has stated that in the year 2015, he had sold his house in Kailashnagar for Page 9 of 13 Uploaded by F.S. KAZI(HC01075) on Thu Aug 14 2025 Downloaded on : Thu Aug 14 21:45:12 IST 2025 NEUTRAL CITATION R/CR.MA/23861/2024 ORDER DATED: 11/08/2025 undefined Rs.32,00,000/- and he had Rs.10,00,000/- with him in cash and had given an amount of Rs.9,50,000/- to the accused, which were currency notes in the denomination of Rs.500/- and Rs.2000/-. 8.1 During the cross-examination of the applicant, the accused has raised the issue of financial capacity of the applicant and the applicant has not produced any evidence regarding his income. The applicant has stated that he does not know what amount he has withdrawn and has stated that he had sold his residential house in 2015 and the amount of Rs.9,50,000/- was given to the accused as a hand loan in 2018 and he had the amount of Rs.10,00,000/- in cash, lying with him for three years. The applicant has also stated that the denomination of currency notes of Rs.500/- and Rs.2000/- were given to the accused. 8.2 After the further statement of the accused was recorded, the accused denied all the evidence on record and stated that he does not know the applicant and the applicant is not his friend. He had lost his cheque and had given a notice in the newspaper. "Kachch Mitra" about the loss of his cheque. The accused filed his affidavit of examination in chief at exhibit 33 and Page 10 of 13 Uploaded by F.S. KAZI(HC01075) on Thu Aug 14 2025 Downloaded on : Thu Aug 14 21:45:12 IST 2025 NEUTRAL CITATION R/CR.MA/23861/2024 ORDER DATED: 11/08/2025 undefined produced documents showing various cases filed against the applicant at exhibit 29 to exhibit 33.
9. The learned trial court has discussed the evidence produced by both the parties and has also considered the defence raised by the accused and as far as the financial capacity of the applicant is concerned has concluded that as per the say of the applicant, the residential house was sold in the year 2015 and the amount was given to the accused in the year 2018, but the fact was not acceptable as the Government of India had announced demonetization of all Rs.500/- and Rs.1000/- bank notes on 08.11.2016 and fresh currency notes of Rs.500/- and Rs.2000/- were introduced and hence it was highly improbable that the amount of Rs.10,00,000/- received in the year 2015 was given to the accused in the year 2018, without depositing the same in the bank. Even otherwise, the applicant has not produced any documentary evidence to show that he had the financial capacity of giving a huge amount of Rs.9,50,000/- as hand loan to the accused. The learned Trial Court concluded that the accused has successfully rebutted the presumption and raised a probable defence and the Page 11 of 13 Uploaded by F.S. KAZI(HC01075) on Thu Aug 14 2025 Downloaded on : Thu Aug 14 21:45:12 IST 2025 NEUTRAL CITATION R/CR.MA/23861/2024 ORDER DATED: 11/08/2025 undefined learned Trial Court has considered that it was incumbent on the applicant to prove the transaction beyond reasonable doubts. In the entire evidence on record the applicant has not been able to prove that the amount of Rs.9,50,000/-was given to the accused and from the evidence produced on record, the accused succeeded in rebutting the presumption raised in favour of the applicant.
10. The learned Trial Court has appreciated all the evidence produced on record and has concluded that the applicant has not proved the legally enforceable debt and has concluded that from evidence on record the applicant has successfully rebutted the presumption under Section 139 of the N I Act in light of the judgment of the Apex Court in Rangappa(supra) and Basalingappa(supra). The accused had created a reasonable doubt and the applicant has failed to produce reliable and cogent evidence on record about the amount of cheque being the legally recoverable debt from the accused and the applicant has not proved his case beyond reasonable doubt and, in light of the above observation, the learned Trial Court has passed the impugned judgment and order of acquittal, which is just and proper and does Page 12 of 13 Uploaded by F.S. KAZI(HC01075) on Thu Aug 14 2025 Downloaded on : Thu Aug 14 21:45:12 IST 2025 NEUTRAL CITATION R/CR.MA/23861/2024 ORDER DATED: 11/08/2025 undefined not require any interference of this Court.
11. Consequently, the present application seeking leave to present an appeal under Section 378(4) of the Code of Criminal Procedure, 1973 fails and is hereby dismissed.
12. Since the leave to prefer appeal is rejected, no order is required to be passed in the Criminal Appeal, which is at filing stage and the same stands disposed accordingly.
(S. V. PINTO,J) F.S. KAZI Page 13 of 13 Uploaded by F.S. KAZI(HC01075) on Thu Aug 14 2025 Downloaded on : Thu Aug 14 21:45:12 IST 2025