Gujarat High Court
Ashokbhai Narshibhai Trivedi vs Kapilbhai Ashokbhai Makwana ... on 20 February, 2025
NEUTRAL CITATION
R/CR.MA/267/2025 ORDER DATED: 20/02/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR LEAVE TO APPEAL) NO. 267 of
2025
In F/CRIMINAL APPEAL NO. 40 of 2025
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ASHOKBHAI NARSHIBHAI TRIVEDI
Versus
KAPILBHAI ASHOKBHAI MAKWANA PROPRIETOR OF GURUKRUPA
FOOD PRODUCTS & ANR.
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Appearance:
MR DHRUV D DESAI(9909) for the Applicant(s) No. 1
MS. JIRGA JHAVERI, APP for the Respondent(s) No. 2
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CORAM:HONOURABLE MS. JUSTICE S.V. PINTO
Date : 20/02/2025
ORAL ORDER
1. The present application is filed by the applicant - original complainant under Section 419(4) of the Bharatiya Nagrik Suraksha Sanhita, 2023 (for short "BNSS") seeking leave to file an appeal against the judgment and order dated 28.11.2024 passed by the learned 2 nd Additional Chief Judicial Magistrate, Bhavnagar in Criminal Case No. 2956 of 2020, whereby the original accused - respondent no. 1 herein came to be acquitted from the charge levelled against him under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the NI Act"). Page 1 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025
NEUTRAL CITATION R/CR.MA/267/2025 ORDER DATED: 20/02/2025 undefined 1.1 The respondent no. 1 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 filed a complaint against the accused under Section 138 of the Act, as the accused had taken a friendly loan of ₹4,00,000/- in August 2019 and ₹4,00,000/- on 20.12.2019 for business purpose and accused issued cheque No.188030 of amount for the ₹8,00,000/- dated 07.07.2020 from his account with Allahabad Bank, Nana Varacchha Branch, Surat. The applicant deposited the cheque in his account and the same was dishonored and as per instruction of the accused once again the cheque was deposited on 13.07.2021 in the account of the applicant with State Bank of India, Kadiyabid Branch, Bhavnagar. The cheque was dishonored once again and the reason mentioned in the return memo dated Page 2 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025 NEUTRAL CITATION R/CR.MA/267/2025 ORDER DATED: 20/02/2025 undefined 14.07.2020 was "Funds Insufficient". The applicant sent the statutory demand notice to the accused on 21.07.2020 and no payment was made though it was served. The applicant filed the criminal complaint before the learned Chief Judicial Magistrate, Bhavnagar under Section 138 of the NI Act, 1881 which was registered in Criminal Case No. 2956 of 2020.
2.2 The accused was served with the summons and appeared before the learned Trial Court and his plea was recorded at Exh. 7 and the evidence of the applicant was taken on record. The applicant was examined on oath and 5 documentary evidences were produced in support of his case and after the closing pursis at Exh. 24 was filed, the further statement of the accused under Section 313 of the Code of Criminal Procedure, 1973 was recorded wherein the accused denied all the allegations against him and claimed that he is innocent. After the evidence of the accused was closed, the arguments of the learned advocates for both the parties were heard and by the impugned judgment and order, the learned Trial Court acquitted the accused from Page 3 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025 NEUTRAL CITATION R/CR.MA/267/2025 ORDER DATED: 20/02/2025 undefined the offence under Section 138 of the NI Act.
3. Being aggrieved and dissatisfied with the same, the applicant has preferred the present application seeking leave to 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 Mr. Dhruv D. Desai appearing for the applicant and learned APP Ms. Jirga Jhaveri for the respondent - State.
5. Learned Advocate Mr. Dhruv D. Desai for 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 NI Act is to be drawn in favour of Page 4 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025 NEUTRAL CITATION R/CR.MA/267/2025 ORDER DATED: 20/02/2025 undefined the applicant. The learned Trial Court has not appreciated the provisions of Section 118 and 138 of the NI Act in proper perspective. The oral contract is not negated by the accused and the fact of the amount 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 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 must be granted.
6. Learned APP Ms. Jirga Jhaveri for the State 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 must 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 Page 5 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025 NEUTRAL CITATION R/CR.MA/267/2025 ORDER DATED: 20/02/2025 undefined Rangappa vs Sri Mohan reported in 2010 11 SCC 441 in para 14 which is 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 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 Page 6 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025 NEUTRAL CITATION R/CR.MA/267/2025 ORDER DATED: 20/02/2025 undefined 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 Page 7 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025 NEUTRAL CITATION R/CR.MA/267/2025 ORDER DATED: 20/02/2025 undefined liability.
(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 Page 8 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025 NEUTRAL CITATION R/CR.MA/267/2025 ORDER DATED: 20/02/2025 undefined 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 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 Page 9 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025 NEUTRAL CITATION R/CR.MA/267/2025 ORDER DATED: 20/02/2025 undefined 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 considering the arguments advanced by the learned advocates for the parties and on perusal of the record of the case, the applicant has submitted his affidavit of examination in chief at Exh. 4 and has been cross-examined at length by the learned advocate for the accused, wherein, he has stated that he has produced all the evidence that was in his possession regarding the amount lent to the accused. That his salary is ₹71,000/- per month and his salary is spent in his household expenses as also social Page 10 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025 NEUTRAL CITATION R/CR.MA/267/2025 ORDER DATED: 20/02/2025 undefined expenses. That he has not produced any document about the amount given to the accused and he has not stated the year and the month in which the accused demanded for the amount in his complaint or in his affidavit of examination in chief. That he has not stated the place where the amount was demanded and he has not produced his PAN Card or Income Tax Returns on record. That he has not produced any evidence as to how the amount was given to the accused and has not shown the amount in his Income Tax Returns and he has not stated the place at which the cheque was given by the accused and in the cheque only the signature is of the accused and the other details are written by a different pen.
8.1 It is the case of the applicant that he had given the amount of ₹8,00,000/- to the accused, but there is no evidence to when, where and how the financial transaction has taken place. The applicant has not stated any details about the transaction with the accused and has merely stated that he had given the amount in cash. The evidence has been challenged and the financial capacity of the Page 11 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025 NEUTRAL CITATION R/CR.MA/267/2025 ORDER DATED: 20/02/2025 undefined applicant has also been challenged by the accused and it was incumbent on the applicant to explain his financial capacity as the amount is not shown in the income tax returns of the applicant. On perusal of the evidence of the applicant in the paper book submitted on record by the learned advocate for the accused has successfully challenged the financial capacity and even thereafter no evidence has been produced on record by the applicant to prove his financial capacity and the time, date and day that he had given the amount to the accused.
9. The learned Trial Court has appreciated all the evidence produced by both the parties and has concluded that the applicant has not proved how the amount was paid to the accused. Moreover, the accused has successfully rebutted the presumption in the cross-examination and even though the financial capacity has been challenged there is nothing on record to show that the amount was in fact paid.
10. The learned Trial Court has concluded from evidence Page 12 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025 NEUTRAL CITATION R/CR.MA/267/2025 ORDER DATED: 20/02/2025 undefined on record that the accused had created a reasonable doubt and the applicant has failed to produce reliable and cogent evidence on record about his financial capacity to lend such huge amount and about the legally recoverable debt from the accused and the applicant has not proved his case beyond reasonable doubt. The learned Trial Court has concluded that the accused has successfully rebutted the presumption based on preponderance of probability 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 not require any interference of this Court.
11. Consequently, the present application seeking leave to present an appeal under Section 419(4) of the Bharatiya Nagrik Suraksha Sanhita, 2023 fails and is hereby dismissed.
12. Notice stands discharged. Record and proceedings if any, be sent back to the learned Trial Court forthwith.
13. Since the leave to prefer appeal is rejected, no order is Page 13 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025 NEUTRAL CITATION R/CR.MA/267/2025 ORDER DATED: 20/02/2025 undefined required to be passed in the Criminal Appeal, which is at filing stage and the same stands disposed off accordingly.
(S. V. PINTO,J) VASIM S. SAIYED Page 14 of 14 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:50:06 IST 2025