Gujarat High Court
Bharatbhai Dayaljibhai Patel vs Hiteshbhai Mohanbhai Parmar on 31 January, 2025
NEUTRAL CITATION
R/CR.MA/2619/2021 ORDER DATED: 31/01/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC. APPLICATION NO. 2619 of 2021
(FOR LEAVE TO APPEAL)
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BHARATBHAI DAYALJIBHAI PATEL
Versus
HITESHBHAI MOHANBHAI PARMAR & ANR.
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Appearance:
MR RJ GOSWAMI(1102) for the Applicant(s) No. 1
N P ZAVERI(7969) for the Respondent(s) No. 1
MR BHARGAV PANDYA, APP for the Respondent(s) No. 2
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CORAM:HONOURABLE MS. JUSTICE S.V. PINTO
Date : 31/01/2025
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 dated 02.03.2020 passed by the Judicial Magistrate First Class, Mandal in Criminal Case No. 745 of 2017, 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 Act").
1.1 The respondent No 1 is hereinafter referred to as "the Page 1 of 14 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Mon Feb 03 22:34:56 IST 2025 NEUTRAL CITATION R/CR.MA/2619/2021 ORDER DATED: 31/01/2025 undefined 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 are as under:
2.1 The applicant and the accused were friends and the accused was a partner of Jay Auto Showroom of TVS Bikes and applicant was wanted to purchase TVS motorcycles for his showroom and had demanded the amount of Rs.27,50,000/-, which was given in cash by the applicant at Jay Auto, Hansalpur.
The accused gave cheque No.007542 from his account No.915020003155232 with Axis Bank, Viramgam Branch of Rs.27,50,000/- and the cheque was deposited in the account of the applicant which returned unpaid with the endorsement "funds insufficient". The accused repaid an amount of Rs.5,10,000/- and gave cheque No.007549 of his account with Axis Bank dated 21.12.2016 for Rs.22,40,000/- which was deposited by the applicant in his bank in January, 2017 but the cheque returned with Page 2 of 14 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Mon Feb 03 22:34:56 IST 2025 NEUTRAL CITATION R/CR.MA/2619/2021 ORDER DATED: 31/01/2025 undefined endorsement "signature default". That on demand, the accused repaid an amount of Rs.1,70,000/- but the remaining amount of Rs.20,70,000/- was not paid, and once again, the accused gave cheque No.007543 dated 27.06.2017 from his account No.915020003155232 with Axis Bank, Viramgam Branch and the cheque was deposited on 28.06.2017, which returned unpaid with endorsement "funds insufficient". The applicant gave the statutory demand notice on 24.07.2017 by R.P.A.D., which was duly served to the accused but the accused did not pay the amount or send any reply and hence the applicant filed the complaint before the Court of the learned Chief Judicial Magistrate, First Class, Mandal, which was registered as Criminal Case No.745 of 2017. 2.2 The accused was served with the summons and appeared before the learned Trial Court and his plea was recorded at Exhibit-07 and the evidence of the applicant was taken on record. The applicant was examined on oath and 15 documentary evidences were produced in support of his case after the closing pursis of the applicant was filed, the further statement of the accused under Section 313 of the Code of Criminal Procedure was Page 3 of 14 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Mon Feb 03 22:34:56 IST 2025 NEUTRAL CITATION R/CR.MA/2619/2021 ORDER DATED: 31/01/2025 undefined recorded wherein the accused denied all the evidence and stepped into the witness box and examined two witnesses in support of his case. The accused filed the closing pursis at Exh.46 and after the arguments of the advocates for both the parties were heard and by impugned judgment and order, the learned Trial Court acquitted the accused from the offence under Section 138 of the 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.S.D.Panchal for Mr.R.J.Goswami appearing for the applicant and learned APP Mr. Bhargav Pandya for the respondent - State. Learned advocate Mr.N.P.Zaveri for respondent No.1 was not present.
5. Learned advocate Mr.S.D.Panchal for learned advocate Mr.R.J.Goswami for the applicant submits that the applicant had loaned an amount of Rs.27,50,000/- and the same has not been Page 4 of 14 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Mon Feb 03 22:34:56 IST 2025 NEUTRAL CITATION R/CR.MA/2619/2021 ORDER DATED: 31/01/2025 undefined repaid and the applicant has produced the necessary documents but the learned Trial Court has not presumed the drawing of the cheque in question that the cheque was issued by the accused towards the loan amount to him. The signature on the cheque has not been disputed by the by the accused and adverse inference against the complainant is drawn by the learned Trial Court to conclude that no such amount is given by the complainant. It is not required for the applicant to prove that the money was loaned to the accused but the learned Trial Court has not considered the same and has not appreciated the presumption under Section 139 of the N.I.Act. The cheque has not been sent to the FSL to prove that the blanks on the cheque was filled by the applicant and when the accused has not disputed his signature on the cheque, the learned Trial Court ought to have convicted the accused and the impugned judgment and order of acquittal is bad in-law and hence, the present leave to appeal must be allowed.
6. Learned APP Mr. Bhargav Pandya for the respondent - State has submitted that the learned Trial Court has appreciated all the evidence in true perspective and has not committed any error Page 5 of 14 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Mon Feb 03 22:34:56 IST 2025 NEUTRAL CITATION R/CR.MA/2619/2021 ORDER DATED: 31/01/2025 undefined in acquitting the accused. Therefore, no interference of this Court is required in the impugned judgment and the order of acquittal passed by the learned Trial Court and has urged this Court to reject the present application.
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. The Apex Court has observed in 14, as under which are 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 Page 6 of 14 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Mon Feb 03 22:34:56 IST 2025 NEUTRAL CITATION R/CR.MA/2619/2021 ORDER DATED: 31/01/2025 undefined 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 Tedhi Singh vs Narayan Dass Mahant reported in 2022 6 SCC 735 has observed as under in Para 7 as under:
"7. It is true that this is a case under Section 138 of the Negotiable Instruments Act. Section 139 of the N.I. Act provides that Court shall presume that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. This presumption, however, is expressly made subject to Page 7 of 14 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Mon Feb 03 22:34:56 IST 2025 NEUTRAL CITATION R/CR.MA/2619/2021 ORDER DATED: 31/01/2025 undefined the position being proved to the contrary. In other words, it is open to the accused to establish that there is no consideration received. It is in the context of this provision that the theory of 'probable defence' has grown. In an earlier judgment, in fact, which has also been adverted to in Basalingappa (supra), this Court notes that Section 139 of the N.I. Act is an example of reverse onus [see (2010) 11 SCC 441). It is also true that this Court has found that the accused is not expected to discharge an unduly high standard of proof. It is accordingly that the principle has developed that all which the accused needs to establish is a probable defence. As to whether a probable defence has been established is a matter to be decided on the facts of each case on the conspectus of evidence and circumstances that exist. "
7.2 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.
(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.Page 8 of 14 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Mon Feb 03 22:34:56 IST 2025
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(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.
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." 7.3 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 Page 9 of 14 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Mon Feb 03 22:34:56 IST 2025 NEUTRAL CITATION R/CR.MA/2619/2021 ORDER DATED: 31/01/2025 undefined 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 considering the arguments advanced by the learned advocates for the parties and on perusal of the record of the case , as per the case Page 10 of 14 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Mon Feb 03 22:34:56 IST 2025 NEUTRAL CITATION R/CR.MA/2619/2021 ORDER DATED: 31/01/2025 undefined of the applicant, initially an amount of Rs.27,50,000/- was given and thereafter, some amount was paid by the accused and the amount of Rs.20,70,000/- was outstanding but the cheque in question has been deposited for Rs.27,50,000/-. Moreover, it is the say of the applicant that the accused wanted the amount to stock up the TVS motorcycles as the festival of 'Dashera" was approaching. At the relevant time, demonitization was in existence and the fact that the applicant had given a huge amount of Rs.27,50,000/- in cash has been challenged by the accused. Moreover, the applicant has not produced any documentary evidence regarding his income and has stated that he has an annual income of Rs.2,40,000/- The applicant has not proved the source of income and the cheque in question was of over-payment. The complainant has himself stated in the complaint that some amount was paid by the accused and the learned Trial Court has also considered that the evidence has been rebutted by the accused by examining witness Vishnubhai Mepabhai Gamara at Exh.37 and witness Dineshbhai Bhimabhai Bharwad at Exh.38 who have stated that the applicant had gone to purchase "Jupiter" and Page 11 of 14 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Mon Feb 03 22:34:56 IST 2025 NEUTRAL CITATION R/CR.MA/2619/2021 ORDER DATED: 31/01/2025 undefined hence, were known to them. Moreover, in the notice, the applicant had demanded the amount of Rs.20,70,000/- from the complainant but the cheque is of Rs.27,50,000/- and the difference has not been explained by the applicant.
9. In light of the judgment of Rangappa (Supra) the accused is not expected to discharge an unduly high standard of proof and the accused has to rebut the presumption under Section 139 of the N.I.Act and the standard for doing so is that of "preponderance of probabilities". In the instant case, the accused has successfully rebutted the presumption and has raised a probable defence and during the cross-examination of the complainant has questioned his financial capacity and has also brought on record that the complainant did not have the sufficient income to extend a loan of Rs.27,50,000/- to the accused. As settled by the Apex Court in Basalingappa (Supra) it is not necessary for the accused to step into the witness box to raise his defence, and his probable defence can be drawn out from the materials of the complainant, but in the instant case the accused has stepped into the witness box and has examined two witnesses Page 12 of 14 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Mon Feb 03 22:34:56 IST 2025 NEUTRAL CITATION R/CR.MA/2619/2021 ORDER DATED: 31/01/2025 undefined to prove his defence. Moreover it is on record that the accused had repaid some amount to the applicant, and there is a difference in the amount mentioned in the notice and the amount on the cheque.
10. The learned Trial Court has considered all the documents produced by the applicant and has also considered that the applicant had not produced any document to prove his source of income or the Income Tax Return and when such a huge amount was not given by cheque and no writing has been executed for the same, the presumption under Section 139 of the Act was not satisfied as the accused had succeeded in rebutting the presumption of Section 139 of the Act. The applicant has failed to prove beyond reasonable doubt that the cheque in question was given for a legally recoverable debt in the name of the applicant and as the essential requirements of Section 138 of the Act were not satisfied the accused cannot be convicted. 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. Page 13 of 14 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Mon Feb 03 22:34:56 IST 2025
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11. Consequently, the present application seeking leave to present an appeal under section 378(4) of the Code of Criminal Procedure fails and is hereby dismissed.
12. Notice stands discharged. Record and proceedings if any, be sent back to the trial court forthwith.
13. 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.....
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