Gujarat High Court
Atulbhai Sartanbhai Desai vs State Of Gujarat on 31 January, 2025
NEUTRAL CITATION
R/CR.MA/16135/2024 ORDER DATED: 31/01/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC. APPLICATION (FOR LEAVE TO APPEAL) NO. 16135
of 2024
In F/CRIMINAL APPEAL NO. 30845 of 2024
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ATULBHAI SARTANBHAI DESAI
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR JAYPRAKASH UMOT(3581) for the Applicant(s) No. 1
NOTICE SERVED for the Respondent(s) No. 2
MR BHARGAV PANDYA, APP for the Respondent(s) No. 1
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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 419(4) of the Bharatiya Nagrik Suraksha Sanhita, 2023 (for short "BNSS") seeking leave to file an appeal against the judgment and order dated 16.07.2024 passed by the learned 18th Additional Chief Judicial Magistrate, Negotiable Instruments Act Court No. 34, Ahmedabad in Criminal Case No. 101248 of 2021, whereby the original accused - respondent No. 2 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").
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NEUTRAL CITATION R/CR.MA/16135/2024 ORDER DATED: 31/01/2025 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 are as under:
2.1 The applicant and the accused were friends and the applicant was doing business of milk and milk product and the accused was doing the business of catering. That the accused wanted some amount for his business as he was having financial crunch and the complainant gave an amount of Rs.35,00,000/- to the accused, for which, a notarized deed was executed at 16.07.2020. The accused gave cheque No.000698 dated 20.06.2021 drawn on ICICI Bank, Maninagar, Ahmedabad Branch, which was deposited by the complainant in the Bank of Baroda Bhairavnath, Maninagar, Ahmedabad Branch, but, the cheque returned unpaid with the endorsement "Account Closed" on 30.06.2021. The applicant gave the statutory demand notice dated 16.07.2021, which was duly served to the accused on 22.07.2021, and Page 2 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:35:55 IST 2025 NEUTRAL CITATION R/CR.MA/16135/2024 ORDER DATED: 31/01/2025 undefined thereafter, the accused did not reply to the notice or return the amount, and hence, the complaint was filed before the Metropolitan Magistrate Court, Ahmedabad, which was registered at Criminal Case No.101248 of 2021.
2.2 The accused was served with the summons and appeared before the learned Trial Court and his plea was recorded and the evidence of the applicant was taken on record. The applicant was examined on oath and 08 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 stated that the facts in chief examination and in the complaint are false. The disputed cheque was not for any transaction and the said cheque is one of the two cheques which were already with the complainant. The agreement has been forcefully executed and no amount has been given by applicant as mentioned in the agreement. The financial capacity of the applicant is annually approximately Rs.5,00,000/- and the said complaint is of Rupees Thirty-Five lacs. The said cheque has been Page 3 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:35:55 IST 2025 NEUTRAL CITATION R/CR.MA/16135/2024 ORDER DATED: 31/01/2025 undefined misused and a false complaint has been filed. The complainant had got the cheque book by threatening the accused of social disgrace and has misused the cheque of the accused. After the arguments of the advocates for both the parties were heard, 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. Jayprakash Umot appearing for the applicant and learned APP Mr. Bhargav Pandya for the respondent - State. Though served, the respondent No.2 has neither appeared in person nor has engaged any advocate to represent himself in the matter.
5. Learned advocate Mr. Jayprakash Umot for the applicant submits that the learned Trial Court has erred in holding Page 4 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:35:55 IST 2025 NEUTRAL CITATION R/CR.MA/16135/2024 ORDER DATED: 31/01/2025 undefined that the complainant has not specifically stated the nature of transaction and the source of his funds and has not presumed that the cheque was discharged by the accused for his liability. The initial burden has been discharged by the complainant and the signature and the issuance of the cheque is not disputed, and hence, the accused has to prove the contrary that the cheque was not issued for any debt or liability. The learned Trial Court has completely overlooked the document produced at Exh.13 which is the Notarized Personal Loan Agreement dated 16.07.2020, wherein, the cheque in question has been mentioned and it is admitted that the loan has been taken by the accused. That even after service of the notice, the accused has not given any reply, and hence, the learned Trial Court ought to have convicted the accused but, the learned Trial Court has passed the impugned judgment and order of acquittal, which is contrary to law and evidence on record 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 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:35:55 IST 2025 NEUTRAL CITATION R/CR.MA/16135/2024 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, in Para - 14, 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 Page 6 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:35:55 IST 2025 NEUTRAL CITATION R/CR.MA/16135/2024 ORDER DATED: 31/01/2025 undefined 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 the position being proved to the contrary. In other words, it is open to the accused to establish that there Page 7 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:35:55 IST 2025 NEUTRAL CITATION R/CR.MA/16135/2024 ORDER DATED: 31/01/2025 undefined 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:
1 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.
2 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.
3 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 Page 8 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:35:55 IST 2025 NEUTRAL CITATION R/CR.MA/16135/2024 ORDER DATED: 31/01/2025 undefined 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. 4 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. 5 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."
8. In light of the above settled principles of law in the case and considering the arguments advanced by the learned advocates for the parties and on perusal of the record of the case, the complainant has stated that he had given the amount of Rs.35,00,000/- as loan to the accused, and during the cross- examination, has admitted that he has not produced any evidence regarding the amount given to the accused. No documentary evidence regarding his business transaction with the accused has been produced, and in the notice, it is mentioned that the amount was paid in parts but in the complaint, examination-in-chief or in Page 9 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:35:55 IST 2025 NEUTRAL CITATION R/CR.MA/16135/2024 ORDER DATED: 31/01/2025 undefined the notice, the applicant has not mentioned what amount was given and when. The applicant has also admitted that he does not remember in how many parts the amount was given and as stated the first amount was paid in February, 2019 but he does not remember the time gap between the first and second payment. The complainant, thereafter, had stated that the amount was paid in parts of Rs.1,00,000/-, Rs.3,00,000/- and Rs.10,00,000/- and the last amount was given of Rs.2,40,000/- but the same has not been mentioned in the complaint. The applicant has also admitted that in the Promissory Note produced at Exh.14, it is mentioned that the amount of Rs.35,00,000/- was given today i.e. on 16.07.2020. Moreover, the agreement executed between the parties and produced at Exh.13 on a Non-Judicial Stamp Paper of Rs.300/- has been purchased by one Sanjay K. Desai but the applicant has stated that he does not know who had purchased the stamp paper and he does not know who is Sanjay K. Desai. It is pertinent to note that the applicant has not examined Sanjay K. Desai or the Notary and during the financial year 2020-21, as per the Income Tax Return of the applicant produced at Exh.16, income of the applicant is Rs.4,99,884/-. The applicant cannot say how he had Page 10 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:35:55 IST 2025 NEUTRAL CITATION R/CR.MA/16135/2024 ORDER DATED: 31/01/2025 undefined advanced the amount of Rs.17,50,000/- shown at Exh.16 and the transaction of the accused has not been shown in his Income Tax Return. It was the defense of the accused that the applicant had certain videos of the accused and he was blackmailing him and on that basis, got the documents at Exhs.13 and 14 executed. Moreover the learned Trial Court has considered all the documents produced by the applicant and has also considered that the applicant has failed to prove beyond reasonable doubt that the cheque in question was given as repayment of a legal debt.
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.17,50,000/- to the accused. As Page 11 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:35:55 IST 2025 NEUTRAL CITATION R/CR.MA/16135/2024 ORDER DATED: 31/01/2025 undefined 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, but his probable defence can be drawn out from the materials of the complainant.
10. The learned Trial Court has relied upon the law laid down by the Apex Court in the case of C.C.Alavi Haji Vs Palapetty Muhammed & Anr. passed in Criminal Appeal No. 767/2007 and in light of the same, has concluded that the applicant has not proved his financial capacity to lend such a huge amount of Rs.35,00,000/- and the transaction, legally recoverable debt and facts of notice have not been proved beyond reasonable doubt. The learned Trial Court has concluded that the accused has successfully rebutted the presumption based on preponderance of probability and, as per the judgment of the Apex Court in Basalingappa (supra) the complainant has to prove his financial capacity, failing which the presumption under section 139 of the N.I.Act deems rebutted and 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 Page 12 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:35:55 IST 2025 NEUTRAL CITATION R/CR.MA/16135/2024 ORDER DATED: 31/01/2025 undefined 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 Bhartiya Nagrik Suraksha Sanhita 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 required to be passed in the Criminal Appeal, which is at filing stage and the same stands disposed accordingly.
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