Gujarat High Court
Henil Kanubhai Patel vs State Of Gujarat on 31 January, 2025
NEUTRAL CITATION
R/CR.MA/24027/2024 ORDER DATED: 31/01/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC. APPLICATION NO. 24027 of 2024
(FOR LEAVE TO APPEAL)
In
F/CRIMINAL APPEAL NO. 45337 of 2024
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HENIL KANUBHAI PATEL
Versus
STATE OF GUJARAT & ANR.
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Appearance:
DR. HIREN S SOMAIYA(8031) for the Applicant(s) No. 1
MS JIRGA JHAVERI, 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 27.09.2024 passed by the learned 2nd Additional Civil Judge, Anand in Criminal Case No. 2497 of 2022, 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/24027/2024 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 and paper book filed by the applicant are as under:
2.1 The applicant and the accused were friends and had financial relationship between them and 3 to 4 years prior to filing the complaint, as the mother of the accused was not well, the accused demanded the amount of Rs.9,00,000/- from the complainant. That the complainant had given the amount of Rs.9,00,000/- in parts and when the amount was demanded back, the accused gave cheque No.383079 dated 17.02.2022 of Rs.9,00,000/- drawn on State Bank of India, Karamsad Branch. The cheque was deposited by the complainant in his account, which returned with the endorsement "funds insufficient" on 19.12.2022.
The applicant intimated the return of cheque to the accused, who asked him to re-deposit the same, and once again, it was deposited Page 2 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:40:28 IST 2025 NEUTRAL CITATION R/CR.MA/24027/2024 ORDER DATED: 31/01/2025 undefined on 12.04.2022 but, the cheque was returned unpaid with the endorsement 'exceeds arrangement' on 14.04.2022 The applicant gave the statutory demand notice, which was duly served to the accused and the accused gave a wrong reply and did not repay the amount within the statutory period, and hence, the complaint was filed under Section 138 of the N.I.Act before the Court of learned Chief Judicial Magistrate, Anand, which was registered as Criminal Case No.2497 of 2022.
2.2 The accused was served with the summons and appeared before the learned Trial Court and his plea was recorded at Exhibit-08 and the evidence of the applicant was taken on record. The applicant was examined on oath and 09 documentary evidences were produced in support of his case and after the closing pursis at exhibit 30 was filed, the further statement of the accused under Section 313 of the Code of Criminal Procedure was recorded, wherein the accused stated that according to the agreement cheque No 383080 was given as security as per agreement for Rs.4,50,000/- in which the complainant filled excess amount, which is not a legally recoverable debt and the complaint Page 3 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:40:28 IST 2025 NEUTRAL CITATION R/CR.MA/24027/2024 ORDER DATED: 31/01/2025 undefined is false and the cheque has been misused by illegally filling more than what is due. 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. H. S. Somaiya appearing for the applicant and learned APP Ms. Jirga Jhaveri for the respondent - State.
5. Learned advocate Mr.H.S.Somaiya for the applicant has submitted that the learned Trial Court has not considered that the accused had accepted the debt, and even in the reply to the statutory notice, had stated that he is ready and willing to settle the accounts with the applicant but the dispute was of the amount. Page 4 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:40:28 IST 2025
NEUTRAL CITATION R/CR.MA/24027/2024 ORDER DATED: 31/01/2025 undefined The parties had executed an agreement for repayment of Rs.4,51,000/- and the reasons recorded by the learned Trial Court are erroneous and not sustainable in the law. The applicant has a good case on merits and the impugned judgment and order of acquittal is illegal and unsustainable in the eye of law, and hence, the present application for leave to appeal may be allowed.
6. Learned APP Ms.Jirga Jhaveri 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 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.
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NEUTRAL CITATION R/CR.MA/24027/2024 ORDER DATED: 31/01/2025 undefined "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 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 Page 6 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:40:28 IST 2025 NEUTRAL CITATION R/CR.MA/24027/2024 ORDER DATED: 31/01/2025 undefined 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 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. "Page 7 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:40:28 IST 2025
NEUTRAL CITATION R/CR.MA/24027/2024 ORDER DATED: 31/01/2025 undefined 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 and held that "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 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 Page 8 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:40:28 IST 2025 NEUTRAL CITATION R/CR.MA/24027/2024 ORDER DATED: 31/01/2025 undefined 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 and considering the arguments advanced by the learned advocates for the parties and on perusal of the record of the case, it is the case of the applicant that an amount of Rs.9,00,000/- was taken by the accused on loan and the agreement at exh. 25 was executed between the parties. After the statutory demand notice was served to the accused, the accused sent a reply to the notice mainly stating that an amount of Rs.4,00,000/- was taken and the accused is ready and willing to pay the amount of Rs.4,00,000/- but falsely the amount of Rs.4,51,000/- was was added in the amount.
Moreover, the cheque shows the amount of Rs.9,00,000/- and the accused has stated that the complainant had threatened that he would have to pay an amount of Rs.9,00,000/-. The agreement has been produced by the applicant and the amount of Rs.4,51,000/- is written by hand. The cheque in question is of Rs.9,00,000/- and there is no explanation about the difference in the amount of Rs.4,51,000/- and Rs.9,00,000/- by the applicant. During the cross Page 9 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:40:28 IST 2025 NEUTRAL CITATION R/CR.MA/24027/2024 ORDER DATED: 31/01/2025 undefined examination, the applicant has stated that in the complaint, notice and examination in chief, he has not shown any other source of income besides his salary income and the amount was given to the accused in parts in the years 2013-2014, but he does not remember exactly in which month, and in which year the amount was given. That he has not mentioned in the complaint, notice, and examination in chief, when did he last give the amount to the accused and exactly in how many parts was the amount given. The applicant has stated that he does not file income tax returns, and the amount mentioned in the agreement is Rs.4,51,000/-.
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.9,00,000/- to the Page 10 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:40:28 IST 2025 NEUTRAL CITATION R/CR.MA/24027/2024 ORDER DATED: 31/01/2025 undefined 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 and there is a huge difference in the amount of Rs 4,51,000/- mentioned in the agreement and Rs 9,00,000/- mentioned in the cheque which has not been explained by the applicant.
10. The learned Trial Court has concluded that the presumption has been successfully rebutted by the accused and as there was a huge difference in the amount mentioned in the agreement as also the amount mentioned in the cheque which has not been explained by the applicant, the legally recoverable debt is not proved by the applicant and as the legally recoverable debt was not proved, the impugned judgment and order was passed. Moreover, the learned Trial Court has considered all the documents produced by the complainant and has also considered that the complainant has failed to prove beyond reasonable doubt that the cheque in question was given as repayment of a legal debt. The complainant's conduct which has been inconsistent, changing versions and not aligning with the original complaint has also Page 11 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:40:28 IST 2025 NEUTRAL CITATION R/CR.MA/24027/2024 ORDER DATED: 31/01/2025 undefined been considered by the learned Trial Court.
11. The learned Trial Court has relied upon the law laid down by the Apex Court in the case of Jugesh Sehgal vs Shamsher Singh Gogi passed in Criminal Appeal No. 1180 of 2009 wherein, it is held that all the elements of Section 138 of the N.I.Act must be satisfied and the complainant has to prove the existence of a legally recoverable debt, failing which it does not lead to conviction of the accused and the accused has succeeded in rebutting the presumption by preponderance of probability. 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. The learned Trial Court has concluded that the complainant has failed to provide documentary evidence of the debt and due to inconsistencies in the complainant's version, the Trial Court found the evidence unreliable and has concluded that the debt wasn't legally enforceable, an essential requirement in such cases. The complainant has not proved the debt beyond reasonable doubt, Page 12 of 13 Uploaded by F.S. KAZI(HC01075) on Fri Jan 31 2025 Downloaded on : Sat Feb 01 05:40:28 IST 2025 NEUTRAL CITATION R/CR.MA/24027/2024 ORDER DATED: 31/01/2025 undefined and as there was no legally enforceable debt, 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.
12. Consequently, the present application seeking leave to present an appeal under section 419(4) of the Bharatiya Nagrik Suraksha Sanhita fails and is hereby dismissed.
13. Notice stands discharged. Record and proceedings if any, be sent back to the learned Trial Court forthwith.
14. 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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