Gujarat High Court
Maheshkumar Nathabhai Desai vs State Of Gujarat on 14 February, 2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR LEAVE TO APPEAL) NO. 10072
of 2023
In R/CRIMINAL APPEAL NO. 1311 of 2023
With
R/CRIMINAL APPEAL NO. 1311 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MRS. JUSTICE M. K. THAKKER
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1 Whether Reporters of Local Papers may be allowed NO
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question YES
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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MAHESHKUMAR NATHABHAI DESAI
Versus
STATE OF GUJARAT
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Appearance:
MR. D. P. KINARIWALA(410) for the Applicant(s) No. 1
MR HEMAL K ACHARYA(6021) for the Respondent(s) No. 2
MS MONALI BHATT APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER
Date : 14/02/2024
ORAL JUDGMENT
Order in Criminal Misc. Application
This Court has heard the matter finally at the admission
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stage. Leave as prayed for is granted. Hence, this application
for leave to appeal is allowed.
Order in Criminal Appeal
1. This appeal is filed under Section 378 of the Code of
Criminal Procedure, 1973, challenging the judgment and order
of acquittal dated 03.04.2023 passed by the learned Additional
Chief Metropolitan Magistrate, N.I.A. Court No.36, Ahmedabad
in Criminal Case No.95307 of 2021 whereby, the respondent -
accused is acquitted from the charges under Section 138 of
the Negotiable Instruments Act, 1881.
2. It is the case of the complainant that the appellant has
given an amount of Rs.10 lacs to the respondent no.2 as a
hand loan. Upon request being made by the appellant to return
the amount, the cheque bearing No.000062 dated 18.06.2021
of Ahmedabad District Co-operative Bank Ltd. was issued in
favour of the appellant for the amount of Rs.10 lacs. The
aforesaid cheque is deposited in the account by the appellant
on 22.06.2021 however, the said cheque was returned unpaid
with an endorsement of "payment stopped by the drawer".
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2.1. The statutory demand notice dated 17.07.2021 was
issued to the respondent - accused against which, the reply
was given by the respondent - accused on 31.07.2021.
Thereafter, the private complaint came to be filed under
Section 138 of the Negotiable Instruments Act on 17.08.2021.
Vide order dated 17.08.2021, process came to be issued under
Section 204 of the Code of Criminal Procedure and the plea of
the respondent no.2 was recorded on 22.06.2022 wherein, the
accused pleaded not guilty and claimed to be tried. The
appellant was cross-examined by the respondent no.2.
Thereafter, further statement under Section 313 of the Code of
Criminal Procedure was recorded wherein, the defense was
raised by the accused no.2 that the old cheque, which was
given for the security was misused. After considering the
evidence placed on record and the arguments advanced by the
learned advocates for the respective parties, the respondent
no.2 was acquitted on the ground that the disputed cheque is
not issued to discharge the legally enforceable debt and the
respondent had succeeded in rebutting the presumption, which
is in favour of the complainant. Being aggrieved and
dissatisfied with the aforesaid judgment and order of the
acquittal, the present appeal is filed.
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3. Heard learned advocate Mr.D.P. Kinariwala for the
appellant.
4. The learned advocate submits that the judgment and
order passed by the learned trial Court, acquitting the
respondent - accused by holding that the respondent -
accused had successfully rebutted the presumption by cross-
examining the complainant, is not in accordance with the
evidence placed on record. It is submitted that the
presumption is provided under Section 139 of the Code of
Criminal Procedure wherein, it is provided that unless the
contrary is proved, the presumption is in favour of the
complainant with regard to the issuance of the cheque towards
discharge of legally enforceable debt. The learned advocate
submits that when the cheque contains the signature of the
accused and there is no dispute about the signature, which
amounts to acknowledging the debt by the respondent -
accused and, therefore, even if the debt, as stated by the
learned trial Court, is of the year 2015 but, when the
acknowledgment was given in the year 2021, the conclusion
about time barred debt by the learned trial Court is bad and
illegal and, therefore, it is prayed that the judgment and order
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passed by the learned trial Court is required to be interfered
with.
5. The learned advocate further submits that the learned
trial Court erred in holding that the appellant is not having the
sufficient income to lend the amount to the respondent -
accused. The learned advocate submits that when the
signature is not disputed and in the demand notice, the
financial capacity was not challenged by the respondent -
accused, holding that the appellant has failed to prove the
financial capacity, is against the evidence on record and,
therefore, the same is required to be interfered with. The
learned advocate further submits that the defense of the
respondent - accused was accepted without producing the
sufficient material before the Court and, therefore, the
judgment and order of acquittal is required to be interfered
with. The learned advocate further submits that it is admitted
by the respondent - accused that the cheque was issued for
the purpose of security in the year 2015 however, the accused
has not placed anything on record to show that the said
cheque was demanded back during the period from 2015 to
2021. Neither it is proved that the accused had paid the
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amount, which was borrowed however, in absence of the
aforesaid evidence, the learned trial Court had acquitted the
respondent - accused. The learned advocate submits that the
judgment and order passed by the learned trail Court,
acquitting the respondent - accused, is bad in law and,
therefore, the same is required to be quashed and the
respondent - accused is required to be punished accordingly
and the appeal is required to be allowed.
6. Considering the submissions advanced by the learned
advocate for the appellant, relevant provisions of the
Negotiable Instruments Act are required to be re-looked, which
are reproduced herein below:-
Section 118 - Presumptions as to negotiable instruments
Until the contrary is proved, the following presumptions shall be
made:
1. of consideration; that every negotiable instrument was
made or drawn for consideration, and that every such
instrument, when it has been accepted, indorsed, negotiated
or transferred, was accepted, indorsed, negotiated or
transferred for consideration;
2. as to date; that every negotiable instrument bearing a date
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was made or drawn on such date;
3. as to time of acceptance; that every accepted bill of
exchange was accepted within a reasonable time after its date
and before its maturity;
4. as to time of transfer; that every transfer of a negotiable
instrument was made before its maturity;
5. as to order of indorsements; that the indorsements
appearing upon a negotiable instrument were made in the
order in which they appear thereon;
6. as to stamp; that a lost promissory note, bill of exchange or
cheque was duly stamped;
7. that holder is a holder in due course; that the holder of a
negotiable instrument is a holder in due course: Provided that,
where the instrument has been obtained from its lawful
owner, or from any person in lawful custody thereof, by means
of an SP offence or fraud, or has been obtained from the
maker or acceptor thereof by means of an offence or fraud, or
for unlawful consideration, the burthen of proving that the
holder is a holder in due course lies upon him.
138 Dishonour of cheque for
insufficiency, etc., of funds in the
account. --Where any cheque drawn by a
person on an account maintained by him with
a banker for payment of any amount of money
to another person from out of that account for
the discharge, in whole or in part, of any debt
or other liability, is returned by the bank
unpaid, either because of the amount of
money standing to the credit of that account is
insufficient to honour the cheque or that it
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exceeds the amount arranged to be paid from
that account by an agreement made with that
bank, such person shall be deemed to have
committed an offence and shall, without
prejudice to any other provisions of this Act,
be punished with imprisonment for [a term
which may be extended to two years], or with
fine which may extend to twice the amount of
the cheque, or with both:
Provided that nothing contained in this section
shall apply unless--
(a) the cheque has been presented to the bank
within a period of six months from the date on
which it is drawn or within the period of its
validity, whichever is earlier;
(b) the payee or the holder in due course of the
cheque, as the case may be, makes a demand
for the payment of the said amount of money
by giving a notice in writing, to the drawer of
the cheque, [within thirty days] of the receipt
of information by him from the bank regarding
the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make
the payment of the said amount of money to
the payee or, as the case may be, to the
holder in due course of the cheque, within
fifteen days of the receipt of the said notice.
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Explanation.-- For the purposes of this section,
"debt or other liability" means a legally
enforceable debt or other liability.]
Section 139 in The Negotiable Instruments
Act, 1881
139. Presumption in favour of holder.--It shall
be presumed, unless the contrary is proved,
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.
7. Considering the above provisions, what is the
presumption that is elaborated in the judgment rendered by
the Hon'ble Apex Court in the case of M.S.Narayana Menon
vs . State Of Kerala reported in (2006) 6 SCC 39, a
discussion with regard to the same is reproduced herein below.
40. "In P. Ramanatha Aiyar's Advanced Law
Lexicon, 3rd edition, at page 3697, the term
'presumption' has been defined as under:
"A presumption is an inference as to the existence
of a fact not actually known arising from its
connection with another which is known.
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A presumption is a conclusion drawn from the proof
of facts or circumstances and stands as
establishing facts until overcome by contrary proof.
A presumption is a probable consequence drawn
from facts (either certain, or proved by direct
testimony) as to the truth of a fact alleged but of
which there is no direct proof. It follows, therefore
that a presumption of any fact is an inference of
that fact from others that are known". (per
ABBOTT, C.J., R. v. Burdett, 4 B. & Ald, 161) The
word 'Presumption' inherently imports an act of
reasoning a conclusion of the judgment; and it is
applied to denote such facts or moral phenomena,
as from experience we known to be invariably, or
commonly, connected with some other related
facts. (Wills on Circumstantial Evidence) A
presumption is a probable inference which common
sense draws from circumstances usually occurring
in such cases. The slightest presumption is of the
nature of probability, and there are almost infinite
shades from slight probability to the highest moral
certainty. A presumption, strictly speaking, results
from a previously known and ascertained
connection between the presumed fact and the fact
from which the inference is made."
Having noticed the effect of presumption which
was required to be raised in terms of Section
118(a) of the Act, we may also notice a decision of
this Court in regard to 'presumption' under Section
139 thereof".
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8. Keeping in mind the above provisions and the evidence
on record, if we may consider the case of the complainant,
then it is the case of the complainant that the complainant is
doing the business of construction and the respondent -
accused is serving in the Ahmedabad District Co-operative
Bank Ltd. Prior to three years from the date of complaint, the
amount of Rs.10 lacs was lent by the appellant and for
payment of the aforesaid amount, the cheque was issued by
the respondent - accused dated 18.06.2021. The aforesaid
cheque was returned with an endorsement of "stopped
payment" and thereafter, the demand notice was issued below
Exh.10.
9. The aforesaid notice was replied by the respondent -
accused, which is produced below Exh.13 wherein, the accused
raised the contention that in the year 2015, amount of Rs.5
lacs was lent by the appellant to the respondent - accused and
at that time, the cheque bearing no.000062 was taken towards
the security. The aforesaid amount was repaid in the year
2017 and on demanding back the security cheque, evasive
reply was given. As the cheque was not returned, the same
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was stopped payment by giving an application with the bank
authority. It was contended in the reply of the demand notice
that the disputed cheque as well as the other cheques bearing
nos.000061, 000063, 000064, 000067 and 000068 for which
also, the stop payment application was given in the year 2018.
10. The contention of the appellant with regard to the stop
payment was corroborated with the endorsement made in the
memo of the disputed cheque. In addition to the above
contention raised in the demand notice, the accused had
cross-examined the complainant wherein, the following
admission was made by the complainant:-
(i) I am maintaining the register where, if I
would lend the money, then the same would
be noted in the said register. It is true that on
whose presence, at which place and which
time, the money was lent, was not mentioned
either in the complaint, examination-in-chief or
in the notice. The note which is made with
regard to the lending of money is in my
mobile. It is true that I have not produced any
note in my complaint, examination-in-chief or
in the notice. I am filing the income tax return
and the money, which was lent to the
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respondent - accused is not shown in the
income tax returns. I did not produce any
income tax return on record.
(ii) It is true that the amount of Rs.10 lacs
was lent and was accepted. Corroborating the
same, no any evidence was produced. On the
question being raised that whether the
amount of Rs.5 lacs was lent in the year 2015?
The answer was given that I did not remember
the same.
(iii) It is true that in the year 2015, the
accused had given the security cheque. It is
denied that the amount was paid during the
year 2015 to 2017 in installments. On being
perused exh.8, the disputed cheque, he
replied that "I could not get an idea that the
amount and the name are written by the
different pens. I did not identify the signature
of the respondent - accused.
(iv) It is true that to show my source of
income, no any documents were placed on
record.
11. The complainant had further examined witness -
Vinodbhai Jethabhai Patel below Exh.14 - Branch Manager of
Ahmedabad District Co-operative Bank Ltd., Rakhial Branch.
From the evidence of this witness, no any incriminating
material was placed, which may help the complainant or the
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accused but, one fact he deposed is that "it is true that the
signature belongs to whom, I cannot state surely".
12. By cross-examining the complainant, to ascertain that
whether the presumption, which is in favour of the complainant
is rebutted or not. The use of the phrase "until the contrary is
proved" in Section 118 of the Act and use of phrase "unless
contrary is proved" in Section 139 of the Act is required to be
read with definitions of "may presume" and "shall presume" as
given in Section 4 of the Evidence Act. It makes clear that once
that presumptions to be raised under both the provisions are
rebuttable, then again, the burdon would be shifted on the
complainant to prove his case. When the presumption is
rebuttable, it only points out that the party on whom, lies the
duty of going forward with the evidence, on the facts
presumed and when the party has produced the evidence
fairly and reasonably tending to show that the real fact as
presumed, the purpose of presumption is over.
13. The accused in trial under Section 138 of the Act has two
options. He can either show that consideration and debt did
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not exist or that under the particular circumstances of the
case, the non-existence of consideration and debt is so
probable that a prudent man ought to suppose that no
consideration and debt is existed. To rebut the statutory
presumptions an accused is not expected to prove his defence
beyond reasonable doubt as is expected of the complainant in
a criminal trial. The accused may adduce direct evidence to
prove that the cheque in question was not supported by
consideration and that, there was no any debt or liability to be
discharged by him. However, the Court need not insist in every
case that the accused should prove the non-existence of
consideration and the debt by leading direct evidence
because, the existence of negative evidence is neither possible
nor contemplated. To disprove the presumptions, the accused
should bring on record such facts and circumstances, upon
consideration of which, the Court may either believe that the
consideration and debt did not exist or their non-existence was
so probable that a prudent man would under the
circumstances of the case, act upon the plea that did not exist.
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14. In the instant case, the contention of the complainant
that in the year 2021, the cheque was issued towards the
payment of the debt by the respondent - accused, was falsified
in the cross-examination wherein, the complainant himself had
admitted that the cheque is of the year 2015 and given
towards the security. The further question, which was put to
the complainant that whether the amount of Rs.5 lacs was lent
in the year 2015, was answered not in negative but, he said
that "I did not remember it." It shows that the presumption,
which is in favour of the complainant was rebutted by creating
the circumstances in the cross-examination and the case, as
projected by the complainant is not the same.
15. In addition to this cross-examination, reply to the
demand notice was given wherein, it was contended by the
respondent - accused that for the cheque bearing no.000062,
stop payment application was given in the year 2018. It
suggests that the issuance of the cheque, as contemplated by
the complainant in the year 2021, is not true.
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16. With regard to the time barred debt, it is true that as per
Section 18 of the Limitation Act provides that when the
acknowledgment was given by the respondent - accused, fresh
limitation period would start from that day but, in the present
case, there was no any question of acknowledgment as the
complainant himself had admitted with regard to the issuance
of the cheque in the year 2015. By proving this, the accused
had brought the fact which appears to be probable and,
therefore, the burden to prove shifts again on the complainant.
The accused has not to prove the case beyond reasonable
doubt but, only the circumstances or the preponderance of
probability, is itself sufficient to dislodge the legal presumption
attached to the complainant. Once the respondent is able to
show the preponderance of probability to dislodge the legal
presumption, the burden again shifts on the complainant to
establish the passing of consideration. The respondent -
accused had, by creating the circumstances, successfully
rebutted the presumption and thereafter, though, again the
burden was shifted on the complainant to prove the case, he
remained fail in discharging the same. This Court has also
considered the decision rendered by the Hon'ble Apex Court in
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the case of Basalingappa V/s. Mudibasappa reported in
(2019) 5 SCC 418. Paragraph 25 is reproduced herein below:-
25. We having noticed the ratio laid down by this
Court in the above cases on Section 118(a) and
139, we now summarise the principles enumerated
by this Court in the following manner:
25.1. Once the execution of cheque is admitted
Section 139 of theAct mandates a presumption that
the cheque was for the discharge of any debt or
other liability.
25.2. The presumption under Section 139 is a
rebuttable presumption and the onus is on the
accused to raise probable defence. The standard of
proof for rebutting the presumption is that of
preponderance of probabilities.
25.3. To rebut the presumption, it is open for the
accused to rely on evidence led by him or the
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.
25.4. 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.
25.5. It is not necessary for the accused to come in
the witness box to support his defence."
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17. Considering the above judgment and the overall
circumstances of the case, this Court is of the view that the
judgment and order of acquittal passed by the learned trial
Court is in accordance with law and there is no any illegality or
perversity found in the judgment and, therefore, the same is
required to be confirmed.
18. This being an acquittal appeal, as per the judgment
rendered by the Hon'ble High Court of Gujarat Court in the
case of State of Gujarat V/s. Jitendra C. Thakkar reported
in 2017 (4) GLR 3200 wherein it is held that when two views
are possible, the view which is in favour of the accused is to be
considered.
6.10 That in an appeal against acquittal filed under
Section 378 of the Code, 1973, as such there is no
limitation on the Appellate Court to review the
evidence. But at the same time, if on fact as well
as on law, conclusion drawn by the trial Court
based on appreciation of evidence unless
compelling, cogent and substantial reasons appear
for interference and when findings of the trial Court
are palpably wrong, manifestly erroneous or
demonstrably unsustainable, acquittal is not to be
reversed or disturbed. When acquittal is based on
the surmises and conjectures and not
substantiated by law and evidence on record, an
Appellate Court may re-appreciate and review the
entire evidence to see that undue benefit is not
given to the accused. Now, it is well settled that
even if two views are possible, the Appellate Court
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shall not ordinarily interfere with the judgment of
acquittal in a routine manner unless the judgment
of the trial Court is per se wrong on facts and on
law or perverse, substituting its own views by the
High Court is not permissible. That in case of
acquittal, it is to be borne into mind by the
Appellate Court that there is double presumption in
favour of the accused that firstly, presumption of
innocence in favour of a guilty on the premise that
every person should be presumed to be innocent
unless he is proved to be guilty by the Court of
Law, and secondly, when accused secures an
acquittal, such presumption of innocence is
reinforced and reaffirmed by the trial Court.
19. In view of the above discussion, this appeal fails and the
judgment and order of acquittal dated 03.04.2023 passed by
the learned Additional Chief Metropolitan Magistrate, N.I.A.
Court No.36, Ahmedabad in Criminal Case No.95307 of 2021 is
hereby confirmed.
20. Record and Proceedings be sent back to the concerned
learned trial Court.
(M. K. THAKKER,J)
Hitesh
