Gujarat High Court

Shriram Transport Finance Co. Limited ... vs State Of Gujarat on 27 September, 2024

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                           R/CR.A/2230/2024                                  JUDGMENT DATED: 27/09/2024

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                                    IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                             R/CRIMINAL APPEAL (AGAINST ACQUITTAL) NO. 2230 of 2024

                       FOR APPROVAL AND SIGNATURE:

                       HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK                               Sd/-
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                       1     Whether Reporters of Local Papers may be allowed                     Yes
                             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                    No
                             of law as to the interpretation of the Constitution
                             of India or any order made thereunder ?

                       ================================================================
                           SHRIRAM TRANSPORT FINANCE CO. LIMITED THRO POA NILESH
                                            JHADAVBHAI JUNGI
                                                  Versus
                                         STATE OF GUJARAT & ANR.
                       ================================================================
                       Appearance:
                       MR MANISH J PATEL(2131) for the Appellant(s) No. 1
                       MR YUVRAJ BRAHMBHATT APP for the Opponent(s)/Respondent(s) No. 1
                       ================================================================
                        CORAM:HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
                                                         Date : 27/09/2024

                                                         ORAL JUDGMENT

1. This Court has granted application for Leave to Appeal

today. Hence, ADMIT. Mr. Yuvraj Brahmbhatt, learned

APP waives service of notice of admission on behalf of the

respondent No.1- State of Gujarat. With consent of the

parties the Appeal is taken up for hearing today.

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2. The appellant has preferred the present Appeal

under Section 419 of the Bhartiya Nagrik Suraksha

Sanhita (for short "B.N.S.S.") against the judgment and

order of acquittal dated 5.8.2024 passed by the learned

4th Additional Senior Civil Judge and Additional Chief

Judicial Magistrate, Porbandar (hereinafter be referred to

as "the trial Court") in Criminal Case No. 6214 of 2022,

whereby the respondent No.2-original accused was

acquitted from the charges levelled against him under

Section 138 of the Negotiable Instrument Act, 1881.

3. In present Appeal the appellant original complainant

has prayed for following relief/s:-

"(a) Your Lordship may please to admit and allow this criminal appeal.

(b)Your Lordship may be pleased to quash and set aside the impugned judgment and order dated 05.08.2024 passed in criminal case no. 6214 of 2022 by the Ld. 4th Addl. Chief Judicial Magistrate, Porbandar, and further be pleased to convict the original accused - present resp.

No.2 for the offence punishable u/s 138 of The Negotiable Instrument Act.

(c) To pass any other and further reliefs in favour of the appellant, as deemed just and proper in the interest of justice."

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4. It is the case of the appellant that the appellant is a

finance company incorporated under the Companies Act,

19856. On 14.9.2015, the accused had taken Vehicle Loan

of Rs. 3,38,383/- from the appellant for purchasing the

Innova Car bearing registration No. G.J. 12J 5808, vide

agreement No. PORBA0509120006.

4.1 The said amount of loan has to be repaid by the

accused in 33 EMIs. However, the accused has failed to

repay the said amount and therefore, an amount of Rs.

5,01,989/- was due and payable.

4.2 For that, the accused had given a cheque of

Rs.2,50,000/-, bearing No.029578 dated 8.10.2022 of Axis

Bank Ltd., Porbandar Branch. However, when the cheque

was deposited for clearing, on 10.10.2022 the said

cheque was returned with endorsement that "Account

Blocked" and therefore, the complainant had given notice

on 9.11.2022 to the accused however, the said notice was

not replied by the accused and therefore, the complainant

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has filed complaint under Section 138 of the Negotiable

Instrument Act, 1881 against the accused.

4.3 The said complaint was registered as Criminal Case

No. 6214 of 2022 before the trial Court and the trial

Court vide order dated 5.8.2024 acquitted the present

respondent No.2-accused.

4.4 Being aggrieved and dissatisfied with the above order

of acquittal, the original complainant has filed present

Appeal and prayed for above mentioned relief/s.

5. Heard Mr. Manish J. Patel, learned Counsel for the

appellant and Mr. Yuvraj Brahmbhatt, learned APP for the

respondent No.1.

6. Mr. Manish J. Patel, learned Counsel for the appellant

has submitted that the Trial Court has not properly

interpreted the evidence on record. He has further

submitted that there is presumption under Section 118

and 139 of the N.I. Act against the accused and he has to

rebuttal the same, which he failed to do and the same has

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never been considered by the trial Court in its true and

proper spirit.

6.1 Mr. Manish J. Patel, learned Counsel for the appellant

has submitted that the accused never denied his

signature nor he has established that, he has paid the

loan which he had availed, but all the aspects never been

dealt with by the trial Court and acquitted the accused.

He has also submitted that the accused has not produced

any valid documents or any strong evidence to support

his case. He has submitted that on the contrary, the

complainant has produced all the required documents

and examined various people to support his case however,

all such aspect has never been properly considered by the

trial Court

6.2 Mr. Manish J. Patel, learned Counsel for the appellant

has submitted that the accused has availed facility of loan

from the complainant company and also entered into an

agreement and amount shown as debt, however all these

evidence has never been properly dealt with by the trial

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Court and acquitted the accused. He has submitted that

the trial Cour,t while framing the issues have negatively

dealt with the issue that the complainant has failed to

prove that he owes legally enforceable debt and only on

presumption the trial Court has acquitted the accused.

6.3 In view of the above submissions, Mr. Manish J. Patel,

learned Counsel for the appellant urges before the Court

that present Appeal may be allowed and the impugned

order of acquittal passed by the trial Court may be

quashed and set aside.

7. Mr. Yuvraj Brahmbhatt, learned APP for the respondent

State of Gujarat has submitted that the trial Court has

passed impugned order without considering the relevant

aspect. He has submitted the impugned order is not in

consonance with the settled legal principle as well as trial

Court has not appreciated the evidence in its true and

proper spirit and therefore, the impugned order of

acquittal passed by the trial Court may be quashed and

set aside and the Appeal may be allowed.

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8. I have perused the relevant material and documents

placed on record. I have also gone through the record of

the Appeal and the impugned judgment and order passed

by the trial Court with relevant documents appended

thereto.

9. It appears that after considering oral as well

documentary evidence and arguments advanced by both

the sides, the trial Court has framed two issues which are

as under:-

(1) Whether the plaintiff proves beyond reasonable doubt that the accused has taken a vehicle loan from the plaintiff company and the accused has given a cheque against the legal debt or obligation to repay the outstanding amount of the loan and the said cheque has returned unpaid when deposited by the plaintiff and after returning the same, under required notice the amount was demanded and it was not complied with and therefore, present complaint has been filed and for that whether the accused has committed an offience punishable under Section 138 of the negotiable instrument Act 1981.

(2) Whether the accused proves the fact in such a way that a man of ordinary intelligence could understand (preponderance of probability) that the cheque which

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the plaintiff claims to have issued was not issued in such a manner and on such legal dues.

10. It appears that the trial Court has rightly dealt with

the aforesaid two issues and after considering the oral as

well as documentary evidence in light of the issues

framed by the trial Court, the trial Court has come to a

conclusion that the amount was to be repaid in June 2018

by 33 installments by the accused however, after 2016 the

respondent accused has not paid installments regularly

and therefore, the same is due and payable from June

2018 and present appellant original complainant has not

initiated the proceedings under the period of limitation

i.e. 3 years and therefore, the Court has acquitted the

present respondent original accused.

11. Further in the similar set of facts, the Coordinate

Bench of this Court has considered the similar issue in

the judgment and order dated 14.2.2023 passed in

Criminal Appeal No. 35 of 2008, wherein the Coordinate

Bench of this Court has observed as under:-

"11. In the light of the evidence which has come on record, one thing is evident that even according to the

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complainant, whatever amount was paid to the accused was between the periods 1991 to 1997. The complainant has nowhere stated any details regarding the time and the manner in which such amounts were paid. It appears to be the case of the complainant that he is entitled to recover Rs.42 lakhs from the accused towards outstanding dues. Evidently therefore, the period of limitation for instituting a suit for recovery of such amount would commence from the date on which the said amount was given to the accused, which would be different dates ranging from 1991 to 1997. Even taking the last date namely, the year 1997 into account, the cheques which are alleged to have been issued in the year 2002 have clearly been issued after the period of limitation for instituting any proceedings for recovery of such amount had elapsed. Evidently therefore, the cheques had been issued in respect of time-barred debts. The explanation to section 138 of the Act provides that for the purpose of the said section, "debt or liability" means a legally enforceable debt or other liability. Under section 138 of the Act, if any cheque issued in respect of any debt or liability is dishonoured, the person who has issued such cheque would be liable to be punished under the said provision. Therefore, the fact as to whether the cheque has been issued in respect of a legally enforceable debt is a very relevant factor for adjudicating any proceeding under section 138 of the Act. In Smt. Ashwini Santosh Bhatt v. Shri Jeevan Divakar (supra), the Bombay High Court has held that a cheque which was issued after the expiry of three years from the date of the loan was in respect of a time-barred debt and dishonour of the said cheque would not attract section 138 of the Act.

12. In Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54, the Supreme Court has held that section 138 of the Act has three ingredients viz. (i) that there is a legally enforceable debt; (ii) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes a legally enforceable debt; and (iii) that the cheque so issued had been returned due to insufficiency of funds. The proviso appended to the said section

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provides for compliance with legal requirements before a petition can be acted upon by a court of law. Section 139 of the Act merely raises a presumption in regard to the second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption under section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability. It was further held that whereas the prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is "preponderance of probabilities".

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 he relies. A statutory presumption has an evidentiary value. The question as to whether the presumption whether stood rebutted or not, must, therefore, be determined keeping in view the other evidence on record.

13. The facts of the present case are to be evaluated in the light of the principles laid down in the above referred decision. Thus, for the purpose of falling within the ambit of section 138 of the Act, one of the ingredients which is required to be satisfied is that there is a legally enforceable debt. In the facts of the present case, as noted earlier, the amounts in question had been paid during the period 1991 to 1997, under the circumstances, the period of limitation which is three years had clearly expired by the end of the year 2000. Therefore, the cheques which were issued in the year 2002, evidently were issued in respect of time-barred debts. In view of the explanation to section 138 of the Act, a debt or liability referred to in section 138 of the Act means a legally enforceable debt. Under the circumstances, even if the case of the complainant is accepted that such cheques had, in fact, been issued by the accused towards a debt of Rs.42 lakhs, even then, the same would be relatable to a time-barred debt and, therefore, cannot be said to have been issued in respect of a legally enforceable debt. The provisions of section

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138 of the Act would, therefore, not be attracted in the facts of the present case.

14. The Andhra Pradesh High Court in Girdhari Lal Rathi v. P.T.V. Ramanujachari & another, 1997 (2) Crimes 658 on which reliance had been placed by the learned Magistrate in the impugned judgment, has held that in case a cheque is issued for a time-barred debt and it is dishonoured, the accused cannot be convicted under section 138 of the Negotiable Instruments Act simply on the ground that the debt was not legally recoverable. This court is in complete agreement with the view adopted by the Andhra Pradesh High Court."

12. In the impugned judgment and order, the trial Court

has discussed the evidence in great length and detail and

has given reasons in support of each of the findings

recorded byit. On behalf of the appellant, nothing has

been pointed out to show that the findings recorded by

the learned Magistrate are, in any manner, perverse.

13. The trial Court has also observed that the debt in

question was a time barred debt. Further, it reveals that

from 2016, the respondent accused has not paid the

installments regularly and if the cause was to be

considered from 2016 then the complaint was required to

be filed within period of three years i.e. 2019 and instead