Gujarat High Court
Shiram Finance Ltd Thro Pritesh ... vs State Of Gujarat on 28 April, 2025
NEUTRAL CITATION
R/CR.MA/10372/2024 ORDER DATED: 28/04/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR LEAVE TO APPEAL) NO. 10372
of 2024
In F/CRIMINAL APPEAL NO. 19279 of 2024
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SHIRAM FINANCE LTD THRO PRITESH MUKESHBHAI JHAKHARIYA
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR MANISH J PATEL(2131) for the Applicant(s) No. 1
MS NAMRATA R MULCHANDANI(9956) for the Applicant(s) No. 1
MR HARSHIL C DATTANI(6241) for the Respondent(s) No. 2
MS. JIRGA JHAVERI, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MS. JUSTICE S.V. PINTO
Date : 28/04/2025
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
12.04.2024 passed by the learned 10 th Additional Judicial
Magistrate First Class, Jamnagar (hereinafter referred to as
the "learned Trial Court") in Criminal Case No. 7325 of
2018, whereby the respondent No. 2 - original accused came
to be acquitted from the offence under Section 138 of the
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Negotiable Instruments Act, 1881 (hereinafter referred to as
'the N I Act").
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 filed a complaint against the accused
under Section 138 of the Act, as the accused had taken a
loan of Rs.5,50,000/- from the applicant on a vehicle with
registration number GJ09Y6408 and the agreement value of
Rs.7,48,728/- was executed. The loan was to be repaid in
33 installments and as per the account ledger an amount of
Rs. 21,43,128.96/- was due. The accused had issued
cheque No.180638 for the amount of ₹21,00,000/- dated
07.08.2018 from his account with Corporation Bank,
Jamnagar Branch. The applicant deposited the cheque in
his account and the cheque was dishonored and the reason
mentioned in the return memo dated 08.08.2018 was
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"Account Blocked". The applicant sent the statutory demand
notice to the accused on 25.08.2018 which was duly served
on 31.08.2018 and no payment was made and hence the
applicant filed the criminal complaint before the Court of
the Judicial Magistrate First Class, Jamnagar under Section
138 of the N I Act, 1881 which was registered as Criminal
Case no. 7325 of 2018.
2.2 The accused was served with the summons and the
accused appeared before the learned Trial Court and after
his plea was recorded at Exh. 23 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 at Exh. No.
42 was filed, the further statement of the accused under
Section 313 of the Code of Criminal Procedure was
recorded. The accused examined witness Jagandarpalbhai
Rabinderpal Singh Assistant Manager, Union Bank of India,
Manek Center Branch and produced 01 documentary
evidence in his defence and after the arguments of the
learned advocates for both the parties were heard, by the
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impugned judgment and order, the learned Trial Court
acquitted the accused from the offence under Section 138 of
the N I 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. Manish J. Patel appearing
for the applicant, learned APP Ms. Jirga Jhaveri for the
respondent - State and learned advocate Mr. Harshil
Dattani appearing for the respondent No. 2.
5. Learned Advocate Mr. Manish J. Patel for the applicant
submits that the learned Trial Court has not appreciated
that the applicant has successfully established that the
cheque in question was issued by the accused from the
bank account maintained by him. The applicant has proved
that the cheque was written by the accused and it was
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dishonoured and as the applicant is the holder in due
course of the cheque in question the statutory presumption
under Section 139 of the N I Act is to be drawn in favour of
the applicant. The learned Trial Court has not appreciated
the provisions of Section 118 and 138 of the NI Act in
proper perspective. The fact of the amount paid by the
applicant to the accused is not negated, but the learned
Trial Court has disbelieved the same. The accused had
failed to rebut the presumption and hence the judgement
and order of acquittal is bad in law and the leave to appeal
must be granted.
6. Learned APP Ms. Jirga Jhaveri for the respondent -
State and learned advocate Mr. Harshil Dattani appearing
for the respondent No.02 have submitted that the learned
Trial Court has appreciated all the evidence in detail in light
of the citations referred to in the judgement and has passed
the judgement and order of acquittal which is proper and no
interference is required and hence the application for leave
to appeal must be rejected.
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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 which 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
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
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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 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:
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(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.
(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.
24. xxxx
25. xxxx
26. xxxx
27. xxxx
28. We are of the view that when evidence was led before
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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 and
considering the arguments advanced by the learned
advocates for the parties and on perusal of the record of the
case the affidavit of examination in chief of the applicant
has been produced at Exh. 05 wherein the applicant has
narrated the facts of the complaint on oath. The applicant
has produced the Loan cum Hypothecation Agreement at
Exh. 31 and the Statement of Accounts at Exh. 32 and
during the cross examination by the learned advocate for
the accused, the applicant has stated that as per the Loan
cum Hypothecation Agreement 33 installments including
the principal amount and interest was to be paid and in the
loan agreement at Exh. 31 it is not stated that after the 33
installments interest would be charged. The time period for
the 33 installments was concluding on 20.03.2016 and in
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the statement of account produced at Exh. 32 the date of
loan is 18.06.2013 wherein the loan amount is ₹5,50,000/-
and the amount of interest is ₹1,98,728/-. As per this
document produced at Exh. 32 on 20.03.2016, the date on
which the 33 installments were to conclude the total
amount outstanding was ₹11,80,667/- and as per the Loan
cum Hypothecation Agreement the loan value was
₹7,48,728/-. That if the customer does not pay any amount
of the loan it would be a non starter, and no evidence as to
how the amount of ₹21,00,000/- was outstanding has been
produced. Moreover, the witness has stated that they do not
give any loan in cash to the customer, but the amount of
loan is deposited in their account by NEFT. The amount of
loan would be deposited in the account of the person who
has taken the loan and the amount would be debited from
their account but he was not ready to produce his
statement of account to show that the loan amount of
₹5,50,000/- was debited from his account and credited to
the account of the accused.
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8.1 The accused has examined witness Jagandarpalbhai
Rabinderpal Singh at Exh. 48 and the witness was working
as Assistant Manager, Union Bank of India, Manek Center
Branch and he has produced the statement of the account
of the accused from 20.05.2013 to 22.08.2023. In the
Statement of Account produced at Exh. 50 there is no entry
of ₹5,50,000/- being deposited in his account. During the
cross examination by the learned advocate for the applicant
the witness has stated that in the statement produced at
Exh. 50 an amount of ₹2,71,814/- was deposited by cheque
of Axis Bank on 28.06.2013 and ₹2,70,000/- was deposited
by cash on 29.06.2013 and he did not have information as
to who had deposited the account in the amount.
8.2 During the cross examination of the applicant the
presumption has been successfully rebutted by the accused
and the applicant has not been able to produce any
documentary evidence to show that the loan amount of
₹5,50,000/- was in fact given to the accused and as to how
the amount of ₹21,00,000/- which was the amount of
cheque was calculated by the applicant. In the entire
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evidence there is no iota of evidence as to how the amount
of ₹5,50,000/- was advanced to the accused by the
applicant and the learned Trial Court has discussed all the
oral and documentary evidences in detail.
9. On appreciation of the entire evidence of the applicant
on record it appears that the version of the applicant is not
believable and the accused has successfully rebutted the
presumption. The accused has successfully proved his
defence and the learned Trial Court has held that the
applicant has been unable to prove the legally enforceable
debt of Rs.21,00,000/- and the applicant has not proved
that the amount of Rs.5,50,000/- was given as loan to the
accused. The learned Trial Court has held that the accused
has successfully rebutted the presumption under Section
139 of the N I Act. In light of the judgements of the Apex
Court in the Rangappa (supra) and Basalingappa (supra) no
offence is made out under Section 138 of the N I Act and as
the applicant has failed to produce reliable and cogent
evidence on record about the amount of cheque being the
legally recoverable debt from the accused and the applicant
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has not proved his case beyond reasonable doubt and, 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.
10. Consequently, the present application seeking leave to
present an appeal under Section 378(4) of the Code of
Criminal Procedure, 1973 fails and is hereby dismissed.
11. Record and proceedings if any, be sent back to the
learned Trial Court forthwith.
12. 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)
VASIM S. SAIYED
