Gujarat High Court
Gautam Shamjibhai Badhani vs State Of Gujarat on 11 August, 2025
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R/CR.MA/23861/2024 ORDER DATED: 11/08/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR LEAVE TO APPEAL) NO. 23861
of 2024
In F/CRIMINAL APPEAL NO. 31576 of 2024
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GAUTAM SHAMJIBHAI BADHANI
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR. MAULIK M SONI(7249) for the Applicant(s) No. 1
MR ROHAN N SHAH, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MS. JUSTICE S.V. PINTO
Date : 11/08/2025
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 passed by the learned
Additional Chief Judicial Magistrate, Nakhatrana Dist. Kachchh
(hereinafter referred to as "the learned Trial Court") in Criminal
Case No. 601 of 2019 on 08.01.2024, whereby the respondent No. 2
- original accused came to be acquitted from the offence under
Section 138 of the Negotiable Instruments Act, 1881 (hereinafter
referred to as 'the NI Act").
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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 had a friendly
relationship and the accused had taken an amount of Rs.9,50,000/-
as a hand loan in the year 2018. The amount was to be returned on
25.07.2019 and towards the outstanding amount, the accused had
issued cheque No. 919949 dated 03.08.2019 for the amount of
Rs.9,50,000/- from his account with Baroda (Dena) Gujarat Gramin
Bank, Nakhatrana Branch. The applicant deposited the cheque in
his account with Bank of Baroda, Nakhatrana Branch and the
cheque was dishonored and the reason mentioned in the return
memo was "Funds Insufficient". The applicant sent the statutory
demand notice to the accused on 23.08.2019 which was duly
served but no payment was made and hence, the applicant filed a
criminal complaint before the Court of the Judicial Magistrate First
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Class, Nakhatrana under Section 138 of the N I Act, 1881 which
was registered as Criminal Case No. 601 of 2019.
2.2 The accused was served with the summons and the
accused appeared before the learned Trial Court and his plea was
recorded at exhibit 08 and the entire evidence of the applicant was
taken on record. The applicant was examined on oath and 05
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 has denied all the contentions
alleged against him and stated that a false complaint has been
filed. The accused stepped into the witness box and was examined
on oath at exhibit 33 and produced 05 documentary evidence in
his defence and after the arguments of the learned advocates for
both the parties were heard, by the 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
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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 Ms. Honey Raval for learned
advocate Mr. Maulik Soni for the applicant and learned APP Mr.
Rohan N. Shah for the respondent - State.
5. Learned Advocate Ms. Honey Raval 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 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 139 of the NI Act in proper
perspective. The fact of the amount was paid by the applicant to
the accused is also not negated, but the learned Trial Court has
disbelieved the same. The accused had failed to rebut the
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presumption and the financial capacity of the applicant was never
put to challenge and hence the judgement and order of acquittal is
bad in law and the leave to appeal may be granted.
6. Learned APP Mr. Rohan N. Shah has 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 may be rejected.
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
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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 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:
(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.
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(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 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."
7.2 The Apex Court in the case of Dashrathbhai Trikambhai
Patel vs Hitesh Mahendrabhai Patel & Anr. reported in (2023) 1
SCC 578 has observed as under:
"30. In view of the discussion above, we summarise our findings
below:
(i) For the commission of an offence under Section 138, the
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cheque that is dishonoured must represent a legally
enforceable debt on the date of maturity or presentation;
(ii) If the drawer of the cheque pays a part or whole of the
sum between the period when the cheque is drawn and
when it is encashed upon maturity, then the legally
enforceable debt on the date of maturity would not be the
sum represented on the cheque;
(iii) When a part or whole of the sum represented on the
cheque is paid by the drawer of the cheque, it must be
endorsed on the cheque as prescribed in Section 56 of the
Act. The cheque endorsed with the payment made may
be used to negotiate the balance, if any. If the cheque that
is endorsed is dishonoured when it is sought to be
encashed upon maturity, then the offence under Section
138 will stand attracted;
(iv) The first respondent has made part-payments after the
debt was incurred and before the cheque was encashed
upon maturity. The sum of rupees twenty lakhs
represented on the cheque was not the 'legally
enforceable debt' on the date of maturity. Thus, the first
respondent cannot be deemed to have committed an
offence under Section 138 of the Act when the cheque
was dishonoured for insufficient funds; and
(v) The notice demanding the payment of the 'said amount
of money' has been interpreted by judgments of this
Court to mean the cheque amount. The conditions
stipulated in the provisos to Section 138 need to be
fulfilled in addition to the ingredients in the substantive
part of Section 138. Since in this case, the first respondent
has not committed an offence under Section 138, the
validity of the form of the notice need not be decided."
8. In light of the above settled principles of law and on
perusal of the record of the case as per the case of the applicant he
had given an amount of Rs.9,50,000/- as hand loan to the accused
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as the accused was in need for some finance. The amount was to
be repaid on 25.07.2019 and during the cross examination, the
applicant has stated that he is doing the business of farming and
has agricultural land at Nakhatrana, but immediately thereafter
has stated that he does not have any agricultural land in his
ownership, but is doing farming in others lands on contract. He is
not a farmer and he does not know in how many acres he doing
farming by contract. The applicant has stated that he is working
under one Piyushbhai and they grow castor seeds and cotton.
Earlier he had a shop and was doing the business of repairing
punctures in tyres of vehicles and he closed the same and is doing
farming for last five years. The applicant did not know what kind
of castor seeds were grow and did not know the amount of castor
seeds that was sold as the accounts for the past two years were not
made. The applicant could not remember how much amount he
had withdrawn for the past two years and besides farming he also
does the business of selling and buying vehicles and houses on
commission basis and last had received Rs.70,000/- as commission
for sale of a house before three years. The applicant has stated that
in the year 2015, he had sold his house in Kailashnagar for
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Rs.32,00,000/- and he had Rs.10,00,000/- with him in cash and had
given an amount of Rs.9,50,000/- to the accused, which were
currency notes in the denomination of Rs.500/- and Rs.2000/-.
8.1 During the cross-examination of the applicant, the
accused has raised the issue of financial capacity of the applicant
and the applicant has not produced any evidence regarding his
income. The applicant has stated that he does not know what
amount he has withdrawn and has stated that he had sold his
residential house in 2015 and the amount of Rs.9,50,000/- was
given to the accused as a hand loan in 2018 and he had the amount
of Rs.10,00,000/- in cash, lying with him for three years. The
applicant has also stated that the denomination of currency notes
of Rs.500/- and Rs.2000/- were given to the accused.
8.2 After the further statement of the accused was
recorded, the accused denied all the evidence on record and stated
that he does not know the applicant and the applicant is not his
friend. He had lost his cheque and had given a notice in the
newspaper. "Kachch Mitra" about the loss of his cheque. The
accused filed his affidavit of examination in chief at exhibit 33 and
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produced documents showing various cases filed against the
applicant at exhibit 29 to exhibit 33.
9. The learned trial court has discussed the evidence
produced by both the parties and has also considered the defence
raised by the accused and as far as the financial capacity of the
applicant is concerned has concluded that as per the say of the
applicant, the residential house was sold in the year 2015 and the
amount was given to the accused in the year 2018, but the fact was
not acceptable as the Government of India had announced
demonetization of all Rs.500/- and Rs.1000/- bank notes on
08.11.2016 and fresh currency notes of Rs.500/- and Rs.2000/- were
introduced and hence it was highly improbable that the amount of
Rs.10,00,000/- received in the year 2015 was given to the accused
in the year 2018, without depositing the same in the bank. Even
otherwise, the applicant has not produced any documentary
evidence to show that he had the financial capacity of giving a
huge amount of Rs.9,50,000/- as hand loan to the accused. The
learned Trial Court concluded that the accused has successfully
rebutted the presumption and raised a probable defence and the
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learned Trial Court has considered that it was incumbent on the
applicant to prove the transaction beyond reasonable doubts. In
the entire evidence on record the applicant has not been able to
prove that the amount of Rs.9,50,000/-was given to the accused
and from the evidence produced on record, the accused succeeded
in rebutting the presumption raised in favour of the applicant.
10. The learned Trial Court has appreciated all the
evidence produced on record and has concluded that the applicant
has not proved the legally enforceable debt and has concluded that
from evidence on record the applicant has successfully rebutted
the presumption under Section 139 of the N I Act in light of the
judgment of the Apex Court in Rangappa(supra) and
Basalingappa(supra). The accused had created a reasonable doubt
and 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 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
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not require any interference of this Court.
11. 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.
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)
F.S. KAZI
