Gujarat High Court
Bhadresh Mahendrabhai Manvawala vs State Of Gujarat on 7 February, 2025
NEUTRAL CITATION
R/CR.MA/24085/2022 ORDER DATED: 07/02/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC. APPLICATION NO. 24085 of 2022
(FOR LEAVE TO APPEAL)
In
R/CRIMINAL APPEAL NO. 2624 of 2022
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BHADRESH MAHENDRABHAI MANVAWALA
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MS MITA S PANCHAL(530) for the Applicant(s) No. 1
MR ARPIT A KAPADIA(3974) for the Respondent(s) No. 2
MR BHARGAV PANDYA, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MS. JUSTICE S.V. PINTO
Date : 07/02/2025
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 23.08.2022 passed by
the learned 2nd Additional Senior Civil Judge and Additional Chief
Judicial Magistrate, Surat in Criminal Case No. 52519 of 2018,
whereby the respondent No 2 original accused came to be
acquitted from the charge levelled against him under Section 138
of the Negotiable Instruments Act, 1881 (hereinafter referred to as
'the NI Act"). 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.
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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 friendly
loan of Rs.50,00,000/- from the applicant during the period
November -2015 to May 2018 on different occasion for his personal
need. The accused filed bogus complaint against the applicant to
avoid making payment at Lal Gate Police Station and the matter
was settled and the accused issued three cheques bearing nos.
000164, 000165, 000167 from his account with Bank of Baroda,
Bhaga Talav Branch, Surat of rupees each for 10 lakhs each all
dated 24th August 2018. The applicant deposited the said cheques
on 24.08.2018 in his bank and they were dishonored and the
reason mentioned in the return memo dated 27.08.2018 of all
cheques was "Funds Insufficient". The applicant sent the statutory
demand notice to the accused on 11.09.2018 against which no
reply was given and no payment was made though it was served on
14.09.2018 and 18.09.2018. The applicant filed the criminal
complaint before the Court of the Chief Judicial Magistrate, Surat
under Section 138 of the N.I.Act, 1881 which was registered as
Criminal Case no. 52519 of 2018.
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2.2 The accused was served with the summons and
appeared before the learned Trial Court and his plea was recorded
and the evidence of the applicant was taken on record. The
applicant was examined as a witness and 05 documentary
evidences were produced in support of the case and after the
closing pursis at exhibit 36 was filed. The further statement of the
accused was recorded under Section 313 of the Code of Criminal
Procedure in which he pleaded that the blank cheques were given
as a security and the applicant has filed a false complaint and has
failed to prove the case. The applicant has not produced any
evidence to show that the amount has been given to accused. 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 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
considered and interpreted evidence on record and presumption of
Sections 118 and 139 of the Act.
4. Heard learned advocate Ms. Mita S. Panchal appearing
for the applicant and learned APP Mr. Bhargav Pandya for the
respondent - State and learned advocate Mr. Arpit A. Kapadia for
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the respondent No.2.
5. Learned Advocate Ms.Mita Panchal for the applicant
submits that the deposition of the applicant has been recorded at
exhibit 4 and the issuance of the cheques and the signatures have
not been disputed, except at the time of recording of the further
statement under Section 313 of the Code of Criminal Procedure.
The accused has not replied to the statutory notice and has not set
out his defence and the learned Trial Court ought to have convicted
the accused, but the learned Trial Court has given over weightage
to the cross examination of the applicant by coming to a conclusion
that the applicant has not produced any evidence to show his
financial capacity to lend the amount to the accused. The accused
has not disputed the signatures on the cheques and the
presumption under Section 118 and 139 of the N I Act must be
raised in favour of the applicant and the applicant has proved that
he has lent the amount on different dates of different amounts
during the year 2015 to 2018. Learned advocate submits that the
impugned judgement is illegal and bad in law and hence leave to
appeal must be granted.
6 Learned APP Bhargav Pandya for the respondent No. 1
and learned advocate Mr. Arpit Kapadia for the respondent No. 2
have submitted that the learned Trial Court has considered all the
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evidence in proper perspective and it is on record that the
respondent No. 2 has successfully rebutted the facts of the
complaint and has raised a probable defence during the cross
examination of the applicant. It is settled law that the accused is
not required to prove his defence beyond reasonable doubts but is
required to rebut the presumption up to the extent of
preponderance of probability which has been successfully carried
out by the respondent No.2 during the cross-examination of the
applicant. There is no perversity or illegality in the impugned
judgment and order and no interference is required and hence the
application of the applicant must be rejected.
7. Since this is an application seeking leave to appeal
against an order of acquittal, at this juncture, it would be fit to
refer the settled principles of laws in cases filed under the NI Act.
7.1 With regard to the facts in the present case, we can
also refer to the following observations made Apex Court in
Rangappa vs Sri Mohan reported in (2010) 11 SCC 441 in Para
14 wherein it is observed 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
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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 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."
7.2 The Apex Court in Tedhi Singh vs Narayan Dass
Mahant reported in (2022) 6 SCC 735 has observed 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
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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. "
7.3 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.
(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
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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 as per the case
of the applicant, the applicant had given the amount of
Rs.50,00,000/- to the accused during the period, November 2015
and May 2018 towards which the cheques in question have been
given by the accused. The applicant has deposed as per the
complaint and during the cross-examination by the learned
advocate for the accused, the applicant has stated that his yearly
income is about Rs.25,00,000/- to Rs.30,00,000/- and he is filing
his income tax returns from 1999. That he had given the amount in
pieces to the accused but has not stated the dates on which what
specific amount was given to the accused in his notice, complaint
or examination in chief. That he had not given the amount by
cheque and had not executed any promissory note agreement or
any document for the amount given to the accused. That no
witness was present at the time when the amount was given and it
is within his knowledge that as per the income tax rules, any
amount above Rs.20,000/- has to be given by cheque. That no
evidence is produced to show that he had withdrawn the amount
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from the bank and after demonetisation in 2016 only an amount of
Rs.2500/- could be withdrawn from the bank. The notice,
complaint and examination in chief does not state the time period
for which the amount was given and he was not charging any
interest on the amount that was given to the accused. That all the
three cheques are of the same date and the handwriting on the
cheques seems to be different from the signature on the cheque.
That he does not remember the financial transactions before 2015,
and he had not kept any accounts of the amount of Rs.50,00,000/-
given in pieces to the accused during 2015 to 2018. That he has
not shown this amount in his income tax returns and he has not
produced any government or semi government documentary
evidence to show that the amount is due from the accused.
8.1 The accused has successfully rebutted the presumption
during the cross examination of the applicant and has brought on
record that the applicant has not kept any accounts for the amount
alleged to have been loaned to the accused. The amount as stated
by the applicant is a huge amount of Rs.50,00,000/- and the
applicant has stated that the amount was given without interest.
The applicant has not stated the dates and the exact amounts that
were given on those dates and there is no clarification as to how
the amount of Rs.50,00,000/- has been arrived at by the applicant
as he does not have any written account of the amounts given. As
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per the law settled in the case of Tedhi Singh (Supra) and
Basalingappa (Supra) the accused can rebut the presumption to the
extent of preponderance of probability from the material brought
on record of the applicant and it is not necessary for the accused to
step into the witness box to prove his defence. Moreover, once the
financial capacity and the giving of the amount has been
challenged, it is incumbent on the applicant to produce evidence to
prove that he had given the amounts on particular dates. The
applicant has also stated that it was within his knowledge that any
transaction of more than Rs.20,000/- has to be given by cheque,
but has stated that he has given the huge amount of Rs.50,00,000/-
by cash and the same has not been shown in his income tax
returns.
9. The learned Trial Court has considered all the
documents produced by the applicant and has also considered that
the applicant has not produced any evidence to show his capacity
to lend such huge amount of Rs.50,00,000/- in cash. and as there is
no evidence produced by the applicant about the lending of the
huge amount of Rs.50,00,000/- in cash to the accused and has
sconcluded that the applicant has not proved the case beyond
reasonable doubts. In light of the same the learned Trial court has
relied on observation made by Apex court in cases of Basalingappa
(supra), K. Subramani vs K. Damodar Naidu reported in (2015) 1
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SCC 99, K. Prakashan vs P. K. Surendran reported in 2008 1 SCC
258, APS Forex Services PVT. LTD. Vs Shakti International Fashion
Linkers & Ors reported in 2020 AIR(SC) 0 945 and Tedhi Singh
(supra), and 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
prevent an appeal under section 378(4) of the Cr.P.C. fails and
hereby dismissed.
11. 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
