Gujarat High Court
Arvindkumar Jayantibhai Dabhi vs Ankitbhai Hamirbhai Rathod on 20 February, 2025
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R/CR.MA/16377/2024 ORDER DATED: 20/02/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR LEAVE TO APPEAL) NO. 16377
of 2024
In F/CRIMINAL APPEAL NO. 16292 of 2024
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ARVINDKUMAR JAYANTIBHAI DABHI
Versus
ANKITBHAI HAMIRBHAI RATHOD & ANR.
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Appearance:
MR YOGIN A BHAMBHANI(6444) for the Applicant(s) No. 1
ANAND S TAILOR(9021) for the Respondent(s) No. 1
Mr. Bhargav Pandya, APP for the Respondent(s) No. 2
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CORAM:HONOURABLE MS. JUSTICE S.V. PINTO
Date : 20/02/2025
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
31.01.2024 passed by the learned Judicial Magistrate First
Class, Mehemdabad in Criminal Case No. 157 of 2021,
whereby the original accused - respondent no. 2 herein
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").
1.1 The respondent no. 2 is hereinafter referred to as "the
accused" as he stood in the original case for the sake of
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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 belong to the same
community and were known to each other and the applicant
had given an amount of ₹9,40,000/- to the accused on his
demand. The applicant had taken an amount of
₹4,30,000/- from his relative Kanubhai Mangalbhai Vankar
and an amount of ₹2,60,000/- from his friend Jitendrabhai
Dashrathbhai Makwana. The accused had given cheque no.
782520 dated 09.12.2020 from his account with State Bank
of India, Kheda Branch and the cheque was deposited by
the applicant in his account with Bank of Baroda,
Mehmedabad Branch on 18.12.2020. The cheque returned
unpaid with the endorsement "No Such Account" and the
applicant gave the demand statutory notice through his
advocate to the accused on 12.01.2021 by R.P.A.D. The
notice was duly served to the accused but the accused did
not repay the amount and hence the applicant file the
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complaint before the Court of the Judicial Magistrate First
Class, Mehemdabad under Section 138 of the NI act.
2.2 The accused was served with the summons and
appeared before the learned Trial Court and his plea was
recorded at Exh. 8 and the evidence of the applicant was
taken on record. The applicant was examined on oath at
Exh. 4 and three witnesses were examined on oath at Exhs
15, 18 and 22, and 10 documentary evidences were
produced in support of his case and after the closing pursis
was filed at Exh. 24, the further statement of the accused
under Section 313 of the Code of Criminal Procedure was
recorded, wherein, the accused stated that the facts in the
examination-in-chief and in the complaint are false, and a
false complaint has been filed and no such transaction was
entered into and no cheque was issued as stated in the
complaint. The arguments of the learned advocates for both
the parties were heard and by the impugned judgment and
order, the learned Trial Court acquitted the accused from
the offence under Section 138 of the NI Act.
3. Being aggrieved and dissatisfied with the same, the
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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. Yogin A. Bhambhani
appearing for the applicant and learned APP Mr. Bhargav
Pandya for the respondent - State and Mr. Anand S. Tailor
for the accused.
5. Learned Advocate Mr. Yogin A. Bhambhani 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 dishonoured and as the applicant is the holder in due
course of the cheque in question, the statutory presumption
under Section 139 of the NI Act is to be drawn in favour of
the applicant. The learned Trial Court has not appreciated
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the provisions of Section 118 and 138 of the NI Act in
proper perspective. The oral contract is not negated by the
accused and the fact of the amount 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 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 must
be granted.
6. Learned APP Mr. Bhargav Pandya and Mr. Anand S.
Tailor for the accused 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.
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
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para 14 which is 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
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
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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.
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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 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
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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
considering the arguments advanced by the learned
advocates for the parties and on perusal of the record of the
case, it is the case of the applicant that he had given the
amount in cash after taking an amount of ₹4,30,000/- from
Kanubhai Mangalbhai and ₹2,60,000/- from Jitendrabhai
Dashrathbhai. The applicant has examined Kanubhai
Mangalbhai at Exh. 15 Jitendrabhai Dashrathbhai
Makwana at Exh.18. Besides, the oral say of these
witnesses, there is no evidence on records to prove that the
applicant could pay a huge amount of ₹9,40,000/- to the
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accused. The applicant has admitted in the cross-
examination that he is married and has one son and
parents and his monthly salary is ₹12,000/- per month and
he is working as a security guard in the SBI ATM at
Mehemdabad Railway Station. In the cross-examination, the
applicant has stated that in the complaint he has not given
the names of his witnesses and has not stated whether the
amount was paid in cash or by cheque and has not stated
when the financial transaction had taken place. That he had
deposited the cheque in his account on 18.12.2020 and the
accused had closed his account in the year 2018.
8.1 Witness Kanubhai Mangalbhai Vankar examined at
Exh. 15 and witness Jitendrabhai Dashrathbhai Makwana
examined at Exh. 18 have merely stated that they had given
the amount of ₹4,30,000/- and ₹2,60,000/- but there is no
iota of evidences as to how the amount was given by them
and during the cross-examination have admitted that they
have come to depose on the say of the applicant.
9. The learned Trial Court has appreciated all the
evidence produced by both the parties and has concluded
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that the applicant has not proved how the amount was paid
to the accused and the applicant has not produced any
evidence as to how a huge amount of Rs. 9,40,000/- was
given when he had no financial capacity to lend the amount.
The salary of the applicant was only Rs.12,000/- per month
and though the applicant has put up a case that he had
borrowed the amount from Kanubhai Mangalbhai Vankar
and his friend Jitendrabhai Dashrathbhai, they both have
admitted on oath that they had no evidence to prove that
the amount was given to the applicant.
10. The learned Trial Court has relied upon the law laid
down by the Apex Court in the case of Rev. Mother Merikuti
Vs Reni C Kotaram and Ors. reported in 2013 1 DCR 577,
John K Abraham Vs Simons C Abraham reported in SCC
2014 2 236, J Jukesh Sahegal Vs Shamsher Singh Gogi
reported in 2009 2 DCR 296 and K. Prakashan Vs P. K.
Sundaran reported in 2008 1 GLH 362 and in light of the
same, has concluded that from evidence on record, the
accused had created reasonable doubt and the applicant
has failed to produce reliable and cogent evidence on record
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about the legally recoverable debt from the accused and the
applicant has not proved his case beyond reasonable doubt.
The learned Trial Court has concluded that the accused has
successfully rebutted the presumption based on
preponderance of probability 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.
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. Notice stands discharged. Record and proceedings if
any, be sent back to the learned Trial Court forthwith.
13. 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
