Gujarat High Court
Ashish Bharatbhai Patel vs State Of Gujarat on 27 February, 2025
NEUTRAL CITATION
R/CR.MA/2759/2025 ORDER DATED: 27/02/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR LEAVE TO APPEAL) NO. 2759 of
2025
In F/CRIMINAL APPEAL NO. 44008 of 2024
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ASHISH BHARATBHAI PATEL
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MS.AKSHITABA SOLANKI(6782) for the Applicant(s) No. 1
MR. BHARGAV PANDYA, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MS. JUSTICE S.V. PINTO
Date : 27/02/2025
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 28.08.2024 passed by the learned 11 th Additional Judicial
Magistrate First Class, Surat in Criminal Case No. 54353 of 2022,
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 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 ₹ 10,00,000/- since
2020 on different occasion for his personal need. All these transactions
were entered into a notarized agreement in the form of promissory note
on 04.06.2022. The accused issued three cheques of The Zoroastrian Co.
Operative Bank Limited having account no. 104200100005606 by filing
details and signature on it. The applicant deposited cheque No. 061956
for Rs. 3,00,000/- on 13.07.2022 in his account with State Bank of India,
Adajan Branch, Surat and the same was dishonored with return memo at
exhibit 13 and as per instructions of the accused, the applicant deposited
the same cheque again which was dishonored and the reason mentioned
in the return memo at exhibit 14 dated 21.07.2022 was "Funds
Insufficient". The applicant sent the statutory demand notice to the
accused against which an evasive reply was given and no payment was
made though it was served. The applicant filed the criminal complaint
before the Court of the 11 th Additional Judicial Magistrate First Class,
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Surat under Section 138 of the NI Act, 1881 which was registered as
Criminal Case no. 54353 of 2022.
2.2 The accused was served with the summons and appeared before the
learned Trial Court and his plea was recorded at Exhibit 09 and 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 exhibit 26 was filed, the
further statement of the accused under Section 313 of the Code of
Criminal Procedure was recorded, wherein the accused denied the
averments of the evidences against him and stated that the applicant has
misused the cheque by falsely writing in it later on which was in the
possession of complainant and created forged documents and no amount
is to be paid by accused to applicant and accused has not given cheque for
any debt or liability and a false complaint had been filed. 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 NI 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
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has misread the evidence and the impugned judgment is perverse,
erroneous and contrary to law.
4. Heard learned advocate Ms. Akshitaba Solanki appearing for the
applicant and learned APP Mr. Bhargav Pandya for the respondent -
State.
5. Learned Advocate Ms. Akshitaba Solanki 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 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 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 Mr Bhargav Pandya 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
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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 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 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."
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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 summaries 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 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."
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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
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 the affidavit of examination in chief of
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the applicant is produced at exhibit 4, wherein the applicant has reiterated
all the contents of the complaint. During the cross-examination by the
learned advocate for the accused the applicant has stated that he has not
mentioned the date and the amount which was given to the accused in the
year 2020. That he has not produced any evidence to show that he had an
amount of ₹10,00,000/- in cash in the year 2020. He has also not shown
the reason for which the amount of ₹10,00,000/- was given to the
accused and he has not produced his Income Tax Returns for the financial
year ending 31.03.2020 and 31.03.2021. That besides the promissory
note, no other document has been executed for the transaction between
them. The accused had given cheque No. 061954 dated 12.06.2022,
cheque No. 061955 dated 20.06.2022 and cheque No. 061956 dated
27.06.2022 and they had returned unpaid , but he has not produced the
return memos of these cheques. Cheque No. 061954 was given on
10.06.2022 and the cheque in question in this case is dated 13.07.2022
and the date mentioned in the promissory note is different for which no
clarification is mentioned in the notice or complaint.
8.1 From the evidence of the applicant, it is on record that the cheque
in question was deposited twice by the applicant, but the applicant has not
produced the return memo that was received from the bank after the
cheque was returned for the first time and as per the promissory note
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produced at exhibit 11 the cheque in question is dated 24.06.2022, but the
cheque produced at exhibit 12 is dated 13.07.2022 and there is no
explanation on the part of the applicant regarding this difference in the
date. The applicant has admitted that the cheque was first returned on
27.06.2022, but the applicant has failed to explain how the cheque dated
13.07.2022 could be returned unpaid by the bank on 27.06.2022. The
applicant has suppressed the first return memo from the Court and there is
nothing on record to show that the applicant had a huge amount of
₹10,00,000/- in cash in the year 2020. The reason for giving the huge
amount of Rs 10,00,000/- is also not mentioned by the applicant.
9. The learned Trial Court has appreciated all the evidence produced
by both the parties and has concluded that the applicant has not proved
how the amount was paid to the accused. Moreover the learned Trial
Court has relied upon the law laid down by the Apex Court in the case of
Rangappa (supra) and Basalingappa (supra) and in light of the same, has
concluded that from evidence on record accused had raised a serious
doubt about the recoverable debt and the accused had successfully
rebutted the statutory presumption. The applicant has failed to produce
reliable and cogent evidence on record about the legally recoverable debt
from the accused and has not proved his case beyond reasonable doubt
and the learned Trial Court has passed the impugned judgment and order
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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 fails and
is hereby dismissed.
11. Notice stands discharged. 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)
VVM
