Gujarat High Court
Bharatbhai Dayaljibhai Patel vs Hiteshbhai Mohanbhai Parmar on 31 January, 2025
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R/CR.MA/2619/2021 ORDER DATED: 31/01/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC. APPLICATION NO. 2619 of 2021
(FOR LEAVE TO APPEAL)
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BHARATBHAI DAYALJIBHAI PATEL
Versus
HITESHBHAI MOHANBHAI PARMAR & ANR.
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Appearance:
MR RJ GOSWAMI(1102) for the Applicant(s) No. 1
N P ZAVERI(7969) 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 : 31/01/2025
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 02.03.2020 passed by
the Judicial Magistrate First Class, Mandal in Criminal Case No.
745 of 2017, whereby the original accused - respondent No. 1
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 Act").
1.1 The respondent No 1 is hereinafter referred to as "the
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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 are as
under:
2.1 The applicant and the accused were friends and the
accused was a partner of Jay Auto Showroom of TVS Bikes and
applicant was wanted to purchase TVS motorcycles for his
showroom and had demanded the amount of Rs.27,50,000/-,
which was given in cash by the applicant at Jay Auto, Hansalpur.
The accused gave cheque No.007542 from his account
No.915020003155232 with Axis Bank, Viramgam Branch of
Rs.27,50,000/- and the cheque was deposited in the account of the
applicant which returned unpaid with the endorsement "funds
insufficient". The accused repaid an amount of Rs.5,10,000/- and
gave cheque No.007549 of his account with Axis Bank dated
21.12.2016 for Rs.22,40,000/- which was deposited by the applicant
in his bank in January, 2017 but the cheque returned with
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endorsement "signature default". That on demand, the accused
repaid an amount of Rs.1,70,000/- but the remaining amount of
Rs.20,70,000/- was not paid, and once again, the accused gave
cheque No.007543 dated 27.06.2017 from his account
No.915020003155232 with Axis Bank, Viramgam Branch and the
cheque was deposited on 28.06.2017, which returned unpaid with
endorsement "funds insufficient". The applicant gave the statutory
demand notice on 24.07.2017 by R.P.A.D., which was duly served
to the accused but the accused did not pay the amount or send any
reply and hence the applicant filed the complaint before the Court
of the learned Chief Judicial Magistrate, First Class, Mandal, which
was registered as Criminal Case No.745 of 2017.
2.2 The accused was served with the summons and
appeared before the learned Trial Court and his plea was recorded
at Exhibit-07 and the evidence of the applicant was taken on
record. The applicant was examined on oath and 15 documentary
evidences were produced in support of his case after the closing
pursis of the applicant was filed, the further statement of the
accused under Section 313 of the Code of Criminal Procedure was
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recorded wherein the accused denied all the evidence and stepped
into the witness box and examined two witnesses in support of his
case. The accused filed the closing pursis at Exh.46 and after 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 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.S.D.Panchal for
Mr.R.J.Goswami appearing for the applicant and learned APP Mr.
Bhargav Pandya for the respondent - State. Learned advocate
Mr.N.P.Zaveri for respondent No.1 was not present.
5. Learned advocate Mr.S.D.Panchal for learned advocate
Mr.R.J.Goswami for the applicant submits that the applicant had
loaned an amount of Rs.27,50,000/- and the same has not been
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repaid and the applicant has produced the necessary documents
but the learned Trial Court has not presumed the drawing of the
cheque in question that the cheque was issued by the accused
towards the loan amount to him. The signature on the cheque has
not been disputed by the by the accused and adverse inference
against the complainant is drawn by the learned Trial Court to
conclude that no such amount is given by the complainant. It is
not required for the applicant to prove that the money was loaned
to the accused but the learned Trial Court has not considered the
same and has not appreciated the presumption under Section 139
of the N.I.Act. The cheque has not been sent to the FSL to prove
that the blanks on the cheque was filled by the applicant and when
the accused has not disputed his signature on the cheque, the
learned Trial Court ought to have convicted the accused and the
impugned judgment and order of acquittal is bad in-law and
hence, the present leave to appeal must be allowed.
6. Learned APP Mr. Bhargav Pandya for the respondent -
State has submitted that the learned Trial Court has appreciated all
the evidence in true perspective and has not committed any error
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in acquitting the accused. Therefore, no interference of this Court
is required in the impugned judgment and the order of acquittal
passed by the learned Trial Court and has urged this Court to
reject the present application.
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. The Apex Court has
observed in 14, as under which are 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
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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 Tedhi Singh vs Narayan Dass
Mahant reported in 2022 6 SCC 735 has observed as under in Para
7 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
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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 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.
"
7.2 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.
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(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.
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."
7.3 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
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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 , as per the case
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of the applicant, initially an amount of Rs.27,50,000/- was given
and thereafter, some amount was paid by the accused and the
amount of Rs.20,70,000/- was outstanding but the cheque in
question has been deposited for Rs.27,50,000/-. Moreover, it is the
say of the applicant that the accused wanted the amount to stock
up the TVS motorcycles as the festival of 'Dashera" was
approaching. At the relevant time, demonitization was in existence
and the fact that the applicant had given a huge amount of
Rs.27,50,000/- in cash has been challenged by the accused.
Moreover, the applicant has not produced any documentary
evidence regarding his income and has stated that he has an
annual income of Rs.2,40,000/- The applicant has not proved the
source of income and the cheque in question was of over-payment.
The complainant has himself stated in the complaint that some
amount was paid by the accused and the learned Trial Court has
also considered that the evidence has been rebutted by the accused
by examining witness Vishnubhai Mepabhai Gamara at Exh.37
and witness Dineshbhai Bhimabhai Bharwad at Exh.38 who have
stated that the applicant had gone to purchase "Jupiter" and
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hence, were known to them. Moreover, in the notice, the applicant
had demanded the amount of Rs.20,70,000/- from the complainant
but the cheque is of Rs.27,50,000/- and the difference has not been
explained by the applicant.
9. In light of the judgment of Rangappa (Supra) the
accused is not expected to discharge an unduly high standard of
proof and the accused has to rebut the presumption under Section
139 of the N.I.Act and the standard for doing so is that of
"preponderance of probabilities". In the instant case, the accused
has successfully rebutted the presumption and has raised a
probable defence and during the cross-examination of the
complainant has questioned his financial capacity and has also
brought on record that the complainant did not have the sufficient
income to extend a loan of Rs.27,50,000/- to the accused. As
settled by the Apex Court in Basalingappa (Supra) it is not
necessary for the accused to step into the witness box to raise his
defence, and his probable defence can be drawn out from the
materials of the complainant, but in the instant case the accused
has stepped into the witness box and has examined two witnesses
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to prove his defence. Moreover it is on record that the accused had
repaid some amount to the applicant, and there is a difference in
the amount mentioned in the notice and the amount on the
cheque.
10. The learned Trial Court has considered all the
documents produced by the applicant and has also considered that
the applicant had not produced any document to prove his source
of income or the Income Tax Return and when such a huge
amount was not given by cheque and no writing has been
executed for the same, the presumption under Section 139 of the
Act was not satisfied as the accused had succeeded in rebutting the
presumption of Section 139 of the Act. The applicant has failed to
prove beyond reasonable doubt that the cheque in question was
given for a legally recoverable debt in the name of the applicant
and as the essential requirements of Section 138 of the Act were
not satisfied the accused cannot be convicted. 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.
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11. 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.
12. Notice stands discharged. Record and proceedings if
any, be sent back to the 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)
F.S.KAZI.....
