Gujarat High Court
Atulbhai Sartanbhai Desai vs State Of Gujarat on 31 January, 2025
NEUTRAL CITATION
R/CR.MA/16135/2024 ORDER DATED: 31/01/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC. APPLICATION (FOR LEAVE TO APPEAL) NO. 16135
of 2024
In F/CRIMINAL APPEAL NO. 30845 of 2024
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ATULBHAI SARTANBHAI DESAI
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR JAYPRAKASH UMOT(3581) for the Applicant(s) No. 1
NOTICE SERVED 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 : 31/01/2025
ORAL ORDER
1. The present application is filed by the applicant -
original complainant under Section 419(4) of the Bharatiya Nagrik
Suraksha Sanhita, 2023 (for short "BNSS") seeking leave to file an
appeal against the judgment and order dated 16.07.2024 passed by
the learned 18th Additional Chief Judicial Magistrate, Negotiable
Instruments Act Court No. 34, Ahmedabad in Criminal Case No.
101248 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 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 are as
under:
2.1 The applicant and the accused were friends and the
applicant was doing business of milk and milk product and the
accused was doing the business of catering. That the accused
wanted some amount for his business as he was having financial
crunch and the complainant gave an amount of Rs.35,00,000/- to
the accused, for which, a notarized deed was executed at
16.07.2020. The accused gave cheque No.000698 dated 20.06.2021
drawn on ICICI Bank, Maninagar, Ahmedabad Branch, which was
deposited by the complainant in the Bank of Baroda Bhairavnath,
Maninagar, Ahmedabad Branch, but, the cheque returned unpaid
with the endorsement "Account Closed" on 30.06.2021. The
applicant gave the statutory demand notice dated 16.07.2021,
which was duly served to the accused on 22.07.2021, and
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thereafter, the accused did not reply to the notice or return the
amount, and hence, the complaint was filed before the
Metropolitan Magistrate Court, Ahmedabad, which was registered
at Criminal Case No.101248 of 2021.
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 on oath and 08 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 stated that the facts in chief examination and in the
complaint are false. The disputed cheque was not for any
transaction and the said cheque is one of the two cheques which
were already with the complainant. The agreement has been
forcefully executed and no amount has been given by applicant as
mentioned in the agreement. The financial capacity of the
applicant is annually approximately Rs.5,00,000/- and the said
complaint is of Rupees Thirty-Five lacs. The said cheque has been
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misused and a false complaint has been filed. The complainant
had got the cheque book by threatening the accused of social
disgrace and has misused the cheque of the accused. After the
arguments of the advocates for both the parties were heard, 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. Jayprakash Umot
appearing for the applicant and learned APP Mr. Bhargav Pandya
for the respondent - State. Though served, the respondent No.2
has neither appeared in person nor has engaged any advocate to
represent himself in the matter.
5. Learned advocate Mr. Jayprakash Umot for the
applicant submits that the learned Trial Court has erred in holding
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that the complainant has not specifically stated the nature of
transaction and the source of his funds and has not presumed that
the cheque was discharged by the accused for his liability. The
initial burden has been discharged by the complainant and the
signature and the issuance of the cheque is not disputed, and
hence, the accused has to prove the contrary that the cheque was
not issued for any debt or liability. The learned Trial Court has
completely overlooked the document produced at Exh.13 which is
the Notarized Personal Loan Agreement dated 16.07.2020,
wherein, the cheque in question has been mentioned and it is
admitted that the loan has been taken by the accused. That even
after service of the notice, the accused has not given any reply, and
hence, the learned Trial Court ought to have convicted the accused
but, the learned Trial Court has passed the impugned judgment
and order of acquittal, which is contrary to law and evidence on
record 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, in Para - 14, 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
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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
the position being proved to the contrary. In other
words, it is open to the accused to establish that there
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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:
1 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.
2 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.
3 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
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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.
4 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.
5 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."
8. In light of the above settled principles of law in the
case and considering the arguments advanced by the learned
advocates for the parties and on perusal of the record of the case,
the complainant has stated that he had given the amount of
Rs.35,00,000/- as loan to the accused, and during the cross-
examination, has admitted that he has not produced any evidence
regarding the amount given to the accused. No documentary
evidence regarding his business transaction with the accused has
been produced, and in the notice, it is mentioned that the amount
was paid in parts but in the complaint, examination-in-chief or in
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the notice, the applicant has not mentioned what amount was
given and when. The applicant has also admitted that he does not
remember in how many parts the amount was given and as stated
the first amount was paid in February, 2019 but he does not
remember the time gap between the first and second payment. The
complainant, thereafter, had stated that the amount was paid in
parts of Rs.1,00,000/-, Rs.3,00,000/- and Rs.10,00,000/- and the last
amount was given of Rs.2,40,000/- but the same has not been
mentioned in the complaint. The applicant has also admitted that
in the Promissory Note produced at Exh.14, it is mentioned that
the amount of Rs.35,00,000/- was given today i.e. on 16.07.2020.
Moreover, the agreement executed between the parties and
produced at Exh.13 on a Non-Judicial Stamp Paper of Rs.300/- has
been purchased by one Sanjay K. Desai but the applicant has
stated that he does not know who had purchased the stamp paper
and he does not know who is Sanjay K. Desai. It is pertinent to
note that the applicant has not examined Sanjay K. Desai or the
Notary and during the financial year 2020-21, as per the Income
Tax Return of the applicant produced at Exh.16, income of the
applicant is Rs.4,99,884/-. The applicant cannot say how he had
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advanced the amount of Rs.17,50,000/- shown at Exh.16 and the
transaction of the accused has not been shown in his Income Tax
Return. It was the defense of the accused that the applicant had
certain videos of the accused and he was blackmailing him and on
that basis, got the documents at Exhs.13 and 14 executed.
Moreover the learned Trial Court has considered all the
documents produced by the applicant and has also considered that
the applicant has failed to prove beyond reasonable doubt that the
cheque in question was given as repayment of a legal debt.
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.17,50,000/- to the accused. As
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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, but his probable defence can be drawn out from the
materials of the complainant.
10. The learned Trial Court has relied upon the law laid
down by the Apex Court in the case of C.C.Alavi Haji Vs
Palapetty Muhammed & Anr. passed in Criminal Appeal No.
767/2007 and in light of the same, has concluded that the applicant
has not proved his financial capacity to lend such a huge amount
of Rs.35,00,000/- and the transaction, legally recoverable debt and
facts of notice have not been proved beyond reasonable doubt. The
learned Trial Court has concluded that the accused has
successfully rebutted the presumption based on preponderance of
probability and, as per the judgment of the Apex Court in
Basalingappa (supra) the complainant has to prove his financial
capacity, failing which the presumption under section 139 of the
N.I.Act deems rebutted and 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
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proper and does not require any interference of this Court.
11. Consequently, the present application seeking leave to
present an appeal under Section 419(4) of the Bhartiya Nagrik
Suraksha Sanhita 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)
F.S.KAZI
