Gujarat High Court
Arvindkumar Jayantibhai Dabhi vs Ankitbhai Hamirbhai Rathod on 20 February, 2025
NEUTRAL CITATION
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 Page 1 of 13 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:49:56 IST 2025 NEUTRAL CITATION R/CR.MA/16377/2024 ORDER DATED: 20/02/2025 undefined 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 Page 2 of 13 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:49:56 IST 2025 NEUTRAL CITATION R/CR.MA/16377/2024 ORDER DATED: 20/02/2025 undefined 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 Page 3 of 13 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:49:56 IST 2025 NEUTRAL CITATION R/CR.MA/16377/2024 ORDER DATED: 20/02/2025 undefined 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 Page 4 of 13 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:49:56 IST 2025 NEUTRAL CITATION R/CR.MA/16377/2024 ORDER DATED: 20/02/2025 undefined 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 Page 5 of 13 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:49:56 IST 2025 NEUTRAL CITATION R/CR.MA/16377/2024 ORDER DATED: 20/02/2025 undefined 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 Page 6 of 13 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:49:56 IST 2025 NEUTRAL CITATION R/CR.MA/16377/2024 ORDER DATED: 20/02/2025 undefined 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.Page 7 of 13 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:49:56 IST 2025
NEUTRAL CITATION R/CR.MA/16377/2024 ORDER DATED: 20/02/2025 undefined
(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. Page 8 of 13 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:49:56 IST 2025
NEUTRAL CITATION R/CR.MA/16377/2024 ORDER DATED: 20/02/2025 undefined 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 Page 9 of 13 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:49:56 IST 2025 NEUTRAL CITATION R/CR.MA/16377/2024 ORDER DATED: 20/02/2025 undefined 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 Page 10 of 13 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:49:56 IST 2025 NEUTRAL CITATION R/CR.MA/16377/2024 ORDER DATED: 20/02/2025 undefined 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 Page 11 of 13 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:49:56 IST 2025 NEUTRAL CITATION R/CR.MA/16377/2024 ORDER DATED: 20/02/2025 undefined 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 Page 12 of 13 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:49:56 IST 2025 NEUTRAL CITATION R/CR.MA/16377/2024 ORDER DATED: 20/02/2025 undefined 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 Page 13 of 13 Uploaded by VASIM SHABBIR SAIYED(HC01902) on Thu Feb 20 2025 Downloaded on : Thu Feb 20 22:49:56 IST 2025