Gujarat High Court
Jubilee Hotels Pvt.Ltd,Thro'Director ... vs State Of Gujarat on 28 June, 2022
Author: Ashokkumar C. Joshi
Bench: Ashokkumar C. Joshi
R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL APPEAL NO. 1587 of 2009
With
R/CRIMINAL APPEAL NO. 1588 of 2009
With
R/CRIMINAL APPEAL NO. 1589 of 2009
With
R/CRIMINAL APPEAL NO. 1590 of 2009
With
R/CRIMINAL APPEAL NO. 1591 of 2009
With
R/CRIMINAL APPEAL NO. 1592 of 2009
With
R/CRIMINAL APPEAL NO. 1593 of 2009
FOR APPROVAL AND SIGNATURE:
HONOURABLE DR. JUSTICE ASHOKKUMAR C. JOSHI
=======================================
Whether Reporters of Local Papers may be
1 NO
allowed to see the judgment ?
2 To be referred to the Reporter or not ? YES
Whether their Lordships wish to see the fair copy
3 NO
of the judgment ?
Whether this case involves a substantial question
4 of law as to the interpretation of the Constitution NO
of India or any order made thereunder ?
=======================================
JUBILEE HOTELS PVT.LTD,THRO'DIRECTOR PANKAJ DHIRAJLAL
VARIA
Versus
STATE OF GUJARAT & 1 other(s)
=======================================
Appearance:
MR MONARCH PANDYA for MR HRIDAY BUCH(2372) for the
Appellant(s) No. 1
MR VA MANSURI for MR MTM HAKIM(1190) for the
Opponent(s)/Respondent(s) No. 2
MS JIRGA JHAVERI, APP for the Opponent(s)/Respondent(s) No. 1
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R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022
CORAM:HONOURABLE DR. JUSTICE ASHOKKUMAR C. JOSHI
Date : 28/06/2022
COMMON ORAL JUDGMENT
1. Since all these appeals arise from the same facts and are between the same parties, the appeals were heard together and are being decided by way of this common judgment.
2. The captioned appeals have been filed by the appellant - original complainant under Sections 378(4) of the Code of Criminal Procedure, 1973 challenging the judgments and orders dated 31.03.2008, passed in Criminal Case Nos. 2713, 2714, 2716, 2715, 2277, 2732 and 2733 of 2004 by the learned 9 th Additional Senior Civil Judge and Judicial Magistrate First Class, Bhavnagar, recording the acquittal.
3. Nutshell facts are that appellant - original complainant - lodged complaints before the Court that the complainant was engaged in the hotel business. That, on coming into contact with the respondent No. 2, who was in requirement of a place for hospital activity and on approach being made to the complainant, the complainant, gave its place (hotel) on rent for conducting such activity to the respondent No. 2 for a period of 10 months for which, different cheques had been issued, which on being deposited in the bank, returned with an endorsement "Account Closed" and hence, the complainant issued legal notices to the respondent No. 2 through advocate by RPAD, which though served upon the respondent No. 2, the respondent No. 2 did not pay the amount and also not replied to the said notice, the complainant was constrained to file complaints before the competent Court at Bhavnagar under Section 138 of the Page 2 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 Negotiable Instruments Act, 1881 (herein after referred to as "the NI Act"). The details of cheques, amount and case number etc. are as follow:
Sr. Cr. A. C. C. Cheque Amt. Cheque Cheque Dishonour No. No. No. Issuance deposited ed on date date
1. 1587/ 2713/ 2656312 6,00,000/- 28.08.2003 09.02.2004 12.02.2004 2009 2004
2. 1588/ 2714/ 2656311 2,00,000/- 22.08.2003 09.02.2004 12.02.2004 2009 2004
3. 1589/ 2716/ 2656302 1,00,000/- 04.08.2003 03.02.2004 06.02.2004 2009 2004
4. 1590/ 2715/ 2656304 1,00,000/- 12.08.2003 09.02.2004 12.02.2004 2009 2004
5. 1591/ 2277/ 2656303 50,000/- 08.08.2003 07.02.2004 10.02.2004 2009 2004
6. 1592/ 2732/ 2657514 2,00,000/- 11.11.2003 09.02.2004 12.02.2004 2009 2004
7. 1593/ 2733/ 2657515 2,00,000/- 25.11.2003 09.02.2004 12.02.2004 2009 2004 3.1 Upon such complaints being filed and subsequent to service of summons, the respondent No. 2 appeared before the Court.
Since the accused did not plead guilty, trial was proceeded against him. In support, the appellant - complainant has produced oral as well as documentary evidence. Vide impugned judgments and orders dated 31.03.2008, the learned trial Judge acquitted the accused person. Being aggrieved by the same, the appellant - original complainant has preferred the present appeals.
4. Heard, learned advocate Mr. Monarch Pandya for learned advocate Mr. Hriday Buch for the appellant - original complainant, learned advocate Mr. V. A. Mansuri for learned advocate Mr. MTM Hakim for the respondent No. 2 and learned APP Ms. Jirga Jhaveri for the respondent No. 1 - State.
Page 3 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 4.1 The learned advocate for the appellant - original complainant has mainly contended that the learned trial Judge ought to have convicted the accused inasmuch as the cheques in question were duly signed by the respondent No. 2 and came to be dishonoured when presented before the bank with an endorsement "Account Closed". Furthermore, in his submission, the learned trial Judge ought to have appreciated the fact that the cheques were issued for discharge of legal liability towards complainant. Further, the signature on the cheques were also not in dispute. In his submission, the learned trial Judge ought to have held, in view of the evidence on record, that the accused had failed to rebut the onus of proof and statutory presumption against him.
4.2 The learned advocate for the appellant further submitted that three conditions to constitute an offence under Section 138 of the NI Act viz. i) cheque ought to have been presented in the bank within six months or within its validity, ii) holder in due course ought to have make demand by giving notice in writing within 30 days on receiving information as to return of cheque and iii) drawer of the cheque should have failed to make payment within 15 days of receipt of such notice, are satisfied and fulfilled by the appellant, however, the learned trial Judge has failed to consider this aspect of the matter in true and proper perspective.
4.3 The learned advocate for the appellant - complainant submitted that the respondent No. 2, in his further statement, had indirectly admitted the transaction between the parties and the amount due, however, the learned trial Judge has erred in appreciating the said aspect.
4.4 The learned advocate for the appellant - complainant Page 4 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 further submitted that the learned trial Judge has erred in coming to conclusion that the appellant has failed to prove that the cheques in question were given in discharge of the legal debt. It is submitted that legal notice was given to the respondent No. 2 and evidence, in support of its case was also led, however, the learned trial Judge disbelieved the same and accordingly, has erred materially.
4.5 The learned advocate for the appellant - complainant strenuously submitted that the learned trial Judge has committed a grave error in coming to the conclusion that the appellant is not authorized to file the complaints. He submitted that such a defence, even, was not raised by the respondent No. 2, nor the respondent No. 2 had challenged the authority of the witness of the appellant to file the complaint. He submitted that in the company's Board meeting of the Board of Directors, held on 12.02.2004, a resolution was passed authorizing Shri Pankaj Dhirajlal Varia to do anything and everything on behalf of the company for recovering the outstanding amount from the respondent No. 2, however, in the absence of any challenge in that regard, the same was not produced. He submitted that the witness of the complainant had made entire transaction with the respondent No. 2 on behalf of the appellant and under the circumstance, the conclusion arrived at by the learned trial Judge that the witness of the appellant was not authorized to file the complaint is totally illegal, erroneous and contrary to the evidence on record as well as settled legal position. It is further submitted by the learned advocate for the appellant that the appellant company is a private limited company and is a juridical person and therefore, the complaints had rightly been filed through the person looking after its day-to-day affairs.
Page 5 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 4.6 The learned advocate for the appellant - complainant further submitted that the learned trial Judge has also erred in observing that the transaction between the respondent No. 2 and complainant has not been established, which is contrary to the evidence on record. He submitted that merely because the account of the respondent No. 2, in the books of the appellant could not be produced on record, the learned trial Judge ought not to have drawn adverse inference, moresowhen, it is admitted by the respondent - accused in his further statement that he had given the cheques towards tariff to the company.
4.7 Moreover, it is submitted by the learned advocate for the appellant that the learned trial Judge has also erred in observing that the appellant has not obtained any permission for starting hospital as the appellant was not required to do so and in fact, the respondent No. 2 did not take proper permission as a Medical practitioner.
4.8 The learned advocate, taking this Court through the oral as well as the documentary evidence on record, submitted that though the case against the accused was proved beyond reasonable doubt, the learned trial Judge has not properly appreciated the evidence on record and thereby, has committed an error in recording acquittal and therefore, the impugned judgment and order suffers from material illegality, perversity and contrary to the facts and evidence on record. Accordingly, he urged that present appeals may be allowed by quashing and setting aside the impugned judgments and orders of acquittal.
4.9 In support, the learned advocate for the appellant - complainant has relied upon following decisions:
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i) Sarathi Leasing Finance Ltd. v. Sri B. Narayana Shetty, 2006 SCC Online Kar 124;
ii) Geekay Exim (India) Ltd. and Others v. State of Gujarat and Others, MANU/GJ/0023/1997.
5. Per contra, learned advocate Mr. V. A. Mansuri for the respondent No. 2 - accused, while supporting the impugned judgments and orders of the trial Court, submitted that the learned trial Judge has, after due and proper appreciation and evaluation of the evidence on record, has come to such a conclusion and has acquitted the accused, which is just and proper. He submitted that it is trite law that if two views are possible on the basis of the evidence on record, the appellate Court should not disturb the finding of acquittal recorded by the trial Court. Further, while exercising the powers in appeal against the order of acquittal, the Court of appeal would not ordinarily interfere with the order of acquittal unless the approach of the lower Court is vitiated by some manifest illegality.
5.1 The learned advocate for the respondent No. 2 - accused submitted that for invoking the provisions of Section 138 of the NI Act, the debt or other liability means a legally enforceable debt or other liability, which the complainant has failed to prove and accordingly, when the appellant has failed to discharge the initial burden cast upon it to prove the legally enforceable debt, the learned trial Judge has rightly concluded in favour of the respondent - accused.
5.2 Referring to para 29 of the impugned judgment and order, it is submitted by the learned advocate for the respondent No. 2 that considering the decisions referred to in the said paragraph, it is observed by the learned trial Judge that, "on one hand, the complainant has made signature in the complaint in the capacity Page 7 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 of Director of the company, whereas, pleadings in paragraph 1 suggest the same to be in personal capacity. In cross- examination paragraph 17, the complainant has denied the fact of having entered into any written agreement with the respondent. But, in cross-examination paragraph 19, it is stated that Jubilee Hotel has not made any agreement with the respondent No. 2 in personal capacity but he has made personal agreement with the respondent No. 2". The learned trial Judge has further observed that, "there is nothing on record to show that the company has given any authority to the complainant, being Director, to lodge the complaint". Thus, in the absence of any legal authorization to act on behalf the company, the learned trial Judge has rightly observed that the complainant ought to have filed the complaint getting due authorization for the same.
5.3 The learned advocate for the respondent No. 2 has heavily submitted that the ingredients of the offence alleged against the accused are not proved beyond reasonable doubt and therefore, the learned trial Judge has rightly acquitted the accused of the charges levelled against him. Accordingly, it is requested that no interference is required at the hands of this Court and eventually, it is urged that the present appeal may be dismissed.
6. The Court has also heard the learned APP for the respondent No. 1 - State.
7. The Court has considered the rival submissions made by the learned advocates for the respective parties and also gone through the impugned judgment and order of the trial Court as well as the material on record.
7.1 Before adverting to the facts of the case, it would be Page 8 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 worthwhile to refer to the scope of interference in acquittal appeals. It is well settled by catena of decisions that an appellate Court has full power to review, re-appreciate and consider the evidence upon which the order of acquittal is founded. However, the Appellate Court must bear in mind that in case of acquittal, there is prejudice in favour of the accused, firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reaffirmed and strengthened by the trial Court.
7.2 Further, if two reasonable conclusions are possible on the basis of the evidence on record, the appellate Court should not disturb the finding of acquittal recorded by the trial Court. Further, while exercising the powers in appeal against the order of acquittal, the Court of appeal would not ordinarily interfere with the order of acquittal unless the approach of the lower Court is vitiated by some manifest illegality and the conclusion arrive at would not be arrived at by any reasonable person, and therefore, the decision is to be characterized as perverse.
7.3 Merely because two views are possible, the Court of appeal would not take the view which would upset the judgment delivered by the Court below. However, the appellate Court has a power to review the evidence if it is of the view that the conclusion arrived at by the Court below is perverse and the court has committed a manifest error of law and ignored the material evidence on record. That the duty is cast upon the appellate Court, in such circumstances, to re-appreciate the evidence to arrive to just decision on the basis of material placed Page 9 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 on record to find out whether the accused is connected with the commission of the crime with which he is charged.
7.4 In Mallikarjun Kodagali (Dead) represented through Legal Representatives v. State of Karnataka and Others, (2019) 2 SCC 752, the Apex Court has observed that, "The presumption of innocence which is attached to every accused gets fortified and strengthened when the said accused is acquitted by the trial Court. Probably, for this reason, the law makers felt that when the appeal is to be filed in the High Court it should not be filed as a matter of course or as matter of right but leave of the High Court must be obtained before the appeal is entertained. This would not only prevent the High Court from being flooded with appeals but more importantly would ensure that innocent persons who have already faced the tribulation of a long drawn out criminal trial are not again unnecessarily dragged to the High Court".
7.5 Yet in another decision in Chaman Lal v. The State of Himachal Pradesh, rendered in Criminal Appeal No. 1229 of 2017 on 03.12.2020, 2020 SCC OnLine SC 988 the Apex Court has observed as under:
"9.1 In the case of Babu v. State of Kerala, (2010) 9 SCC 189), this Court had reiterated the principles to be followed in an appeal against acquittal under Section 378 Cr.P.C. In paragraphs 12 to 19, it is observed and held as under:
12. This Court time and again has laid down the guidelines for the High Court to interfere with the judgment and order of acquittal passed by the trial court. The appellate court should not ordinarily set aside a judgment of acquittal in a case where two views are possible, though the view of the appellate court may be the more probable one. While dealing with a judgment of acquittal, the appellate court has to consider the entire evidence on Page 10 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 record, so as to arrive at a finding as to whether the views of the trial court were perverse or otherwise unsustainable.
The appellate court is entitled to consider whether in arriving at a finding of fact, the trial court had failed to take into consideration admissible evidence and/or had taken into consideration the evidence brought on record contrary to law. Similarly, wrong placing of burden of proof may also be a subject-matter of scrutiny by the appellate court. (Vide Balak Ram v. State of U.P (1975) 3 SCC 219, Shambhoo Missir v. State of Bihar (1990) 4 SCC 17, Shailendra Pratap v. State of U.P (2003) 1 SCC 761, Narendra Singh v. State of M.P (2004) 10 SCC 699, Budh Singh v. State of U.P (2006) 9 SCC 731, State of U.P. v. Ram Veer Singh (2007) 13 SCC 102, S. Rama Krishna v. S. Rami Reddy (2008) 5 SCC 535, Arulvelu v. State (2009) 10 SCC 206, Perla Somasekhara Reddy v. State of A.P (2009) 16 SCC 98 and Ram Singh v. State of H.P (2010) 2 SCC 445)
13. In Sheo Swarup v. King Emperor AIR 1934 PC 227, the Privy Council observed as under: (IA p. 404) "... the High Court should and will always give proper weight and consideration to such matters as (1) the views of the trial Judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any doubt; and (4) the slowness of an appellate court in disturbing a finding of fact arrived at by a Judge who had the advantage of seeing the witnesses."
14. The aforesaid principle of law has consistently been followed by this Court. (See Tulsiram Kanu v. State AIR 1954 SC 1, Balbir Singh v. State of Punjab AIR 1957 SC 216, M.G. Agarwal v. State of Maharashtra AIR 1963 SC 200, Khedu Mohton v. State of Bihar (1970) 2 SCC 450, Sambasivan v. State of Kerala (1998) 5 SCC 412, Bhagwan Singh v. State of M.P(2002) 4 SCC 85 and State of Goa v. Sanjay Thakran (2007) 3 SCC 755)
15. In Chandrappa v. State of Karnataka (2007) 4 SCC 415, this Court reiterated the legal position as under: (SCC p. 432, para 42) "(1) An appellate court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded.
Page 11 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 (2) The Code of Criminal Procedure, 1973 puts no limitation, restriction or condition on exercise of such power and an appellate court on the evidence before it may reach its own conclusion, both on questions of fact and of law.
(3) Various expressions, such as, 'substantial and compelling reasons', 'good and sufficient grounds', 'very strong circumstances', 'distorted conclusions', 'glaring mistakes', etc. are not intended to curtail extensive powers of an appellate court in an appeal against acquittal. Such phraseologies are more in the nature of 'flourishes of language' to emphasise the reluctance of an appellate court to interfere with acquittal than to curtail the power of the court to review the evidence and to come to its own conclusion.
(4) An appellate court, however, must bear in mind that in case of acquittal, there is double presumption in favour of the accused. Firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial court.
(5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial court."
16. In Ghurey Lal v. State of U.P (2008) 10 SCC 450, this Court reiterated the said view, observing that the appellate court in dealing with the cases in which the trial courts have acquitted the accused, should bear in mind that the trial court's acquittal bolsters the presumption that he is innocent. The appellate court must give due weight and consideration to the decision of the trial court as the trial court had the distinct advantage of watching the demeanour of the witnesses, and was in a better position to evaluate the credibility of the witnesses.
17. In State of Rajasthan v. Naresh (2009) 9 SCC 368, the Court again examined the earlier judgments of this Court Page 12 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 and laid down that: (SCC p. 374, para 20) "20. ... an order of acquittal should not be lightly interfered with even if the court believes that there is some evidence pointing out the finger towards the accused."
18. In State of U.P. v. Banne (2009) 4 SCC 271, this Court gave certain illustrative circumstances in which the Court would be justified in interfering with a judgment of acquittal by the High Court. The circumstances include: (SCC p. 286, para 28) "(i) The High Court's decision is based on totally erroneous view of law by ignoring the settled legal position;
(ii) The High Court's conclusions are contrary to evidence and documents on record;
(iii) The entire approach of the High Court in dealing with the evidence was patently illegal leading to grave miscarriage of justice;
(iv) The High Court's judgment is manifestly unjust and unreasonable based on erroneous law and facts on the record of the case;
(v) This Court must always give proper weight and consideration to the findings of the High Court;
(vi) This Court would be extremely reluctant in interfering with a case when both the Sessions Court and the High Court have recorded an order of acquittal." A similar view has been reiterated by this Court in Dhanapal v. State (2009) 10 SCC 401.
19. Thus, the law on the issue can be summarised to the effect that in exceptional cases where there are compelling circumstances, and the judgment under appeal is found to be perverse, the appellate court can interfere with the order of acquittal. The appellate court should bear in mind the presumption of innocence of the accused and further that the trial court's acquittal bolsters the presumption of his innocence. Interference in a routine manner where the other view is possible should be avoided, unless there are good reasons for interference."
9.2 When the findings of fact recorded by a court can be held to be perverse has been dealt with and considered in paragraph 20 of the aforesaid decision, which reads as under:
Page 13 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 "20. The findings of fact recorded by a court can be held to be perverse if the findings have been arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant/inadmissible material. The finding may also be said to be perverse if it is "against the weight of evidence", or if the finding so outrageously defies logic as to suffer from the vice of irrationality. (Vide Rajinder Kumar Kindra v. Delhi Admn (1984) 4 SCC 635, Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath & Sons 1992 Supp (2) SCC 312, Triveni Rubber & Plastics v.
CCE 1994 Supp. (3) SCC 665, Gaya Din v. Hanuman Prasad (2001) 1 SCC 501, Aruvelu v. State (2009) 10 SCC 206 and Gamini Bala Koteswara Rao v. State of A.P (2009) 10 SCC
636)." (emphasis supplied) 9.3 It is further observed, after following the decision of this Court in the case of Kuldeep Singh v. Commissioner of Police (1999) 2 SCC 10, that if a decision is arrived at on the basis of no evidence or thoroughly unreliable evidence and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, the conclusions would not be treated as perverse and the findings would not be interfered with.
9.4 In the recent decision of Vijay Mohan Singh v. State of Karnataka, (2019) 5 SCC 436, this Court again had an occasion to consider the scope of Section 378 Cr.P.C. and the interference by the High Court in an appeal against acquittal. This Court considered catena of decisions of this Court right from 1952 onwards. In paragraph 31, it is observed and held as under:
"31. An identical question came to be considered before this Court in Umedbhai Jadavbhai (1978) 1 SCC 228. In the case before this Court, the High Court interfered with the order of acquittal passed by the learned trial court on re- appreciation of the entire evidence on record. However, the High Court, while reversing the acquittal, did not consider the reasons given by the learned trial court while acquitting the accused. Confirming the judgment of the High Court, this Court observed and held in para 10 as under: (SCC p.
233)
"10. Once the appeal was rightly entertained against the order of acquittal, the High Court was entitled to reappreciate the entire evidence independently and come to its own conclusion. Ordinarily, the High Court would give due importance to the opinion of the Page 14 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 Sessions Judge if the same were arrived at after proper appreciation of the evidence. This rule will not be applicable in the present case where the Sessions Judge has made an absolutely wrong assumption of a very material and clinching aspect in the peculiar circumstances of the case."
31.1. In Sambasivan v. State of Kerala (1998) 5 SCC 412, the High Court reversed the order of acquittal passed by the learned trial court and held the accused guilty on re- appreciation of the entire evidence on record, however, the High Court did not record its conclusion on the question whether the approach of the trial court in dealing with the evidence was patently illegal or the conclusions arrived at by it were wholly untenable. Confirming the order passed by the High Court convicting the accused on reversal of the acquittal passed by the learned trial court, after being satisfied that the order of acquittal passed by the learned trial court was perverse and suffered from infirmities, this Court declined to interfere with the order of conviction passed by the High Court.
While confirming the order of conviction passed by the High Court, this Court observed in para 8 as under: (SCC p. 416) "8. We have perused the judgment under appeal to ascertain whether the High Court has conformed to the aforementioned principles. We find that the High Court has not strictly proceeded in the manner laid down by this Court in Ramesh Babulal Doshi v. State of Gujarat (1996) 9 SCC 225 viz. first recording its conclusion on the question whether the approach of the trial court in dealing with the evidence was patently illegal or the conclusions arrived at by it were wholly untenable, which alone will justify interference in an order of acquittal though the High Court has rendered a well-considered judgment duly meeting all the contentions raised before it. But then will this non-compliance per se justify setting aside the judgment under appeal? We think, not. In our view, in such a case, the approach of the court which is considering the validity of the judgment of an appellate court which has reversed the order of acquittal passed by the trial court, should be to satisfy itself if the approach of the trial court in dealing with the evidence was patently illegal or conclusions arrived at by it are demonstrably Page 15 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 unsustainable and whether the judgment of the appellate court is free from those infirmities; if so to hold that the trial court judgment warranted interference. In such a case, there is obviously no reason why the appellate court's judgment should be disturbed. But if on the other hand the court comes to the conclusion that the judgment of the trial court does not suffer from any infirmity, it cannot but be held that the interference by the appellate court in the order of acquittal was not justified; then in such a case the judgment of the appellate court has to be set aside as of the two reasonable views, the one in support of the acquittal alone has to stand. Having regard to the above discussion, we shall proceed to examine the judgment of the trial court in this case."
31.2. In K. Ramakrishnan Unnithan v. State of Kerala (1999) 3 SCC 309, after observing that though there is some substance in the grievance of the learned counsel appearing on behalf of the accused that the High Court has not adverted to all the reasons given by the trial Judge for according an order of acquittal, this Court refused to set aside the order of conviction passed by the High Court after having found that the approach of the Sessions Judge in recording the order of acquittal was not proper and the conclusion arrived at by the learned Sessions Judge on several aspects was unsustainable. This Court further observed that as the Sessions Judge was not justified in discarding the relevant/material evidence while acquitting the accused, the High Court, therefore, was fully entitled to reappreciate the evidence and record its own conclusion. This Court scrutinised the evidence of the eyewitnesses and opined that reasons adduced by the trial court for discarding the testimony of the eyewitnesses were not at all sound. This Court also observed that as the evaluation of the evidence made by the trial court was manifestly erroneous and therefore it was the duty of the High Court to interfere with an order of acquittal passed by the learned Sessions Judge.
31.3. In Atley v. State of U.P. AIR 1955 SC 807, in para 5, this Court observed and held as under: (AIR pp. 80910) "5. It has been argued by the learned counsel for the appellant that the judgment of the trial court being one of acquittal, the High Court should not have set it aside on mere appreciation of the evidence led on behalf of the prosecution unless it came to the conclusion that the Page 16 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 judgment of the trial Judge was perverse. In our opinion, it is not correct to say that unless the appellate court in an appeal under Section 417 Cr.P.C came to the conclusion that the judgment of acquittal under appeal was perverse it could not set aside that order.
It has been laid down by this Court that it is open to the High Court on an appeal against an order of acquittal to review the entire evidence and to come to its own conclusion, of course, keeping in view the well-established rule that the presumption of innocence of the accused is not weakened but strengthened by the judgment of acquittal passed by the trial court which had the advantage of observing the demeanour of witnesses whose evidence have been recorded in its presence.
It is also well settled that the court of appeal has as wide powers of appreciation of evidence in an appeal against an order of acquittal as in the case of an appeal against an order of conviction, subject to the riders that the presumption of innocence with which the accused person starts in the trial court continues even up to the appellate stage and that the appellate court should attach due weight to the opinion of the trial court which recorded the order of acquittal.
If the appellate court reviews the evidence, keeping those principles in mind, and comes to a contrary conclusion, the judgment cannot be said to have been vitiated. (See in this connection the very cases cited at the Bar, namely, Surajpal Singh v. State AIR 1952 SC 52; Wilayat Khan v. State of U.P AIR 1953 SC 122) In our opinion, there is no substance in the contention raised on behalf of the appellant that the High Court was not justified in reviewing the entire evidence and coming to its own conclusions.
31.4. In K. Gopal Reddy v. State of A.P. (1979) 1 SCC 355, this Court has observed that where the trial court allows itself to be beset with fanciful doubts, rejects creditworthy evidence for slender reasons and takes a view of the evidence which is but barely possible, it is the obvious duty of the High Court to interfere in the interest of justice, lest the administration of justice be brought to ridicule."
(emphasis supplied)."
8. In the aforesaid backdrop, if Section 138 of NI Act is seen, it Page 17 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 speaks as under:
"138. Dishonour of cheque for insufficiency, etc., of funds in the account. -- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to one year.
Provided that nothing contained in this section shall apply unless--
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.-- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.] 8.1 Thus, in the case under NI Act, the cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or Page 18 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 other liability. Further, explanation to this section defines the debt and other liability to mean a legally enforceable debt or other liability. In this context, after due appreciation and evaluation of the evidence on record, the learned trial Judge has come to a conclusion that the debt in question cannot be said to be legally enforceable debt and the complainant has failed to prove otherwise. It is observed by the learned trial Judge that in the present case, the complainant has not produced any documentary evidence to prove his case and hence, it cannot be believed that the complainant had a legal dues from the respondent - accused. In the overall facts and circumstances of the case, the learned trial Judge has come to the conclusion that the debt cannot be said to be the legally enforceable debt, which is sine qua non in such matters. It is observed by the learned trial Judge that on one hand, the complaint in question is being filed on behalf of the company and Pankajbhai Dhirajlal Varia signs the same as Director of the company and on the other hand, in his deposition, more particularly, in the cross- examination, he states otherwise. It is stated by this witness (in his deposition at Exh. 39 in Criminal Case No. 2277 of 2004), more particularly in his cross-examination that, 'Jubilee Hotel has not entered into any contract/agreement with the accused but, he has personally entered into contract with the accused'. It is further stated that 'there is no written agreement for extension of the contract beyond December 2003'. Thus, as admitted by the complainant himself, it is clear that there was no privity of contract between the company and the accused. Further, it is also an admitted fact that the contract/agreement was made by Pankajbhai Dhirajlal Varia in his personal capacity and not by the company. Besides, there is nothing on record to show as to how and as to why for the so-called affairs of the company, Pankajbhai Dhirajlal Varia acted in personal capacity. If at all it is believed Page 19 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 that the cheques were issued by accused to the company, in that case also, there is not an iota of evidence to show that the cheques were issued for the debt in question inasmuch as no details of transaction, books of accounts or any other document is produced on record to show the privity of contract between the parties.
8.2 Under Sections 118(a) and 139 of the NI Act, there are provisions as regards presumption. At this juncture, a beneficial reference may be made to a decision of the Apex Court in Basalingappa v. Mudibasappa, MANU/SC/0502/2019 :
(2019) 5 SCC 418, wherein, the Court has observed as under:
"23. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
23.1. 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.
23.2. 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.
23.3. To rebut the presumption, it is open for the Accused to rely on evidence led by him or the 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.
23.4. 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 Page 20 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 persuasive burden.
23.5. It is not necessary for the Accused to come in the witness box to support his defence."
8.2.1 Thus, 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.
8.3 Further, in the decision in Krishna Janardhan Bhat v. Dattaraya G. Hegde, passed in Appeal (Cri.) 518 of 2006 on 11.01.2008, wherein the Apex Court has observed thus:
"The proviso appended to the said section provides for compliance of legal requirements before a complaint petition can be acted upon by a court of law. Section 139 of the Act merely raises a presumption in regard to the second aspect of the matter. Existence of legally recoverable debt is not matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability".
8.3.1 Thus, the presumption under Section 139 of the NI Act merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability and existence of legally recoverable debt is not matter of presumption under the said section.
8.4 Yet in another decision in P. Venugopal v. Madan P. Sarathi, MANU/SC/8264/2008 it is held by the Apex Court that, "Initial burden is on complainant to prove grant of loan. The presumption raised in favour of holder of cheque must be confined to matters covered thereby and does not extend to extent that cheque was issued for discharge of debt or liability Page 21 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 which is required to be proved by complainant."
8.5 Further, in the decision in Vijay v. Laxman and Ors., MANU/SC/0125/2013, it is held by the Apex Court that "Acquittal of Accused shall be sustained, if prosecution has failed to make out case against Accused."
9. In the instant case, from the cross-examination of Pankajbhai Dhirajlal Varia by the accused, it has come on record that there was no contract and/or agreement between the company and the accused but the same was in the personal capacity by Pankajbhai Dhirajlal Varia. Further, Pankajbhai Dhirajlal Varia has not produced original contract/agreement on record. Moreover, as said earlier, the complainant has not produced any books of account and/or any details of transaction between them and thus, considering all these aspects of the matter, the learned trial Judge has come to a conclusion that the accused has succeeded in rebutting the presumption, showing preponderance of probability and that the complainant has failed to prove that the cheques were drawn towards legally enforceable debt. Thus, when the complainant has failed to fulfill the initial burden of proving the legally enforceable debt, the presumption against the respondent - accused is justifiably rebutted.
9.1 Considering the oral as well as the documentary evidence on record, following aspects have been weighed by this Court:
i) admittedly, the complaint is filed on behalf of the company by Pankajbhai Dhirajlal Varia and no authorization letter is produced on record;Page 22 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022
R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022
ii) there is nothing on record to show the privity of contract between the company and the accused;
iii) as per the deposition (cross-examination) of Pankajbhai Dhirajlal Varia, the contract/agreement was entered into by him in personal capacity;
iv) no notice/communication is there on record to show outstanding rent on the part of the accused;
v) there is nothing on record to show that the cheques had been issued for such debt/legally enforceable debt of the company and/or Pankajbhai Dhirajlal Varia;
vi) as per the case of the appellant, the accused has admitted the dues of the company in his further statement, however, Pankajbhai Dhirajlal Varia also admits in his deposition that contract/agreement was made in his personal capacity;
vii) no register and/or books of accounts and/or receipts,etc. have been produced on record so as to show that any transaction has been entered into between the parties except bare words;
vii) there is nothing on record that with a view to avoid the payment of legal dues, the account was closed by the accused;
viii) presumption in favour of the complainant is rebuttable and standard of proof is preponderance of probability, which the respondent appears to have Page 23 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 successfully shown.
9.2 Thus, on re-appreciation and reevaluation of the oral as well as the documentary evidence on record, it transpires that the complainant has failed to prove the case against the accused beyond reasonable doubt inasmuch as the ingredients of the offence alleged are not fulfilled. The Court has gone through in detail the impugned judgment and order and found that the learned trial Judge has meticulously considered evidence on record and come to such a conclusion.
10. The Court has gone through the decisions relied upon by the learned advocate for the appellant and the respondent - accused. In the decision in Geekay Exim (India) Ltd. and Others (supra), it is held that, "the question of authorization could have arisen if the complaint is filed in a person's name for and on behalf of the company". Further, in the decision in Sarathi Leasing Finance Ltd. (supra), relied upon by the appellant, it is held that, "the question of authorization to such persons to file the complaint arises only if the accused takes up a specific plea that the company did not intend to prosecute him for the offence or that there is some material before the Court to indicate that the complainant-company has no intention to prosecute the accused. The learned Sessions Judge was wholly in error in allowing the appeal and setting aside the conviction solely on the ground that the revision petitioner had not produced the proper authorization". In the instant case, if at all it is believed that the authorization is not required, then also, there are several contradictions. As noted above, on one hand, the complaint is being filed on behalf of the company with a case that debt is due to the company by the respondent - accused, whereas, in cross-examination, Pankajbhai Dhirajlal Varia, has Page 24 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022 R/CR.A/1587/2009 JUDGMENT DATED: 28/06/2022 admitted that the contract/agreement was made in his personal capacity and not by the company. Further, if at all it is believed that the company had entered into contract with the respondent
- accused, in that case also, there is nothing on record to show any details and/or books of accounts qua the transaction in question. The appellant being a private limited company, is expected to maintain books of accounts as well as details of transaction with any party. Further, it is also not proved by the appellant that the cheques were issued by the respondent - accused qua such debt, except bare words.
11. In view of the aforesaid discussion and observations, in the considered opinion of this Court, "in fleri" the complainant has failed to bring home the charge against accused for want of sufficient material. The findings recorded by the learned trial Judge do not call for any interference. Resultantly, the appeals fail and are dismissed accordingly. Impugned judgments and orders dated 31.03.2008, passed in Criminal Case Nos. 2713, 2714, 2716, 2715, 2277, 2732 and 2733 of 2004 by the learned 9th Additional Senior Civil Judge and Judicial Magistrate First Class, Bhavnagar, recording the acquittal are confirmed. Bail bonds, if any, shall stand cancelled. R&P, if received, be transmitted back forthwith.
[ A. C. Joshi, J. ] hiren Page 25 of 25 Downloaded on : Tue Jun 28 21:17:13 IST 2022