Gujarat High Court
Jayantilal Maganlal Brahmbhatt vs State Of Gujarat & on 14 February, 2013
Author: Harsha Devani
Bench: Harsha Devani
JAYANTILAL MAGANLAL BRAHMBHATT....Appellant(s)V/SSTATE OF GUJARAT R/CR.A/35/2008 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD CRIMINAL APPEAL NO.35 of 2008 FOR APPROVAL AND SIGNATURE: HONOURABLE MS. JUSTICE HARSHA DEVANI ============================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment? 2 To be referred to the Reporter or not? 3 Whether their Lordships wish to see the fair copy of the judgment? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder? 5 Whether it is to be circulated to the civil judge? ============================================= JAYANTILAL MAGANLAL BRAHMBHATT....Appellant(s) Versus STATE OF GUJARAT & 1....Respondent(s) ============================================= Appearance: MR RC JANI, ADVOCATE for the Appellant MR DHARMESH V SHAH, ADVOCATE for the Respondent(s) No. 2 MR NR PARIKH, ADVOCATE for the Respondent(s) No. 2 MR HK PATEL, ADDITIONAL PUBLIC PROSECUTOR for the Respondent(s) No. 1 ============================================= CORAM: HONOURABLE MS. JUSTICE HARSHA DEVANI Date : 14/02/2013 ORAL JUDGMENT
1. This appeal is directed against the judgment and order dated 12th April, 2007 passed by the learned 6th Additional Senior Judicial Magistrate, Gandhinagar in Criminal Case No.5293/2002 whereby he has acquitted the respondent accused of the offences punishable under section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the Act ).
2. Briefly stated, the facts of the present case are that the appellant (original complainant) lodged a complaint before the learned Judicial Magistrate First Class, Gandhinagar alleging that he was a native of Devda village of Vijapur taluka and presently, he was residing at Gandhinagar and was leading a retired life. The accused was residing at Mumbai and was working as a Chartered Accountant at Mumbai and was the proprietor of the said firm. The complainant had worked as the Manager of the Babulnath Temple Trust from 1977 to 1998 where the accused used to come for the purpose of internal audit; hence, the accused knew the complainant since several years. During the period 1991 to 1997, the accused, in instalments, had taken money from the complainant and, in all, an amount of Rs.42 lakhs was outstanding which was to be recovered by the complainant. In respect of such outstanding amount, the accused had issued eight cheques drawn in favour of the complainant on the Bombay Mercantile Co-operative Bank Ltd. for a total sum of Rs.42 lakhs. On 24th June, 2002, the accused had signed eight cheques and given the same to the complainant. The accused had given the complainant cheque No.114110 for Rs.15,00,000/-, cheque No.114111 for Rs.5,00,000/-, cheque No.114112 for Rs.5,00,000/-, cheque No.114113 for Rs.5,00,000/-, cheque No.114114 for Rs.5,00,000/-, cheque No.624532 for Rs.6,00,000/-, cheque No.624533 for Rs.50,000/- and cheque No.927198 for Rs.50,000/-.
At the time of issuing the cheques, the accused had assured him that the moment the cheques were presented before the bank, the same would be honoured and he would receive the amount stated therein. It is further the case of the complainant that he had presented all the aforesaid eight cheques at the Gandhinagar branch of the State Bank of India on 16th July, 2002, however, to the surprise of the complainant, cheques No.114110 to 114114 issued by the accused, for a total amount of Rs.35 lakhs, were returned by the banker of the accused by a return memo dated 29th July, 2002 with endorsement No.7 stop payment . Also, the other cheques bearing No.624532, 624533 and 927198, for a total amount of Rs.7 lakhs, came to be returned by the banker of the accused by a return memo dated 29th July, 2002 with the endorsement insufficient funds . In this regard, the banker of the complainant had sent a letter dated 8th August, 2002 to the complainant through courier, which he had received on 14th August, 2002. Thereafter, he had issued notice to the bank through his advocate under section 138 of the Act on 17th August, 2002 by way of Registered A.D. Post and U.P.C. Despite the fact that such notice has been served upon the accused, he had not paid the amount of Rs.42 lakhs to the complainant till date, and thereby committed the offence under section 138 of the Act.
3. During the course of trial, the complainant examined himself as well as two other witnesses and also produced certain documentary evidence on record. The learned Judicial Magistrate after appreciating the evidence on record found that the complainant had not proved that there was any legally enforceable debt in respect of which the cheques had been issued; that even if it were to be accepted that the cheques were issued in respect of a legally enforceable debt, the accused had led sufficient evidence to rebut the presumption against him under section 138 of the Act and hence, it was for the complainant to establish that he had, in fact, given the sum of Rs.42 lakhs to the accused. The learned Judicial Magistrate held that the complainant had not led any evidence to show that he had sufficient income whereby he had the capacity to give such a huge loan and was also of the view that the say of the complainant that all the eight cheques of different amounts had been issued by the same person on the same day is quite unbelievable. The learned Magistrate found that the say of the accused that the cheques which were given to the complainant had been misused to be more believable. On a preponderance of probabilities, the learned Magistrate found that the case of the accused appears to be more credible than the case of the complainant and held that the prosecution has not established the charges levelled against the accused beyond reasonable doubt and acquitted him.
4. Mr. R.C. Jani, learned advocate for the appellant assailed the impugned order by submitting that the learned Magistrate has failed to appreciate the evidence on record in proper perspective and more particularly, has ignored very significant evidence which had been brought on record by the complainant in the nature of the compromise purshis filed by the accused (Exh.94) whereby he had agreed to settle the matter with the complainant and pay compensation of Rs.25 lakhs to him. It was submitted that in view of the above admission of the accused, which formed part of the proceedings, the complainant had proved that the accused had accepted the existence of a legally enforceable debt and that the said settlement purshis could also be treated as an acknowledgment by the accused of the debt, which would automatically extend the period of limitation. It was further submitted that in the facts of the present case, it may be that the loan was given during the period from 1991 to 1997, however, the very fact that the accused had given cheques in respect of the said loan to the complainant was indicative of the fact that he had accepted and acknowledged the existence of the loan. Under the circumstances, the learned Magistrate was not justified in holding that the cheques had not been issued in respect of a legally enforceable debt. Attention was also drawn to the fact that though the notice under section 138 of the Act had been duly issued to the accused, he had not bothered to reply to the same and hence, the defence during the course of trial ought not to have been accepted by the learned Magistrate. Attention was invited to Exh.81 namely, the deposition of Arif Hussain Gulam Farid Shaikh, who was discharging duties in the legal department of the Khanpur branch of the Bombay Mercantile Co-operative Bank. It was submitted that the said witness had admitted the signature of the accused on all the cheques. The appellant has also placed alongwith the appeal memo copies of twelve receipts, which according to him had been issued by the accused. The learned counsel, by placing reliance upon the said receipts had submitted that the said receipts are evidence of the fact that there is a clear admission on the part of the accused of having received the amount in question. Reference was made to clause (iii) of section 25 of the Act to submit that during the pendency of the trial, the accused by virtue of the purshis Exh.94 had made a clear admission of the acceptance of the amount and had also accepted that the same was in his handwriting in his cross-examination, under the circumstances, the learned Magistrate was not justified in ignoring the said piece of evidence which was a very significant piece of evidence. The learned advocate also took the court through the depositions of the complainant as well as the other witnesses to submit that through the testimonies of the said witnesses, it had been duly established that the accused had issued the eight cheques in favour of the complainant, which upon presentation had been dishonoured on the ground of stop payment and lack of sufficient funds . Under the circumstances, the offence under section 138 of the Act has not been clearly made out and the learned Magistrate was, therefore, not justified in acquitting the accused.
5. On the other hand, Mr. Dharmesh Shah, learned advocate for the respondent No.2 accused invited the attention of the court to the deposition of the respondent No.2-accused who had examined himself at Exh.92 to submit that the defence through the testimony of the said witness has duly proved that the cheques had not been issued to the complainant in respect of any amount paid by him and that the cheques which had been handed over in trust to the complainant as the Manager of the society had been misused by him. This is evident from the fact that five of the cheques allegedly issued by the accused are of one serial number whereas two other cheques bear a totally different serial number and are, therefore, issued from different cheque books whereas the last cheque bears a totally different number and is issued from a third cheque book. It was submitted that a person issuing any cheque on the same day to the same person, ordinarily would issue one cheque of the entire amount unless the same were of different dates. In the present case, the accused is alleged to have issued eight cheques for different amounts, all bearing the same dates, in favour of the complainant, which is contrary to normal human conduct. It was further submitted that even as per the say of the accused, the alleged amounts were given to the accused during the period 1991 to 1997, whereas the cheques in question have been issued on 24th June, 2002 which is much after the period of limitation for the purpose of instituting a suit for recovery of the said amount. Referring to the provisions of section 138 of the Act, it was submitted that an offence under the said section would be made out where a cheque issued in respect of any debt, or other liability, is dishonoured. Referring to the explanation appended to section 138 of the Act, it was submitted that the same specifically clarifies that the expression debt or other liability means a legally enforceable debt or other liability. It was submitted that a time barred debt cannot by any means be said to be a legally enforceable debt. Under the circumstances, even if the case of the complainant that the eight cheques had been issued by the accused were accepted to be true, even then the same cannot be said to have been issued in connection with a legally enforceable debt and as such, no offence under section 138 of the Act can be stated to have been made out. Referring to the record of the case, it was pointed out that the cheques in question have been only signed by the accused and that all the other details therein have not been filled in by him, which is indicative of the fact that the cheques issued by the accused for the purpose of making payment to the society, had been misused by the complainant. Reliance was placed upon the decision of the Bombay High Court in the case of Smt. Ashwini Santosh Bhatt vs. Shri Jeevan Divakar, ACQ-DCC PAN No.249 for the proposition that when the cheque is issued in respect of a time-barred debt, the same is not a legally enforceable debt and as such, the provisions of section 138 of the Act would not be attracted. In conclusion, it was submitted that the learned Magistrate has examined the evidence on record in detail and has given cogent, convincing and sufficient reasons in support of his conclusions, therefore, in the absence of any perversity in the findings recorded by the learned Magistrate, there is no warrant for intervention by this court.
6. A perusal of the impugned judgment and order reveals that the learned Magistrate has referred to the facts of the case as well as the depositions of the witnesses in great detail. Hence, for the sake of brevity, it is not necessary to reiterate the same.
7. A perusal of the record of the case reveals that it is the case of the complainant that he had given different amounts at different times between the period 1991 to 1997 and that ultimately he was entitled to recover an amount of Rs.42 lakhs from the accused. That in respect of such amount, on 24th June, 2002, the accused had issued eight different cheques as described hereinabove, in favour of the complainant drawn on the Bombay Mercantile Co-operative Bank Ltd. In support of his case, the complainant has examined himself at Exh.34 wherein he has deposed the facts stated in the complaint. In his examination-in-chief, the complainant has stated that the notice under section 138 had been issued to the accused through the Mumbai Post Office by way of Registered A.D. post on 17th August, 2002 which had been served upon the accused on 22nd August, 2002 in respect of which an acknowledgment slip had been issued. In his cross-examination, it has been revealed that at the time when the notice came to be issued through the advocate, the complainant was at Mumbai. He had accepted that on the acknowledgment slip (Exh.55), the signature is of the servant of the accused and not of the accused. He has also accepted that he was paying income-tax regularly throughout his twenty-one years of service. He has categorically stated that he has no written documentary evidence to show that he had given the accused the amount stated in the complaint. From his cross examination, it has come out that his monthly pay while he was working at the Babulnath temple was Rs.7,200/- and that he had worked for twenty-one years at Babulnath temple and had, in all, earned Rs.18,14,400/-. Other than that, he used to receive income from rent, and was given rent-free accommodation, free electricity, bonus etc. and he also had agricultural income of Rs.50,000/-. He has admitted that such facts had been revealed only in his deposition before the court and that he was ready to bring documentary evidence in support thereof on the next date of hearing. He has also accepted that he was filing income-tax returns and stated that he would produce the same before the court on the next date of hearing. On the next date during the course of his further cross-examination, he has stated that earlier he had stated before the court that he would produce the statements of his income-tax returns as well as agricultural income, but he had not brought the same as on account of rains the same had become wet and were destroyed. He has deposed that he was not aware that if documents are destroyed, duplicate copies can be obtained.
8. In support of his case, the complainant has also examined one Arif Hussain Gulam Farid Shaikh, who was working in the legal department of the Bombay Mercantile Co-operative Bank, Khanpur Branch since the last sixteen years. He has deposed regarding the cheque-return memos issued in respect of cheques which came to be returned on account of insufficient funds. The complainant has also examined one Umesh Govardhan Shastri, who was serving as Chief Manager in the State Bank of India, Sector No.10B, Gandhinagar and by way of filing an affidavit of the said witness, he has deposed to the effect that the complainant had deposited the above-referred cheques in his savings account for clearing on 24th June, 2002 and that all the said cheques had been sent for clearing but were dishonoured and returned unpaid by the Bombay Mercantile Co-operative Bank Ltd., Fort Branch, Mumbai. The said cheques were returned alongwith the return memos dated 29th July, 2002 by the said bank for the reasons already referred to hereinabove. He has deposed that the original cheques alongwith the return memos were delivered to the complainant on 8th August, 2002.
9. Thus, from the testimony of the complainant and the above-referred two witnesses, what is established is that eight cheques for a total amount of Rs.42 lakhs bearing the signature of the accused had been presented by the complainant before the State Bank of India, Gandhinagar and that the same were dishonoured for the reason that in respect of five cheques, there were instructions of stop payment and in respect of the other three cheques, funds were insufficient.
10. It may be noted that in the present case, the respondent No.2 has examined himself at Exh.92 to bring out the fact that he was acquainted with the complainant since prior to 1987 as he (the complainant) was the Manager of the Babulnath temple and he was the internal auditor. He has deposed that the complainant, in the year 1991, had told him that he had funds for investment and had enquired from him as to whether the same could be invested whereupon he had suggested certain companies where the complainant could invest such monies and he would get interest of 18 to 36%. In 1994, he had ceased to be the internal auditor of the Babulnath temple and that in the year 1997-98, the complainant was removed from the post of Manager of the said temple on the ground of cheating and breach of trust. That a complaint had been filed against the complainant by the Babulnath Temple Trust, however, the accused was not aware of the same. Upon the services of the complainant being terminated by the temple, he had approached the accused, at which point of time, he was not aware as to why his services had been terminated and he got him a job with the society. That he used to hand him over some cheque-books signed by him so that whenever any amount was required to be paid to the society towards maintenance and other monthly charges, the same could be paid by him. That he had learnt that the complainant had taken out ten cheques from his cheque-book and that the complainant was removed from the services of the society in June, 2000 as his services were not satisfactory. He has further deposed that in the year 2004, the complainant had lodged a criminal complaint before the Economic Offence Wing, Crime Branch, Mumbai and also produced a copy of the said complaint. He has further deposed that the complainant had asked him to invest various amounts on his behalf and that the complainant had given Rs.25 lakhs from his funds as well as from funds of his relatives which had been invested in different accounts. He has further deposed that the complainant was demanding such amount from the accused, however, he could not return the same as three four companies in which the amount had been invested had gone into liquidation. With a view to recover such amount from him, the complainant being his Manager had misused the cheques issued by him by filling in the amount of Rs.42 lakhs and presenting them before the court. He has deposed that all the cheques only bear his signature and that none of the writings thereon are in his handwriting. He has categorically deposed that the complainant has misused the cheques lying with him and has lodged a false complaint. In his cross-examination, he has admitted that the handwriting in Exh.94 is his.
11. In the light of the evidence which has come on record, one thing is evident that even according to the complainant, whatever amount was paid to the accused was between the periods 1991 to 1997. The complainant has nowhere stated any details regarding the time and the manner in which such amounts were paid. It appears to be the case of the complainant that he is entitled to recover Rs.42 lakhs from the accused towards outstanding dues. Evidently therefore, the period of limitation for instituting a suit for recovery of such amount would commence from the date on which the said amount was given to the accused, which would be different dates ranging from 1991 to 1997. Even taking the last date namely, the year 1997 into account, the cheques which are alleged to have been issued in the year 2002 have clearly been issued after the period of limitation for instituting any proceedings for recovery of such amount had elapsed. Evidently therefore, the cheques had been issued in respect of time-barred debts. The explanation to section 138 of the Act provides that for the purpose of the said section, debt or liability means a legally enforceable debt or other liability. Under section 138 of the Act, if any cheque issued in respect of any debt or liability is dishonoured, the person who has issued such cheque would be liable to be punished under the said provision. Therefore, the fact as to whether the cheque has been issued in respect of a legally enforceable debt is a very relevant factor for adjudicating any proceeding under section 138 of the Act. In Smt. Ashwini Santosh Bhatt v. Shri Jeevan Divakar (supra), the Bombay High Court has held that a cheque which was issued after the expiry of three years from the date of the loan was in respect of a time-barred debt and dishonour of the said cheque would not attract section 138 of the Act.
12. In Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54, the Supreme Court has held that section 138 of the Act has three ingredients viz. (i) that there is a legally enforceable debt; (ii) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes a legally enforceable debt; and (iii) that the cheque so issued had been returned due to insufficiency of funds. The proviso appended to the said section provides for compliance with legal requirements before a 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 a 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. It was further held that whereas the prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is preponderance of probabilities . 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 he relies. A statutory presumption has an evidentiary value. The question as to whether the presumption whether stood rebutted or not, must, therefore, be determined keeping in view the other evidence on record.
13. The facts of the present case are to be evaluated in the light of the principles laid down in the above referred decision. Thus, for the purpose of falling within the ambit of section 138 of the Act, one of the ingredients which is required to be satisfied is that there is a legally enforceable debt. In the facts of the present case, as noted earlier, the amounts in question had been paid during the period 1991 to 1997, under the circumstances, the period of limitation which is three years had clearly expired by the end of the year 2000. Therefore, the cheques which were issued in the year 2002, evidently were issued in respect of time-barred debts. In view of the explanation to section 138 of the Act, a debt or liability referred to in section 138 of the Act means a legally enforceable debt. Under the circumstances, even if the case of the complainant is accepted that such cheques had, in fact, been issued by the accused towards a debt of Rs.42 lakhs, even then, the same would be relatable to a time-barred debt and, therefore, cannot be said to have been issued in respect of a legally enforceable debt. The provisions of section 138 of the Act would, therefore, not be attracted in the facts of the present case.
14. The Andhra Pradesh High Court in Girdhari Lal Rathi v. P.T.V. Ramanujachari & another, 1997 (2) Crimes 658 on which reliance had been placed by the learned Magistrate in the impugned judgment, has held that in case a cheque is issued for a time-barred debt and it is dishonoured, the accused cannot be convicted under section 138 of the Negotiable Instruments Act simply on the ground that the debt was not legally recoverable. This court is in complete agreement with the view adopted by the Andhra Pradesh High Court.
15. Apart from the fact that the debt in question was a time-barred debt, the accused has, by leading sufficient evidence on record, rebutted the presumption against him by showing that the cheques had not been issued by him in respect of any amounts due and payable by him to the complainant. The case of the accused is that the cheques which he had given to the complainant in trust, for payment of monthly dues to the society, had been misused by the complainant. As held by the Supreme Court in the decision cited hereinabove, the proceedings under section 138 of the Act are required to be decided on a preponderance of probabilities. On an overall view of the facts which have come on record, the case of the complainant, namely that in respect of debts which have become time-barred, the accused had, on the same day, issued eight different cheques from three different cheque-books for a sum of Rs.42 lakhs which were dishonoured upon presentation thereof before the bank, lacks credibility. It is inconceivable that a person would issue different cheques of the same date to the same person instead of issuing one cheque for the entire amount, more so, when the same is drawn on the same bank and from the same account. Moreover, if at all the accused was not inclined to honour the cheques, there was no conceivable reason which would prompt him to issue cheques in favour of the complainant in respect of time-barred debts if he wanted to dishonour the same. On a preponderance of probabilities, the defence appears to be more probable. Besides, as noted hereinabove, even if the case of the complainant is accepted in its entirety, it is an established fact that the cheques in question had been issued in respect of time-barred debts which were not legally enforceable.
16. As can be seen from the impugned judgment and order, the learned Judicial Magistrate has discussed the evidence in great length and detail and has given reasons in support of each of the findings recorded by him. On behalf of the appellant, nothing has been pointed out to show that the findings recorded by the learned Magistrate are, in any manner, perverse.
17. Much reliance has been placed by the complainant on the document Exh.94 which is in the nature of a purshis allegedly submitted by the accused in some other proceeding for the purpose of contending that vide the said purshis the accused had acknowledged the existence of the debt and as such the period of limitation stood extended. From the evidence which has come on record, it is apparent that such purshis had not been filed in the present proceedings and hence, the question of the accused having acknowledged the debt and thereby extended the period of limitation would not be applicable. Moreover, the said document is dated 22nd September, 2004 which is evidently after the date of issuance of the cheques in question and the lodging of the present complaint. Section 18 of the Limitation Act, 1963 would, therefore, not come to the rescue of the appellant as such acknowledgement in writing has not been made before the expiration of the prescribed period of limitation for a suit or application in respect of such debt. Under the circumstances, an application made in some other proceeding before another court, would not amount to an acknowledgment on the part of the accused of the existence of the debt, more so, when at the time when the cheques came to be issued in favour of the complainant, there was no such acknowledgment and the debt had become time-barred.
18. It may also be noted that along with the appeal memo the appellant has annexed certain receipts allegedly issued by the accused in connection with the amounts in question. However, no such documentary evidence had been produced during the course of trial, and before this court also the same has not been produced along with any application for production of additional evidence, and the documents have simply been placed on record along with the memorandum of appeal. It is settled legal procedure that any party which seeks to place reliance upon any documentary evidence, is required to prove the contents of the same by leading evidence in support thereof. Without following any procedure as required under law, such documents which have simply been placed on record cannot be taken into consideration.
19. In the light of the above discussion, this court is of the view that the complainant has not proved the charges levelled against the accused beyond reasonable doubt. The court is in full agreement with the reasoning adopted by the learned Judicial Magistrate which is a plausible view. Under the circumstances, in the absence of any perversity being pointed out in the impugned judgment and order, there is no warrant for intervention by this court. The appeal being devoid of merits is accordingly dismissed.
( Harsha Devani, J. ) hki Page 18 of 18