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Gujarat High Court · body

2021 DIGILAW 629 (GUJ)

Jayantibhai Ramanbhai Patel v. State Of Gujarat

2021-07-27

B.N.KARIA

body2021
JUDGMENT : 1. Rule returnable forthwith. Learned APP waives service of notice of rule for and on behalf of the respondent-State. 2. The brief facts of this case are as under:- 2.1 That the complainant and the original accused-applicant is known to each other as they are doing business of Tobacco. That, tobacco worth Rs. 5,95,000/- was sold to the accused. That, according to the complaint, Rs.1,30,000/- was paid and cheque No. 000004 of Rs.60,000/- of HDFC Bank Nadiad Branch dated 24.4.2017 was given by the accused towards remaining payment. That, as per complaint, the said cheque was deposited by the complainant in Gujarat Rural Bank, Nandisar Branch on 7.7.2017, which was returned on 10.7.2017 with the endorsement of “insufficient fund”. That, a notice dated 2.8.2017 was issued by the complainant to the accused-applicant which is served to the accused-applicant on 5.8.2017, even though accused-applicant neither replied nor complied with as claimed under the notice Hence, the complaint was filed. That, initially the complaint was registered as Criminal Inquiry No. 182 of 2017 vide order dated 8.9.2017 and it was kept for inquiry and the complainant was directed to remain present on 15.9.2017. That, the complainant has produced a list of documents along with the complaint and the examination-in- chief of the complainant on affidavit was also presented afterwards. That, by order dated 15.9.2017, below Exh. 1, complaint was ordered to be registered and process was directed to be issued u/s. 204 of the Code of Criminal Procedure making returnable on 9.10.2017. That, the said complaint is being registered as Criminal Case No. 2208 of 2017. 3. Being aggrieved by and dissatisfied with the order of issuance of process in the said complaint, the applicant has preferred this Criminal Misc. Application to quash and set aside the impugned complaint along with the order of issuance of process against him and all subsequent proceedings in connection thereof. 4. Learned advocate for the applicant submits that the cheque in question was misused by the respondent No.2 to grab more money from the applicant for which the applicant was not liable to pay the same. It is further submitted that the demanded amount has already been paid prior to presentation of the cheque. Therefore, no offence u/s. 138 of the Negotiable Instruction Act can be said to have been committed by the present applicant. It is further submitted that the demanded amount has already been paid prior to presentation of the cheque. Therefore, no offence u/s. 138 of the Negotiable Instruction Act can be said to have been committed by the present applicant. Hence, the issuance of process for the same deserves to be quashed and set aside Referring documentary list produced on record by the original complainant before the trial, it is submitted that reply of the notice issued by the complainant was given on 22nd August, 2017 at Sr. No.6. However, the complainant, in his chief-examination before the trial Court, has denied of the reply given by the present applicant. That, the original complainant is a lier and suppressed the correct facts before the Court below. That, he has never denied of accepting Rs.60,000/- under his signature, as per receipt issued by him produced at annexure “D”, therefore, he is silent on his part. It is further submitted that there is no legal due payable to the respondent No.2 by the applicant. It is further submitted that cheque was issued only for security purpose by the applicant. Therefore, he has requested that there is a clear misuse of process by filing the complaint u/s. 138 of N.I.Act and abuse of process of law. Hence, it was requested by the learned Advocate for the petitioner to quash and set aside the Criminal Case No. 2208 of 2017 pending before the learned 3rd Additional Civil Judge and Judicial Magistrate First Class, Godhara. 5. From the other side, Mr.Pradip Patel, learned advocate appearing for the respondent No.2 has objected the submissions made by learned advocate for the applicant and submitted that paying Rs.60,000/- by the applicant to respondent No.2 or issuing any receipt under his signature can be proved or disproved at the relevant point of time while recording the evidence before the trial Court. That, criminal complaint was lodged against the present applicant u/s. 138 of N.I.Act. It is further submitted that business transaction between the parties was not denied by the present applicant. That, giving cheque under the signature of the applicant for the amount of Rs. 60,000/- dated 24th April, 2017 was also not denied by the present applicant. That factual aspect cannot be examined by this Court issuing receipts by the respondent No.2 or accepting any amount from the applicant. That, giving cheque under the signature of the applicant for the amount of Rs. 60,000/- dated 24th April, 2017 was also not denied by the present applicant. That factual aspect cannot be examined by this Court issuing receipts by the respondent No.2 or accepting any amount from the applicant. That, issue of giving cheque for security purpose may not be examined by this Court at this juncture in this petition under Section 482 of Code of Criminal Procedure. Hence, it is requested by the respondent No.2 to dismiss this petition. 6. Mr. Moxa Thakkar, learned APP for the respondent -State has objected to allow this petition and submitted that the issue requires evidence of the parties likely to be recorded by the trial Court and therefore, this Court may not exercise the powers under section 482 of Cr.P.C in favour of the present applicant. 7. Having heard learned advocate appearing for the applicant; learned advocate appearing for the respondent No.2 as well as learned APP for the respondent-State, it appears that a complaint filed under Section 138 of the N.I.Act by the respondent No.2 was registered as Criminal Case No. 2208 of 2017. That, process was issued under section 204 of the Code of Criminal Procedure by the learned trial Court, as per order passed below Exh. 1 on 15th September, 2017. It is not in dispute that the cheque was issued by the present applicant under his signature in favour of respondent No.2 on 24th April, 2017 for the amount of Rs. 60,000/- which is produced at page 19. It was not in dispute that the cheque was returned back by the bank authority on account of “insufficient fund” by return memo dated 10th July, 2017. There is correspondence of notice issued by the respondent No.2 dated 2nd August, 2017 and the reply given by the present applicant on 22nd August, 2017. It is contended in the reply of the notice given by the present applicant that Rs.60,000/- was paid by him under the receipt of the respondent No.2 dated 23rd April, 2017 as well as dated 20th May, 2017. It is also contended that the cheque of Rs. 60,000/- dated 20th April, 2017 was given to the respondent No.2 by way of security. The amount of Rs. 60,000/- was paid in cash by the present applicant to the original complainant and remaining amount of Rs. It is also contended that the cheque of Rs. 60,000/- dated 20th April, 2017 was given to the respondent No.2 by way of security. The amount of Rs. 60,000/- was paid in cash by the present applicant to the original complainant and remaining amount of Rs. 5,440,/- was to be adjusted by the complainant. Therefore, there was no due remained to be paid by the present applicant. 8. The aspect of paying amount of Rs.60,000/- paid to the complainant by the applicant in two installments i.e. 23rd April, 2017 as well as dated 20th May, 2017 would require evidence before the trial Court. At this juncture, this fact is not denied by the original complainant, may be proved or disproved by the either side after recording evidence before the trial Court. In a quashing petition u/s. 482 of Cr.P.C., the factual aspect of paying any amount by the present applicant to the original complainant or issuing any receipt at Annexure “D” under the signature of the original complainant cannot be decided without recording any evidence of either side. Issuing cheque by the present applicant in favour of the original complainant dated 20th April, 2017 for the amount of Rs.60,000/- under his signature is undisputed. It is case on behalf of the petitioner that the cheque was given by way of security and same has been misused by the complainant. Once, the accused has admitted the issuance of the cheque which bears his signature, there is presumption that there exists a legally enforceable debt or liability under Section 139 of the N.I.Act. However, such a presumption is rebuttable in nature and the accused-applicant is required to lead the evidence to rebut such presumption. The applicant was required to lead evidence that the entire amount due and payable to the complainant was paid. 9. On the presumption under Section 139 of the N.I.Act, few decisions of the Hon’ble Apex Court are required to be referred to and considered which reads as under:- 6.1 In the case of K.N. Beena vs. Muniyappan, (2001) 8 SCC 458 , it is observed and held by this Court that under Section 118 of the N.I. Act, unless the contrary is proved, it is to be presumed that the negotiable instruments (including a cheque) had been made or drawn for consideration. It is further observed and held that under Section 139, the Court has to presume, unless the contrary is proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. It is further observed that thus in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that the cheque has not been issued for a debt or liability is on the accused. 6.2 In the case of Rangappa (supra) again, this Court had an occasion to consider the presumption of existence of a legally enforceable debt or liability under Section 139 of the N.I. Act. In the aforesaid decision, after considering other decisions of this Court on Section 118(a) and 139 of N.I. Act, it is observed and held that there exists a presumption which favours the complainant. It is further observed that the presumption under Section 139 of the N.I. Act is in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein there is existence of legally enforceable debt or liability can be contested. In Paragraph 27 this Court observed and has held as under: “27. 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. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendantaccused cannot be expected to discharge an unduly high standard or proof.” 6.3 In the case of Kishan Rao (Supra) after considering the decision of this Court in the case of Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513 , it is observed and held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose. This Court in paragraph 19 of that judgment considered paragraph 14, 15, 18 & 19 of the decision in the case of Kumar Exports (Supra) as under: 19. This Court in Kumar Exports v. Sharma Carpets (Supra), had considered the provisions of the Negotiable Instruments Act as well the Evidence Act. Referring to Section 139, this Court laid down the following in paras 14, 15, 18 and 19: “14. Section 139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. 15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) “may presume” (rebuttable), (2) “shall presume” (rebuttable), and (3) “conclusive presumptions” (irrebuttable). The term “presumption” is used to designate an inference, affirmative or disaffirmative of the existence of a fact, conveniently called the “presumed fact” drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means “taking as true without examination or proof”. * * * 18. Presumption literally means “taking as true without examination or proof”. * * * 18. Applying the definition of the word “proved” in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists. 19. The use of the phrase “until the contrary is proved” in Section 118 of the Act and use of the words “unless the contrary is proved” in Section 139 of the Act read with definitions of “may presume” and “shall presume” as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over.” 10. This Court has also considered the view taken in Criminal Misc. Application No. 4616 of 2021 which reads as under :- 15. In HMT Watches Ltd. versus M.A. Abida[8], relied upon on behalf of the respondent, this Court dealt with the contention that the proceedings under Section 138 were liable to be quashed as the cheques were given as “security” as per defence of the accused. Negativing the contention, this Court held :- “10. In HMT Watches Ltd. versus M.A. Abida[8], relied upon on behalf of the respondent, this Court dealt with the contention that the proceedings under Section 138 were liable to be quashed as the cheques were given as “security” as per defence of the accused. Negativing the contention, this Court held :- “10. Having heard the learned counsel for the parties, we are of the view that the accused (Respondent 1) challenged the proceedings of criminal complaint cases before the High Court, taking factual defences. Whether the cheques were given as security or not, or whether there was outstanding liability or not is a question of fact which could have been determined only by the trial court after recording evidence of the parties. In our opinion, the High Court should not have expressed its view on the disputed questions of fact in a petition under Section 482 of the Code of Criminal Procedure, to come to a conclusion that the offence is not made out. The High Court has erred in law in going into the factual aspects of the matter which were not admitted between the parties. The High Court further erred in observing that Section 138(b) of the NI Act stood uncomplied with, even though Respondent 1 (accused) had admitted that he replied to the notice issued by the complainant. Also, the fact, as to whether the signatory of demand notice was authorised by the complainant company or not, could not have been examined by the High Court in its jurisdiction under Section 482 of the Code of Criminal Procedure when such plea was controverted by the complainant before it. This court in case of “Deepak Shyamsunder Agrawal v. State of Gujarat and another ” reported in 2017 Law Suit (Guj) 343, in para 15, has held as under: “Considering the above stated legal settled principles of law, while dealing with a quashing petition, the Court has ordinarily to proceed with all the averments in the complaint, defence of the accused cannot be considered at this stage. The Court considering the prayer for quashing, does not adjudicate upon the disputed questions of fact. Therefore, the question has to be answered in favour of the respondent no.2 and against the applicant. Accordingly, this court did not find any merits in this petition, thereafter, the same is dismissed. Ad interim relief stands vacated. The Court considering the prayer for quashing, does not adjudicate upon the disputed questions of fact. Therefore, the question has to be answered in favour of the respondent no.2 and against the applicant. Accordingly, this court did not find any merits in this petition, thereafter, the same is dismissed. Ad interim relief stands vacated. Rule nisi discharged with no order as to costs.” 11. Coming back to the facts in the present case and considering the fact that the applicant-accused has admitted the issuance of the cheque and his signature on the cheque and that cheque in question was issued for security purpose as well as the amount was paid by him. There is a presumption under Section 139 of the N.I.Act that there exists a legally enforceable debt or liability. Of course, such presumption is rebuttable in nature. However, to rebut the presumption the accused was required to lead the evidence that full amount due and payable to the complainant has been paid. In the present case, two receipts are produced by the accused-applicant which requires to be proved by him with cogent evidence in trial. The story put forward by the applicant-accused that the cheque was given by way of security is not believable at this juncture to rebut the presumption. 12. In view of the reasons stated above, the prayer made by the applicant to quash and set aside the Criminal Case No. 2208 of 2017 pending before the learned 3rd Additional Civil Judge and Judicial Magistrate First Class, Godhara cannot be accepted by this Court. Hence, this application deserves to be dismissed and dismissed accordingly. Rule is discharged. Interim relief if any, stands vacated.