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2024 DIGILAW 303 (GUJ)

Maheshkumar Nathabhai Desai v. State Of Gujarat

2024-02-14

M.K.THAKKER

body2024
JUDGMENT : Order in Criminal Misc. Application This Court has heard the matter finally at the admission stage. Leave as prayed for is granted. Hence, this application for leave to appeal is allowed. Order in Criminal Appeal 1. This appeal is filed under Section 378 of the Code of Criminal Procedure, 1973, challenging the judgment and order of acquittal dated 03.04.2023 passed by the learned Additional Chief Metropolitan Magistrate, N.I.A. Court No.36, Ahmedabad in Criminal Case No.95307 of 2021 whereby, the respondent – accused is acquitted from the charges under Section 138 of the Negotiable Instruments Act, 1881. 2. It is the case of the complainant that the appellant has given an amount of Rs.10 lacs to the respondent no.2 as a hand loan. Upon request being made by the appellant to return the amount, the cheque bearing No.000062 dated 18.06.2021 of Ahmedabad District Co-operative Bank Ltd. was issued in favour of the appellant for the amount of Rs.10 lacs. The aforesaid cheque is deposited in the account by the appellant on 22.06.2021 however, the said cheque was returned unpaid with an endorsement of “payment stopped by the drawer”. 2.1. The statutory demand notice dated 17.07.2021 was issued to the respondent – accused against which, the reply was given by the respondent – accused on 31.07.2021. Thereafter, the private complaint came to be filed under Section 138 of the Negotiable Instruments Act on 17.08.2021. Vide order dated 17.08.2021, process came to be issued under Section 204 of the Code of Criminal Procedure and the plea of the respondent no.2 was recorded on 22.06.2022 wherein, the accused pleaded not guilty and claimed to be tried. The appellant was cross-examined by the respondent no.2. Thereafter, further statement under Section 313 of the Code of Criminal Procedure was recorded wherein, the defense was raised by the accused no.2 that the old cheque, which was given for the security was misused. After considering the evidence placed on record and the arguments advanced by the learned advocates for the respective parties, the respondent no.2 was acquitted on the ground that the disputed cheque is not issued to discharge the legally enforceable debt and the respondent had succeeded in rebutting the presumption, which is in favour of the complainant. Being aggrieved and dissatisfied with the aforesaid judgment and order of the acquittal, the present appeal is filed. 3. Heard learned advocate Mr.D.P. Kinariwala for the appellant. Being aggrieved and dissatisfied with the aforesaid judgment and order of the acquittal, the present appeal is filed. 3. Heard learned advocate Mr.D.P. Kinariwala for the appellant. 4. The learned advocate submits that the judgment and order passed by the learned trial Court, acquitting the respondent – accused by holding that the respondent – accused had successfully rebutted the presumption by cross- examining the complainant, is not in accordance with the evidence placed on record. It is submitted that the presumption is provided under Section 139 of the Code of Criminal Procedure wherein, it is provided that unless the contrary is proved, the presumption is in favour of the complainant with regard to the issuance of the cheque towards discharge of legally enforceable debt. The learned advocate submits that when the cheque contains the signature of the accused and there is no dispute about the signature, which amounts to acknowledging the debt by the respondent – accused and, therefore, even if the debt, as stated by the learned trial Court, is of the year 2015 but, when the acknowledgment was given in the year 2021, the conclusion about time barred debt by the learned trial Court is bad and illegal and, therefore, it is prayed that the judgment and order passed by the learned trial Court is required to be interfered with. 5. The learned advocate further submits that the learned trial Court erred in holding that the appellant is not having the sufficient income to lend the amount to the respondent – accused. The learned advocate submits that when the signature is not disputed and in the demand notice, the financial capacity was not challenged by the respondent – accused, holding that the appellant has failed to prove the financial capacity, is against the evidence on record and, therefore, the same is required to be interfered with. The learned advocate further submits that the defense of the respondent – accused was accepted without producing the sufficient material before the Court and, therefore, the judgment and order of acquittal is required to be interfered with. The learned advocate further submits that it is admitted by the respondent – accused that the cheque was issued for the purpose of security in the year 2015 however, the accused has not placed anything on record to show that the said cheque was demanded back during the period from 2015 to 2021. The learned advocate further submits that it is admitted by the respondent – accused that the cheque was issued for the purpose of security in the year 2015 however, the accused has not placed anything on record to show that the said cheque was demanded back during the period from 2015 to 2021. Neither it is proved that the accused had paid the amount, which was borrowed however, in absence of the aforesaid evidence, the learned trial Court had acquitted the respondent – accused. The learned advocate submits that the judgment and order passed by the learned trail Court, acquitting the respondent – accused, is bad in law and, therefore, the same is required to be quashed and the respondent – accused is required to be punished accordingly and the appeal is required to be allowed. 6. Considering the submissions advanced by the learned advocate for the appellant, relevant provisions of the Negotiable Instruments Act are required to be re-looked, which are reproduced herein below:- Section 118 – Presumptions as to negotiable instruments Until the contrary is proved, the following presumptions shall be made: 1. of consideration; that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; 2. as to date; that every negotiable instrument bearing a date was made or drawn on such date; 3. as to time of acceptance; that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity; 4. as to time of transfer; that every transfer of a negotiable instrument was made before its maturity; 5. as to order of indorsements; that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon; 6. as to stamp; that a lost promissory note, bill of exchange or cheque was duly stamped; 7. as to time of transfer; that every transfer of a negotiable instrument was made before its maturity; 5. as to order of indorsements; that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon; 6. as to stamp; that a lost promissory note, bill of exchange or cheque was duly stamped; 7. that holder is a holder in due course; that the holder of a negotiable instrument is a holder in due course: Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an SP offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burthen of proving that the holder is a holder in due course lies upon him. 138 Dishonour of cheque for insufficiency, etc., of funds in the account. 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 two years], or with fine which may extend to twice the amount of the cheque, or with both: 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.] Section 139 in The Negotiable Instruments Act, 1881 139. Presumption in favour of holder.—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. 7. Presumption in favour of holder.—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. 7. Considering the above provisions, what is the presumption that is elaborated in the judgment rendered by the Hon’ble Apex Court in the case of M.S.Narayana Menon vs. State Of Kerala reported in (2006) 6 SCC 39 , a discussion with regard to the same is reproduced herein below. 40. “In P. Ramanatha Aiyar's Advanced Law Lexicon, 3rd edition, at page 3697, the term 'presumption' has been defined as under: "A presumption is an inference as to the existence of a fact not actually known arising from its connection with another which is known. A presumption is a conclusion drawn from the proof of facts or circumstances and stands as establishing facts until overcome by contrary proof. A presumption is a probable consequence drawn from facts (either certain, or proved by direct testimony) as to the truth of a fact alleged but of which there is no direct proof. It follows, therefore that a presumption of any fact is an inference of that fact from others that are known". (per ABBOTT, C.J., R. v. Burdett, 4 B. & Ald, 161) The word 'Presumption' inherently imports an act of reasoning a conclusion of the judgment; and it is applied to denote such facts or moral phenomena, as from experience we known to be invariably, or commonly, connected with some other related facts. (Wills on Circumstantial Evidence) A presumption is a probable inference which common sense draws from circumstances usually occurring in such cases. The slightest presumption is of the nature of probability, and there are almost infinite shades from slight probability to the highest moral certainty. A presumption, strictly speaking, results from a previously known and ascertained connection between the presumed fact and the fact from which the inference is made." Having noticed the effect of presumption which was required to be raised in terms of Section 118(a) of the Act, we may also notice a decision of this Court in regard to 'presumption' under Section 139 thereof”. 8. 8. Keeping in mind the above provisions and the evidence on record, if we may consider the case of the complainant, then it is the case of the complainant that the complainant is doing the business of construction and the respondent – accused is serving in the Ahmedabad District Co-operative Bank Ltd. Prior to three years from the date of complaint, the amount of Rs.10 lacs was lent by the appellant and for payment of the aforesaid amount, the cheque was issued by the respondent – accused dated 18.06.2021. The aforesaid cheque was returned with an endorsement of “stopped payment” and thereafter, the demand notice was issued below Exh.10. 9. The aforesaid notice was replied by the respondent – accused, which is produced below Exh.13 wherein, the accused raised the contention that in the year 2015, amount of Rs.5 lacs was lent by the appellant to the respondent – accused and at that time, the cheque bearing no.000062 was taken towards the security. The aforesaid amount was repaid in the year 2017 and on demanding back the security cheque, evasive reply was given. As the cheque was not returned, the same was stopped payment by giving an application with the bank authority. It was contended in the reply of the demand notice that the disputed cheque as well as the other cheques bearing nos.000061, 000063, 000064, 000067 and 000068 for which also, the stop payment application was given in the year 2018. 10. The contention of the appellant with regard to the stop payment was corroborated with the endorsement made in the memo of the disputed cheque. In addition to the above contention raised in the demand notice, the accused had cross-examined the complainant wherein, the following admission was made by the complainant:- (i) I am maintaining the register where, if I would lend the money, then the same would be noted in the said register. It is true that on whose presence, at which place and which time, the money was lent, was not mentioned either in the complaint, examination-in-chief or in the notice. The note which is made with regard to the lending of money is in my mobile. It is true that I have not produced any note in my complaint, examination-in-chief or in the notice. The note which is made with regard to the lending of money is in my mobile. It is true that I have not produced any note in my complaint, examination-in-chief or in the notice. I am filing the income tax return and the money, which was lent to the respondent – accused is not shown in the income tax returns. I did not produce any income tax return on record. (ii) It is true that the amount of Rs.10 lacs was lent and was accepted. Corroborating the same, no any evidence was produced. On the question being raised that whether the amount of Rs.5 lacs was lent in the year 2015? The answer was given that I did not remember the same. (iii) It is true that in the year 2015, the accused had given the security cheque. It is denied that the amount was paid during the year 2015 to 2017 in installments. On being perused exh.8, the disputed cheque, he replied that “I could not get an idea that the amount and the name are written by the different pens. I did not identify the signature of the respondent – accused. (iv) It is true that to show my source of income, no any documents were placed on record. 11. The complainant had further examined witness – Vinodbhai Jethabhai Patel below Exh.14 – Branch Manager of Ahmedabad District Co-operative Bank Ltd., Rakhial Branch. From the evidence of this witness, no any incriminating material was placed, which may help the complainant or the accused but, one fact he deposed is that “it is true that the signature belongs to whom, I cannot state surely”. 12. By cross-examining the complainant, to ascertain that whether the presumption, which is in favour of the complainant is rebutted or not. The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of phrase "unless contrary is proved" in Section 139 of the Act is required to be read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act. It makes clear that once that presumptions to be raised under both the provisions are rebuttable, then again, the burdon would be shifted on the complainant to prove his case. It makes clear that once that presumptions to be raised under both the provisions are rebuttable, then again, the burdon would be shifted on the complainant to prove his case. When the presumption is rebuttable, it only points out that the party on whom, lies the duty of going forward with the evidence, on the facts presumed and when the party has produced the evidence fairly and reasonably tending to show that the real fact as presumed, the purpose of presumption is over. 13. The accused in trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case, the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt is existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the cheque in question was not supported by consideration and that, there was no any debt or liability to be discharged by him. However, the Court need not insist in every case that the accused should prove the non-existence of consideration and the debt by leading direct evidence because, the existence of negative evidence is neither possible nor contemplated. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the Court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that did not exist. 14. In the instant case, the contention of the complainant that in the year 2021, the cheque was issued towards the payment of the debt by the respondent – accused, was falsified in the cross-examination wherein, the complainant himself had admitted that the cheque is of the year 2015 and given towards the security. 14. In the instant case, the contention of the complainant that in the year 2021, the cheque was issued towards the payment of the debt by the respondent – accused, was falsified in the cross-examination wherein, the complainant himself had admitted that the cheque is of the year 2015 and given towards the security. The further question, which was put to the complainant that whether the amount of Rs.5 lacs was lent in the year 2015, was answered not in negative but, he said that “I did not remember it.” It shows that the presumption, which is in favour of the complainant was rebutted by creating the circumstances in the cross-examination and the case, as projected by the complainant is not the same. 15. In addition to this cross-examination, reply to the demand notice was given wherein, it was contended by the respondent – accused that for the cheque bearing no.000062, stop payment application was given in the year 2018. It suggests that the issuance of the cheque, as contemplated by the complainant in the year 2021, is not true. 16. With regard to the time barred debt, it is true that as per Section 18 of the Limitation Act provides that when the acknowledgment was given by the respondent – accused, fresh limitation period would start from that day but, in the present case, there was no any question of acknowledgment as the complainant himself had admitted with regard to the issuance of the cheque in the year 2015. By proving this, the accused had brought the fact which appears to be probable and, therefore, the burden to prove shifts again on the complainant. The accused has not to prove the case beyond reasonable doubt but, only the circumstances or the preponderance of probability, is itself sufficient to dislodge the legal presumption attached to the complainant. Once the respondent is able to show the preponderance of probability to dislodge the legal presumption, the burden again shifts on the complainant to establish the passing of consideration. The respondent – accused had, by creating the circumstances, successfully rebutted the presumption and thereafter, though, again the burden was shifted on the complainant to prove the case, he remained fail in discharging the same. This Court has also considered the decision rendered by the Hon’ble Apex Court in the case of Basalingappa Vs. Mudibasappa reported in (2019) 5 SCC 418 . This Court has also considered the decision rendered by the Hon’ble Apex Court in the case of Basalingappa Vs. Mudibasappa reported in (2019) 5 SCC 418 . Paragraph 25 is reproduced herein below:- 25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner: 25.1. 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. 25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3. 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. 25.4. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5. It is not necessary for the accused to come in the witness box to support his defence." 17. Considering the above judgment and the overall circumstances of the case, this Court is of the view that the judgment and order of acquittal passed by the learned trial Court is in accordance with law and there is no any illegality or perversity found in the judgment and, therefore, the same is required to be confirmed. 18. This being an acquittal appeal, as per the judgment rendered by the Hon’ble High Court of Gujarat Court in the case of State of Gujarat Vs. Jitendra C. Thakkar reported in 2017 (4) GLR 3200 wherein it is held that when two views are possible, the view which is in favour of the accused is to be considered. 6.10 That in an appeal against acquittal filed under Section 378 of the Code, 1973, as such there is no limitation on the Appellate Court to review the evidence. 6.10 That in an appeal against acquittal filed under Section 378 of the Code, 1973, as such there is no limitation on the Appellate Court to review the evidence. But at the same time, if on fact as well as on law, conclusion drawn by the trial Court based on appreciation of evidence unless compelling, cogent and substantial reasons appear for interference and when findings of the trial Court are palpably wrong, manifestly erroneous or demonstrably unsustainable, acquittal is not to be reversed or disturbed. When acquittal is based on the surmises and conjectures and not substantiated by law and evidence on record, an Appellate Court may re-appreciate and review the entire evidence to see that undue benefit is not given to the accused. Now, it is well settled that even if two views are possible, the Appellate Court shall not ordinarily interfere with the judgment of acquittal in a routine manner unless the judgment of the trial Court is per se wrong on facts and on law or perverse, substituting its own views by the High Court is not permissible. That in case of acquittal, it is to be borne into mind by the Appellate Court that there is double presumption in favour of the accused that firstly, presumption of innocence in favour of a guilty on the premise that every person should be presumed to be innocent unless he is proved to be guilty by the Court of Law, and secondly, when accused secures an acquittal, such presumption of innocence is reinforced and reaffirmed by the trial Court. 19. In view of the above discussion, this appeal fails and the judgment and order of acquittal dated 03.04.2023 passed by the learned Additional Chief Metropolitan Magistrate, N.I.A. Court No.36, Ahmedabad in Criminal Case No.95307 of 2021 is hereby confirmed. 20. Record and Proceedings be sent back to the concerned learned trial Court.