JUDGMENT : M.K. THAKKER, J. 1. This appeal is filed under Section 378 of the Code of Criminal Procedure challenging the judgment and order of acquittal dated 05.04.2023 passed by the learned 2nd Additional Judicial Magistrate First Class and Civil Judge, Dahod in Criminal Case No. 1056 of 2022 whereby, the respondent-accused was acquitted from the charges under Section 138 of the Negotiable Instruments Act. 2. It is the case of the complainant that the complainant, who is the finance company, had given a loan for the amount of Rs. 7,10,000/- to the respondent-accused by way of the Hire Purchase Agreement for purchasing the vehicle. The respondent-accused, for the payment of the loan amount, has issued the cheque in favour of the complainant bearing cheque no. 009402 dated 22.01.2022 for the amount of Rs. 7,10,000/-. On depositing the said cheque with the bank, the same was returned with an endorsement ‘insufficient fund’ on 25.01.2022, therefore, the demand notice was issued to the complainant which was received by the complainant on 16.02.2022 however, the complainant neither replied nor complied with the said notice and, therefore, the private complaint came to be filed before the competent Court being Criminal Case No. 1056 of 2022. The learned trial Court, after recording the verification, has issued the summons vide order dated 13.05.2022. The accused appeared before the learned trial Court on 02.09.2022 and his plea was recorded below Exh.7 wherein, he has pleaded not guilty and claimed to be tried. 3. To prove the case against the respondent-accused, the complainant has examined himself as PW-1 and PW-2 - witness, namely, Maheshbhai Vijaybhai Dhamoriya, the Collection Manager. In addition to the above evidence, the complainant has also produced the power-of-attorney dated 01.10.2018, cheque, return memo, demand notice, statement of accounts etc. On filing the closing pursis, the statement under Section 313 of the Code of Criminal Procedure was recorded wherein, the complainant had denied the allegation and submitted that the vehicle for which, the loan was taken from the complainant-company, was seized and it was auctioned. The complainant was not informed with regard to the procedure of auction neither informed with regard to the price which was received and by suppressing the said fact, false complaint came to be filed by the complainant. The complainant was not informed with regard to the procedure of auction neither informed with regard to the price which was received and by suppressing the said fact, false complaint came to be filed by the complainant. It is further contended in the statement that the security cheque which was lying with the complainant was misused and, therefore, the complainant is not liable to pay the cheque amount. Considering the evidence placed on record and the submissions advanced by the learned advocates for the respective parties, the learned trial Court has acquitted the respondent-accused from the charges, which is impugned before this Court. 4. Heard learned advocate Mr. Manish Patel for the appellant-complainant and as this matter has been decided at the admission stage finally, no notice was issued to the respondents. 5. Learned advocate Mr. Patel for the appellant-original complainant submits that though the respondent failed to discharge his onus to rebut the presumption which is in favour of the complainant under Section 139 of the Negotiable Instruments Act, the learned trial Court has acquitted the respondent-accused only on the ground that the complainant fails to prove the legally enforceable debt towards the respondent-accused. The learned advocate submits that the loan statement which was produced below Exh.25 by the complainant reveals that after availing the loan facility, the default was committed by the respondent-accused and the cheque which was given to discharge the liability, was dishonoured and though the said loan statement was not rebutted by the respondent-accused either during the cross-examination or by leading the evidence which may be in the standard of preponderance of probability, the judgment and order of acquittal was passed by the learned trial Court. The learned advocate submits that from the loan agreement, which was produced below Exh.31, reveals that the amount was sanctioned in favour of the respondent-accused and all the terms were agreed by the respondent-accused while availing the loan facility and without disputing the signature on the same by the accused, the learned trial Court has discarded this evidence and passed the judgment and order of acquittal which is bad in law and, therefore, the learned advocate submits that the judgment and order of acquittal is required to be interfered with and the respondent-accused is required to be punished accordingly. 6. 6. Considering the submissions made by the learned advocate for the complainant, the provisions of the Negotiable Instruments Act are required to be bare in mind. Sections 118, 138 and 139 of the Negotiable Instruments Act 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. 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. 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. (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. Considering the above provisions, what is the presumption, is required to be considered first. Considering the above provisions, what is the presumption, is required to be considered first. As per the law laid down by the Hon’ble Apex Court in the case of M.S. Narayana Menon vs. State of Kerala, (2006) 6 SCC 39 , the presumption is defined as under: “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. Now, keeping in mind the above position, if the case of the complainant is examined, then it is averred in the complaint that the loan facility was taken by the accused for the amount of Rs. 7,10,000/- on 12.10.2017. Now, keeping in mind the above position, if the case of the complainant is examined, then it is averred in the complaint that the loan facility was taken by the accused for the amount of Rs. 7,10,000/- on 12.10.2017. Certain amounts were agreed towards the charges as well as the installment and the respondent-accused failed to pay the said amount, therefore, the vehicle of the respondent-accused for which, the loan was given, was seized and auctioned and on deducting the auction amount, the total due remained to be paid by the respondent-accused comes to Rs. 12,08,810.69. For the part payment of the aforesaid amount, cheque bearing no. 009402 dated 22.01.2022 was issued for the amount of Rs. 7,10,000/- in favour of the complainant. On depositing the same, it was returned with an endorsement “insufficient fund” and, therefore, the private complaint came to be filed before the learned trial Court. 9. To rebut the presumption which is in favour of the complainant, the complainant was cross-examined by the respondent-accused wherein, the complainant has admitted that the loan amount is of Rs. 7,10,000/-. The vehicle which was involved in the offence is of TATA L.P.D. truck. There was no any document produced with regard to the loan before the learned trial Court. Neither any amount which is paid by the respondent-accused nor the amount which is due, is mentioned in the complaint. The complainant states that the statement of accounts is produced to show that what amount remaines to be paid. As per the loan statement, the amount of Rs. 20,22,924/- is still to be paid. What was the interest amount is not in the knowledge of the complainant. On perusing the statement of account below Exh.25, the amount which is paid by the accused, was of Rs. 4,50,000/-. The approximate value of the vehicle is around Rs. 20 lacs. The respondent-accused at his own, has handed over the vehicle to the complainant-company. There was no any agreement to show that the respondent-accused has handed over the vehicle at his own. By auction, the amount of Rs. 3,60,000/- was recovered. Before selling through the auction, notice to the original owner is required to be given. Whether any notice was issued to the complainant or not, was not in the knowledge of the complainant. There was no any agreement to show that the respondent-accused has handed over the vehicle at his own. By auction, the amount of Rs. 3,60,000/- was recovered. Before selling through the auction, notice to the original owner is required to be given. Whether any notice was issued to the complainant or not, was not in the knowledge of the complainant. At the time of sanctioning the loan, the papers like R.C. book, light bill, 7/12 extracts and papers relating to the vehicle are required to be taken. The complainant is the resident of Madhya Pradesh and the disputed cheque is CTS cheque. 10. One more witness, who was examined by the complainant, namely, Maheshbhai Vijaybhai Dhamoriya below Exh.30, is the Collection Manager. From his evidence, it reveals that the amount of Rs. 3,50,000/- was paid by the respondent-accused towards the installment and Rs. 4,50,000/- was recovered from the auction of the vehicle. The value of the vehicle would be around Rs. 20 lacs. Before selling the vehicle, the notice was issued to the complainant however, no any notice was produced on record to support this statement. It is denied that the possession of the said vehicle was taken forcefully by the complainant. 11. The respondent-accused has filed an affidavit with regard to the vehicle below Exh.12 wherein, it is mentioned that at the time of sanctioning the loan, three blank cheques were taken by the complainant-company and after purchasing the vehicle, due to sickness and financial crunch, three installments were lapsed and, therefore, without issuing any notice, the possession of the vehicle was taken on 31.03.2019 and it was sold by way of auction however, no any information was given with regard to the amount which was recovered in the auction. Even thereafter also, the complainant came and recovered the amount of Rs. 80,000/- from the respondent-accused and as per the affidavit filed by the respondent-accused, no any amount is remained to have been paid. Though it is admitted by the complainant that the loan which was sanctioned was of Rs. 7,10,000/- against which, the installment amount of Rs. 3,50,000/- was paid and in addition to that, the recovery by way of auction was also made for the amount of Rs. 4,50,000/- and still the impugned complaint filed for the cheque which was dishonoured of Rs. 7,10,000/-. 7,10,000/- against which, the installment amount of Rs. 3,50,000/- was paid and in addition to that, the recovery by way of auction was also made for the amount of Rs. 4,50,000/- and still the impugned complaint filed for the cheque which was dishonoured of Rs. 7,10,000/-. From the record, more particularly, from the hypothication-cum-loan agreement below Exh.31, it transpires that the said agreement was executed between the parties on 12.10.2017 for purchase of the vehicle. The details of the vehicle are mentioned herein-below: Asset Registration No. Engine No. Chassis No. Others TATA LPT 2518 CUMMINS FBT MP09 HG 7272 B591803111 B62989222 MAT 448030 B7B07036 -- 12. As per the terms, the post dated cheques have been issued by the borrower in favour of the lender towards the amount due and in that agreement Exh.31, Article 13 mentions with regard to the events of default. 13. The following events shall constitute the event of default: “13.1. The Borrower and the Guarantor failing to repay the loan or any fee, charges in the manner herein contained and any one of the installments or any other amount due hereunder remains unpaid after the date on which it is due. 13.2. The Borrower or the Guarantor (in case of being an individual) dies or takes any step(s) with a view to his being made insolvent in any jurisdiction or with a view to the appointment of a receiver, trustee or similar officer of any of his assets. 13.3. If the Borrower and the Guarantor (in case of being a corporate body or a partnership firm) take any action or other steps are taken or legal proceedings are initiated by any third party against the Borrower/Guarantor for winding up, dissolution or reorganization or for the appointment of a receiver, trustee or similar officer on its assets, particularly on the hypothecated assets. 13.4. If the Borrower and the Guarantor sell, encumber or transfer or seek to sell, transfer, create encumbrance on the hypothecated Asset in any manner whatsoever without the express consent in writing of the Lender. 13.5. The Borrower and the Guarantor fail to pay any insurance premium for the hypothecated Asset or the bank charges for dishonoured PDCS/ECS in accordance with the terms and conditions hereof. 13.6. The hypothecated Asset being confiscated, attached, taken into custody by any authority or is subjected to any execution proceedings. 13.7. 13.5. The Borrower and the Guarantor fail to pay any insurance premium for the hypothecated Asset or the bank charges for dishonoured PDCS/ECS in accordance with the terms and conditions hereof. 13.6. The hypothecated Asset being confiscated, attached, taken into custody by any authority or is subjected to any execution proceedings. 13.7. The Borrower and the Guarantor failing to pay any tax, impost, duty or other imposition or to comply with any other formalities required to be completed in respect of the hypothecated Asset under law from time to time. 13.8. The hypothecated Asset being stolen is untraceable for any reason whatsoever; or 13.9. The Assets is distrained, endangered or damaged in any manner or rendered unfit for use or bodily injury is caused to the third party by accident with the Asset. 13.10. Any of the PDCs/ECS delivered or to be delivered by the Borrower and/or the Guarantor to the Lender in terms and conditions hereof is not honoured for any reason whatsoever on presentation. 13.11. Any instruction being given by the Borrower and the Guarantor for stop payment of any PDCs/ECS given as per Article 2.7, for any reason whatsoever. 13.12. The Borrower failing to supply a copy of the registration certificate of the Asset being the vehicle with hypothecation endorsement in favour of the lender. 13.13. Any circumstance arises which gives reasonable grounds in the opinion of the Lender that it is likely to prejudice or endanger the hypothecated Asset or the interest of the Lender therein or under this Agreement. 13.14. The Borrower and the Guarantor failing to file the particulars of the Asset as provided in the Agreement. 13.15. The Borrower and the Guarantor committing breach of any of the terms, covenants, undertakings and conditions herein contained or any information given or representations made by the Borrower and the Guarantor to the Lender under this Agreement or any other document submitted by the Borrower and the Guarantor being found to be inaccurate or misleading. 13.16. There exists any other circumstance, which in the sole opinion of the Lender, jeopardizes the Lender’s interest. 13.17. The Borrower and the Guarantor being declared insolvent, bankrupt or (in case of company any winding up or liquidation proceedings being filed against the Borrower and the Guarantor). 13.18. 13.16. There exists any other circumstance, which in the sole opinion of the Lender, jeopardizes the Lender’s interest. 13.17. The Borrower and the Guarantor being declared insolvent, bankrupt or (in case of company any winding up or liquidation proceedings being filed against the Borrower and the Guarantor). 13.18. Any default being committed by the Borrower and the Guarantor in discharging his liabilities under any other Agreement entered into between the Lender and the Borrower and the Guarantor; in any capacity.” 14. The said agreement was signed by the complainant-company and the respondent- accused. On admitting the fact that the vehicle was repossessed by the company and was sold to the other person by way of auction, it comes on record that the agreement which was executed comes to an end. Therefore, the basic ingredients for the complaint under Section 138 of the Negotiable Instruments act that the cheque ought to have been issued for discharge in whole or in part of any debt or other liabilities, which are legally enforceable, do not satisfy. 15. On the date, when the cheque was issued, the vehicle was already repossessed by the finance company and was sold to third party. The hire purchase agreement between the owner and hirer stood determined by the act of parties, the cheque accepted by the owner in advance for repayment of hire would become instrument without consideration as the consideration has failed. In such circumstances, the remedy available to the owner is to realize the balance hire due from hirer by filing suit for damages for the breach of agreement. 16. This Court has gone through the decision rendered by the Kerala High Court in the case of Sudha Beevi vs. State of Kerala, (2004) Cri. L.J. 3418. The relevant paragraph is reproduced herein-below: “8.1 The Kerala High Court in case of Sudha Beevi vs. State of Kerala (supra), raised a short question to the effect that, whether postdated Cheques issued by the hirer at the time of execution of the agreement continue to remain as valid instruments supported by consideration once the agreement gets determined ipso facto? While giving the meaning of consideration, it was observed that consideration is sine quo non for any legally enforceable contract. The facts of the case, as observed in the case of Sudha Beevi (supra) revealed that Cheque was presented for encashment after the vehicle was seized by the complainant. While giving the meaning of consideration, it was observed that consideration is sine quo non for any legally enforceable contract. The facts of the case, as observed in the case of Sudha Beevi (supra) revealed that Cheque was presented for encashment after the vehicle was seized by the complainant. It is was observed that, going by the terms of agreement, it stood “determined ipso facto” on default of the hirer to pay the installments and also on seizure of the vehicle by the owner. The remedy available to the owner would be in accordance to the terms and conditions decided. Thus, the Court thereby laid down that once financial institution/owner exercised option of seizure of the vehicle, the postdated Cheques obtained from the hirer cannot be presented for encashment after the seizure. Though, the owner has to take recourse to other legal remedies for recovery of the balance amount, if any, when the vehicle is sold subsequently, the owner can recover the balance amount after adjusting the sale proceeds of the vehicle.” 17. The act of repossessing the vehicle has determined the agreement and, therefore, the cheque in the hands of the company would be an instrument without consideration. The cheque which was accepted by the company towards the advance of the repayment would become an instrument for which, the consideration has failed and, therefore, the demand of cheque money by way of legal notice as provided under Section 138 of the Negotiable Instrument Act would also lose its shine as it would not be for legally enforceable debt or liability. Therefore, the learned trial Court has rightly acquitted the respondent-accused from the charges and interference is required to be called for. 18. This being a criminal appeal, as per the law laid down by the Apex Court in case of Chandrappa and Others vs. State of Karnataka, (2007) 4 SCC 415 wherein the general principles were laid down regarding the powers of the Appellate Court while dealing with the appeal against an order of the acquittal, which are reproduced herein-below: “(1) An appellate Court has full power to review, re-appreciate and reconsider the evidence upon which the order of acquittal is founded. (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 emphasize 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 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.” 19. Resultantly, present appeal fails and the impugned judgment and order dated 05.04.2023 passed by the learned 2nd Additional Judicial Magistrate First Class and Civil Judge, Dahod in Criminal Case No. 1056 of 2022 is hereby confirmed. 20. Record and Proceedings be sent back to the concerned learned trial Court.