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Gujarat High Court · body

2025 DIGILAW 25 (GUJ)

Dineshkumar Govindbhai Jethva v. State of Gujarat

2025-01-17

S.V.PINTO

body2025
ORDER : 1. The present application is filed by the applicant – original complainant under Section 378(4) of the Code of Criminal Procedure, 1973 (for short “Cr.P.C.”) seeking leave to file an appeal against the judgment and order dated 27.04.2023 passed by the learned Chief Judicial Magistrate, Rajkot in Criminal Case No. 22402 of 2020, whereby the original accused – respondent No.2 herein came to be acquitted from the charge levelled against him under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ‘the Act”). The respondent No.2 is hereinafter referred to as “the accused” as he stood in the original case for the sake of convenience, clarity and brevity. 2. The brief facts culled out from the memo of the present application as well as the impugned judgment and order and paper book filed by the applicant are as under : 2.1 The applicant had filed a complaint against the accused under Section 138 of the N.I.Act, as they both were having good relations, and the accused had taken a loan of Rs.15,00,000/- for development of his business, giving assurance and trust to return the amount within one year, in the month of July 2017. When the time limit was completed, the applicant demanded the amount and the accused sought for further time to repay the same and the accused issued Cheque No. 436647, dated 05.10.2020 for Rs.15.00,000/- of Rajkot Nagarik Sahakari Bank Ltd., Kalavad Road Branch, Rajkot, assuring that the cheque would be cleared, when deposited. The cheque was deposited by the applicant in his account with State Bank of India, Jagnath Plot Branch, Rajkot, but, the cheque returned on 06.10.2020 with the endorsement "Funds Insufficient". The applicant gave the statutory legal notice through his advocate on 27/10/2020, which was duly served to the accused, and the accused refused to repay the amount and gave a false and fabricated answer to the notice. As the accused had committed the offence under Section 138 of the Act, the complaint had been filed before learned Chief Judicial Magistrate, Rajkot. 2.2 The accused was served with the summons and appeared before the learned Trial Court and his plea was recorded at Exhibit-09 and the evidence of the applicant was taken on record. As the accused had committed the offence under Section 138 of the Act, the complaint had been filed before learned Chief Judicial Magistrate, Rajkot. 2.2 The accused was served with the summons and appeared before the learned Trial Court and his plea was recorded at Exhibit-09 and the evidence of the applicant was taken on record. The applicant was examined on oath and 06 documentary evidences were produced in support of his case and after the closing pursis was filed, the further statement of the accused under Section 313 of the Code of Criminal Procedure was recorded, wherein, the accused stated that there were no dues but the cheque was misused by the applicant. The arguments of the advocates for both the parties were heard and by impugned judgment and order, the learned Trial Court acquitted the accused from theoffence under Section 138 of the N.I.Act. 3. Being aggrieved and dissatisfied with the same, the applicant has preferred the present application seeking leave to appeal mainly stating that the learned Trial Court has not properly interpreted the evidence and has misread the evidence and the impugned judgment is perverse, erroneous and contrary to law. 4. Heard learned advocate Mr. H. J. Karathiya appearing for the applicant and learned APP Ms. Jirga Jhaveri for the respondent – State. 5. Learned Advocate Mr. H.J. Karathiya for the applicant has submitted that there is a statutory presumption under Section 139 of the Negotiable Instrument Act which is not rebutted by the respondent No. 2, and it is established by the applicant that the cheque in question was issued for the legally enforceable debt. The respondent No. 2 has not put forward any explanation with regard to the issuance of the cheque and he has not disputed his signature as well as handwriting on the cheque and the offence under Section 138 of the Negotiable Instruments Act is made out. The presumption under Section 139 is mandatory and not a discretionary presumption and it raises an obligation on the Court to raise a statutory mandatory presumption in favour of the complainant that the cheque was issued against the existing debt or liability and this presumption is required to be demolished by the accused with cogent evidence, and unless and until the same is demolished, it cannot be said that the accused has discharged his burden successfully. Learned Advocate further submits that the learned Trial Court has not raised the presumption in favour of the complainant and the impugned judgement and order of acquittal is required to be quashed and set aside. 6. Learned APP Ms Jirga Jhaveri for the respondent No. 1 State has submitted that the learned Trial Court has appreciated all the documentary evidence in proper perspective and it is settled law that the accused is required to rebut the presumption and raise a probable defence and the standard of proof for doing so is to the extent of ‘preponderance of probabilities’ and the accused is not required to prove his defence, leading cogent evidence or beyond reasonable doubts. The learned Trial Court has considered all the documents and the law, and also the cross examination of the applicant and has passed the impugned judgement and order and no interference is required. 7. With regard to the facts in the present case, it would be fit to refer to the observations made the Apex Court in Rangappa vs Sri Mohan reported in (2010) 11 SCC 441 in para 14 as under. “14. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. 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. 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. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard of proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of ‘preponderance of probabilities. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.” 7.1 The Apex Court in the case of Tedhi Singh vs Narayan Dass Mahant reported in (2022) 6 SCC 735 has observed as under in Para 7 as under: “7. It is true that this is a case under Section 138 of the Negotiable Instruments Act. Section 139 of the N.I. Act provides that Court shall presume 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. This presumption, however, is expressly made subject to the position being proved to the contrary. In other words, it is open to the accused to establish that there is no consideration received. It is in the context of this provision that the theory of ‘probable defence’ has grown. This presumption, however, is expressly made subject to the position being proved to the contrary. In other words, it is open to the accused to establish that there is no consideration received. It is in the context of this provision that the theory of ‘probable defence’ has grown. In an earlier judgment, in fact, which has also been adverted to in Basalingappa (supra), this Court notes that Section 139 of the N.I. Act is an example of reverse onus [see (2010) 11 SCC 441 ). It is also true that this Court has found that the accused is not expected to discharge an unduly high standard of proof. It is accordingly that the principle has developed that all which the accused needs to establish is a probable defence. As to whether a probable defence has been established is a matter to be decided on the facts of each case on the conspectus of evidence and circumstances that exist. “ 7.2 The Apex Court in the case of Vijay vs Laxman & Another reported in (2013) 3 SCC 86 has observed in Para 13-15 as under: “13. Applying the ratio of the aforesaid case as also the case of K.N. Beena vs. Muniyappan And Anr. (supra), when we examine the facts of this case, we have noticed that although the respondent might have failed to discharge the burden that the cheque which the respondent had issued was not signed by him, yet there appears to be a glaring loophole in the case of the complainant who failed to establish that the cheque in fact had been issued by the respondent towards repayment of personal loan since the complaint was lodged by the complainant without even specifying the date on which the loan was advanced nor the complaint indicates the date of its lodgment as the date column indicates ‘nil’ although as per the complainant’s own story, the respondent had assured the complainant that he will return the money within two months for which he had issued a post-dated cheque No.119582 dated 14.8.2007 amounting to Rs.1,15,000/- drawn on Vikramaditya Nagrik Sahkari Bank Ltd., Ujjain. Further case of the complainant is that when the cheque was presented in the bank on 14.8.2007 for getting it deposited in his savings account No.1368 in Vikarmaditya Nagrik Sahkari Bank Ltd. Fazalpura, Ujjain, the said cheque was returned being dishonored by the bank with a note ‘insufficient amount’ on 14.8.2007. In the first place, the respondent accused is alleged to have issued a post-dated cheque dated 14.8.2007 but the complainant/appellant has conveniently omitted to mention the date on which the loan was advanced which is fatal to the complainant’s case as from this vital omission it can reasonably be inferred that the cheque was issued on 14.8.2007 and was meant to be encashed at a later date within two months from the date of issuance which was 14.8.2007. But it is evident that the cheque was presented before the bank on the date of issuance itself which was 14.8.2007 and on the same date i.e. 14.8.2007, a written memo was received by the complainant indicating insufficient fund. In the first place if the cheque was towards repayment of the loan amount, the same was clearly meant to be encashed at a later date within two months or at least a little later than the date on which the cheque was issued: If the cheque was issued towards repayment of loan it is beyond comprehension as to why the cheque was presented by the complainant on the same date when it was issued and the complainant was also lodged without specifying on which date the amount of loan was advanced as also the date on which compliant was lodged as the date is conveniently missing. Under the background that just one day prior to14.8.2007 i.e. 13.8.2007 an altercation had taken place between the respondent accused and the complainant- dairy owner for which a case also had been lodged by the respondent-accused against the complainant’s father/dairy owner, missing of the date on which loan was advanced and the date on which complaint was lodged, casts a serious doubt on the complainant’s plea. It is, therefore, difficult to appreciate as to why the cheque which even as per the case of the complainant was towards repayment of loan which was meant to be encashed within two months, was deposited on the date of issuance itself. It is, therefore, difficult to appreciate as to why the cheque which even as per the case of the complainant was towards repayment of loan which was meant to be encashed within two months, was deposited on the date of issuance itself. The complainant thus has miserably failed to prove his case that the cheque was issued towards discharge of a lawful debt and it was meant to be encashed on the same date when it was issued specially when the complainant has failed to disclose the date on which the alleged amount was advanced to the Respondent/Accused. There are thus glaring Downloaded oninconsistencies indicating gaping hole in the complainant’s version that the cheque although had been issued, the same was also meant to be encashed instantly on the same date when it was issued. 14. Thus, we are of the view that although the cheque might have been duly obtained from its lawful owner i.e. the respondent-accused, it was used for unlawful reason as it appears to have been submitted for encashment on a date when it was not meant to be presented as in that event the respondent would have had no reason to ask for a loan from the complainant if he had the capacity to discharge the loan amount on the date when the cheque had been issued. In any event, it leaves the complainant’s case in the realm of grave doubt on which the case of conviction and sentence cannot be sustained. 15. Thus, in the light of the evidence on record indicating grave weaknesses in the complainant’s case, we are of the view that the High Court has rightly set aside the findings recorded by the Courts below and consequently set aside the conviction and sentence since there were glaring inconsistencies in the complainant’s case giving rise to perverse findings resulting into unwarranted conviction and sentence of the respondent. In fact, the trial court as also the first appellate court of facts seems to have missed the important ingredients of Sections 118 (a) and 139 of the N.I. Act which made it incumbent on the courts below to examine the defence evidence of rebuttal as to whether the respondent/accused discharged his burden to disprove the complainant’s case and recorded the finding only on the basis of the complainant’s version. On scrutiny of the evidence which we did to avoid unwarranted conviction and miscarriage of justice, we have found that the High Court has rightly overruled the decision of the courts below which were under challenge as the trial court as also the 1st Appellate Court misdirected itself by ignoring the defence version which succeeded in dislodging the complainant’s case on the strength of convincing evidence and thus discharged the burden envisaged under Sections 118 (a) and 139 of the N.I. Act which although speaks of presumption in favour of the holder of the cheque, it has included the provisos by incorporating the expressions “until the contrary is proved” and “unless the contrary is proved” which are the riders imposed by the Legislature under the aforesaid provisions of Sections 118 and 139 of the N.I. Act as the Legislature chooses to provide adequate safeguards in the Act to protect honest drawers from unnecessary harassment but this does not preclude the person against whom presumption is drawn from rebutting it and proving to the contrary.” 8. In light of the above settled principles of law in the case of referred in the case of Rangappa (supra), Tedhi Singh (supra) and Vijay (supra) and considering the arguments advanced by the learned advocates for the parties and on perusal of the record of the case, the complainant has filed his examination-in-chief at Exh.4 and has stated all the facts as narrated in his complaint. During the cross-examination by the learned advocate for the accused, the complainant has stated that he is owning a footwear shop and his monthly income is Rs.25,000/- and an annual income of Rs.3,00,000/- and he is maintaining a family of six persons from this income. The accused is the Chairman of “Shri Maa Co- operative Credit Society” and he has not mentioned the date when the transaction has taken place in his complaint. That he keeps handwritten accounts and gives the accounts to his Chartered Accountant to file his returns, but he has no documentary evidence to show that he had an amount of Rs.15,00,000/- in the month of July 2017. That he keeps handwritten accounts and gives the accounts to his Chartered Accountant to file his returns, but he has no documentary evidence to show that he had an amount of Rs.15,00,000/- in the month of July 2017. The complainant has categorically admitted that he does not have any evidence that he had given the amount of Rs.15,00,000/- to the accused and has admitted that the documents produced at Exhs.17 and 18, which are the registered post acknowledgments of the notice, do not bear the signature of the accused. The complainant has also admitted that he has not shown the transaction in his Income Tax Returns and he had not shown the same in the accounts given to his Chartered Accountant. The complainant has also admitted that he was depositing amounts in “Shri Maa Co-operative Credit Society” and has admitted to the receipts of “Shri Maa Co-operative Credit Society” produced at Exh.24 to Exh.28. Moreover, the learned Trial Court has considered all the documents produced by the complainant and has also considered that the complainant has failed to prove beyond reasonable doubt that the cheque in question was given as repayment of a legal debt. The complainant’s conduct, which has been inconsistent, changing versions and not aligning with the original complaint, has also been considered by the learned Trial Court. 9. The learned Trial Court has relied upon the law laid down by this Court in the case of Maheshbhai Fatelal Patwari V/s. Sureshbhai Lavjibhai Diora (Patel) reported in 2022(0) AIJEL-HC 244146 and in light of the same, has concluded that the complainant has failed to provide documentary evidence of the debt and due to inconsistencies in the complainant's account, the Trial Court found the evidence unreliable and has concluded that the debt wasn't legally enforceable, an essential requirement in such cases. The complainant has not proved the debt beyond reasonable doubt and as there was no legally enforceable debt, the learned Trial court has passed the impugned judgment and order of acquittal, which is just and proper and does not require any interference of this Court. 10. Consequently, in light of the judgment of the Apex Court in the case of Rangappa (supra), Tedhisingh (supra) and Vija (supra), the present application seeking leave to present an appeal under Section 378(4) of the Code of Criminal Procedure fails and is hereby dismissed. 11. Notice stands discharged. 10. Consequently, in light of the judgment of the Apex Court in the case of Rangappa (supra), Tedhisingh (supra) and Vija (supra), the present application seeking leave to present an appeal under Section 378(4) of the Code of Criminal Procedure fails and is hereby dismissed. 11. Notice stands discharged. Record and proceedings if any, be sent back to the trial court forthwith. 12. Since the leave to prefer appeal is rejected, no order is required to be passed in the Criminal Appeal, which is at filing stage and the same stands disposed accordingly.