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Gujarat High Court · body

2025 DIGILAW 959 (GUJ)

Mas Financial Sevices Ltd. v. State of Gujarat

2025-09-02

S.V.PINTO

body2025
JUDGMENT : S.V. PINTO, J. 1. The present appeal is filed by the appellant – original complainant under Section 378 (4) of the Code of Criminal Procedure, 1973 against the judgment and order of acquittal passed by the learned 2 nd Additional Chief Judicial Magistrate, Rajkot (hereinafter referred to as the “learned Trial Court”) in Criminal Case No. 9924 of 2016 on 18.04.2016, whereby the respondent No. 2 - original accused came to be acquitted from the offence under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ‘the NI Act”). 1.1 The parties are hereinafter referred to as “the complainant” and “the accused” as they 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 appeal as well as the impugned judgment and order and paper book filed by the complainant are as under: 2.1. The complainant company is in the business of finance and the accused had taken a loan from the complainant company by executing a loan agreement. As per the agreement, the accused had to pay regular installments, but the same were not paid and when the accounts were settled, the accused gave cheque No.798825 dated 07.09.2006 for Rs.45,759/- from his account with The Citizens Cooperative Bank. The cheque was deposited in the bank of the complainant for clearing, but the same returned unpaid on 12.09.2006 with the endorsement “Account Closed”. The complainant gave the statutory demand notice through his advocate on 28.09.2006 which was duly served on 29.09.2006, but the accused did not repay the amount within the stipulated period, and hence, the complainant filed a complaint under Section 138 of the Act before the Court of the Chief Judicial Magistrate, Rajkot. At the end of the trial, the learned trial court, by a judgment and order dated 01.08.2012 was pleased to convict the accused and sentence him to simple imprisonment for one year and to pay an amount of Rs.67,000/- as compensation to the complainant after the appeal period was over. 2.2 The accused preferred Criminal Appeal No.85 of 2012 before the Sessions Court, Rajkot, which was allowed and by a judgment and order dated 30.04.2013, the learned Sessions Court set aside the judgement and order of conviction and was pleased to remand the matter back to the learned trial court for retrial. 2.3. 2.2 The accused preferred Criminal Appeal No.85 of 2012 before the Sessions Court, Rajkot, which was allowed and by a judgment and order dated 30.04.2013, the learned Sessions Court set aside the judgement and order of conviction and was pleased to remand the matter back to the learned trial court for retrial. 2.3. Pursuant to the order of remand by the learned Sessions Court, Rajkot, the accused was duly served with the summons and appeared before the learned Trial Court and his plea was recorded at Exhibit 61 and the evidence of the complainant was taken on record. The complainant was examined on oath and 08 documentary evidences were produced in support of his case. 2.3. After the closing pursis was filed by the complainant, the further statement of the accused under Section 313 of the Code of Criminal Procedure was recorded, wherein the accused stated that the facts in examination in chief and in the complaint are false and a false complaint has been filed. The accused refused to step into the witness box and did not lead any documentary evidences in his defence and after the arguments of the learned advocates for both the parties were heard, by the impugned judgment and order, the learned Trial Court acquitted the accused from the offence under Section 138 of the Act. 3. Being aggrieved and dissatisfied with the same, the complainant has preferred the present appeal mainly stating that the learned Trial Court has not properly interpreted the evidence and has misread the evidence and the impugned judgment and order is perverse, erroneous and contrary to law. 4. Heard learned Advocate Mr.Tirth Nayak appearing for the appellant and learned APP Mr.Pranav Dhagat for the respondent – State. Though served the respondent No.02 has not appeared either in person or through an advocate. Perused the impugned judgment and order of acquittal and have re- appreciated the entire evidence of the prosecution on record of the case. 5. Learned Advocate Mr.Tirth Nayak for the appellant has taken this Court through the entire evidence produced by the prosecution and has vehemently argued that the learned Trial Court has not appreciated the evidence properly and the complainant has produced cogent evidence to prove the case and has successfully proved the case against the accused but the learned Trial Court has not considered the same and has acquitted the accused. The judgment and order of acquittal passed by the learned Trial Court is contrary to law, evidence on record and principles of justice. The judgment and order of acquittal passed by the learned Trial Court is based on inferences, not warranted by facts of the case and also on presumption, not permitted by law. Learned Advocate has urged this Court to quash and set aside the impugned judgment and order of acquittal and find the accused guilty for the said offence. Learned Advocate has urged this Court to allow the present appeal and impose proper sentence on the accused. 6. Learned APP Mr. Pranav Dhagat for the respondent – State has submitted that the learned Trial Court has appreciated all the evidence in true perspective and has not committed any error in acquitting the accused. Therefore, no interference of this Court is required in the impugned judgement and the order of acquittal passed by the learned Trial Court and have urged this Court to reject the appeal. 7 At the outset, before discussing the facts of the present case, it would be appropriate to refer to the observations of the Apex Court regarding scope of interference in acquittal appeals in the case of Constable 907 Surendra Singh & Anr. Vs. State of Uttarakhand, 2025 0 INSC 1 14 the Apex Court has observed in Para 11 and 12 as under: “11. Recently, in the case of Babu Sahebagouda Rudragoudar and others v. State of Karnataka, (2024) 8 SCC 149 a Bench of this Court to which one of us was a Member (B.R. Gavai, J.) had an occasion to consider the legal position with regard to the scope of interference in an appeal against acquittal. It was observed thus: 38. First of all, we would like to reiterate the principles laid down by this Court governing the scope of interference by the High Court in an appeal filed by the State for challenging acquittal of the accused recorded by the trial court. 39. This Court in Rajesh Prasad v. State of Bihar, (2022) 3 SCC 471 : (2022) 2 SCC (Cri) 31 encapsulated the legal position covering the field after considering various earlier judgments and held as below : (SCC pp. 482-83, para 29) “29. 39. This Court in Rajesh Prasad v. State of Bihar, (2022) 3 SCC 471 : (2022) 2 SCC (Cri) 31 encapsulated the legal position covering the field after considering various earlier judgments and held as below : (SCC pp. 482-83, para 29) “29. After referring to a catena of judgments, this Court culled out the following general principles regarding the powers of the appellate court while dealing with an appeal against an order of acquittal in the following words : [Chandrappa v. State of Karnataka, (2007) 4 SCC 415 : (2007) 2 SCC (Cri) 325, SCC p. 432, para 42] 42. From the above decisions, in our considered view, the following general principles regarding powers of the appellate court while dealing with an appeal against an order of acquittal emerge: (1) An appellate court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded. (2) The Criminal Procedure Code, 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 emphasise 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 is 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. (5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial court.’ ” 40. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial court. (5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial court.’ ” 40. Further, in H.D. Sundara v. State of Karnataka, (2023) 9 SCC 581 : (2023) 3 SCC (Cri) 748 this Court summarised the principles governing the exercise of appellate jurisdiction while dealing with Page No. 6 of 9 an appeal against acquittal under Section 378 CrPC as follows : (SCC p. 584, para 8) 8. XXX XXX XXX 8.1. The acquittal of the accused further strengthens the presumption of innocence; 8.2. The appellate court, while hearing an appeal against acquittal, is entitled to reappreciate the oral and documentary evidence; 8.3. The appellate court, while deciding an appeal against acquittal, after reappreciating the evidence, is required to consider whether the view taken by the trial court is a possible view which could have been taken on the basis of the evidence on record; 8.4. If the view taken is a possible view, the appellate court cannot overturn the order of acquittal on the ground that another view was also possible; and 8.5. The appellate court can interfere with the order of acquittal only if it comes to a finding that the only conclusion which can be recorded on the basis of the evidence on record was that the guilt of the accused was proved beyond a reasonable doubt and no other conclusion was possible.” 41. Thus, it is beyond the pale of doubt that the scope of interference by an appellate court for reversing the judgment of acquittal recorded by the trial court in favour of the accused has to be exercised within the four corners of the following principles: 41.1. That the judgment of acquittal suffers from patent perversity; 41.2. That the same is based on a misreading/omission to consider material evidence on record; and 41.3. That no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.” 12. That the judgment of acquittal suffers from patent perversity; 41.2. That the same is based on a misreading/omission to consider material evidence on record; and 41.3. That no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.” 12. It could thus be seen that it is a settled legal position that the interference with the finding of acquittal recorded by the learned trial judge would be warranted by the High Court only if the judgment of acquittal suffers from patent perversity; that the same is based on a misreading/omission to consider material evidence on record and that no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.” 8. In light of the above it is a settled principle of law that in an appeal against acquittal, the Appellate Court is circumscribed by limitation that no interference has to be made in the order of acquittal unless after appreciation of the evidence produced before the learned Trial Court, it appears that there are some manifest illegality or perversity which could not have been possibly arrived at by the Court. It is also a settled principle that there is no embargo on the Appellate Court to review the evidence but, generally the order of acquittal shall not be interfered with as the presumption of innocence of the accused is further strengthened by the order of acquittal. The golden thread which runs through the web of administration of justice in criminal cases is that if two views are possible on the evidence adduced in the case of the prosecution i.e. (i) guilt of the accused and (ii) his innocence, the view, which is in favour of the accused, should be adopted, and if the trial Court has taken the view in favour of the accused, the Appellate Court should not disturb the findings of the acquittal. The Appellate Court can interfere with the judgment and order of acquittal only when there are compelling and substantial reasons and the order is clearly unreasonable and where the Appellate Court comes to conclusion that based on the evidence, conviction is a must. 9. The Appellate Court can interfere with the judgment and order of acquittal only when there are compelling and substantial reasons and the order is clearly unreasonable and where the Appellate Court comes to conclusion that based on the evidence, conviction is a must. 9. In light of the above settled principles of law in acquittal appeals the evidence of the complainant on record is appreciated and the examination in chief of the complainant is produced at exhibit 94 wherein the complainant has stated that a loan was taken by the accused and the statement of loan account is produced at exhibit 73 which shows that the accused had taken a loan of Rs.26,000/- which was to be repaid in 24 installments of Rs.2,525/- each with interest at the rate of 16.50% per year. As far as the question of authority of the complainant is concerned, from the record of the case, it appears that the complaint was originally filed by Rohit Babubhai Vyas on behalf of the complainant company and thereafter as the head office of the company was shifted to Ahmedabad, an application at Ehx.31 was preferred and Nilesh Dalpatbhai Nayak was permitted to conduct the complaint. Resolution of the company stating that Nilesh Dalpatbhai Nayak was authorised to conduct the complaint is produced at Exh.32. Thereafter, by an order passed below Exh.92 Rohitbhai Muljibhai Dhonia was permitted to conduct the matter instead of Nileshbhai Dalpatbhai Nayak and the said Rohitbhai Muljibhai Dhonia has filed his affidavit of examination in chief at Exh.94. The photocopies of the authorisation letter and resolution have been produced at Mark 92/1 and Mark 92/2, respectively, but no original documents have been produced, and the documents have not been referred to in the examination in chief of Rohitbhai Muljibhai Dhonia and there is no authorisation for Rohitbhai Muljibhai Dhonia on record. Moreover, the said Rohitbhai Muljibhai Dhonia did not have any knowledge about the transaction with the accused. 10. The Apex Court in the case of M/s Naresh Potteries Vs. M/s Aarti Industries and Anr. 2025 0 INSC 1 has observed in Para 19 as under. “19. After discussing the discretionary powers of the Magistrate, this Court went on to hold that the power of attorney holder may be allowed to file, appear and depose for the purpose of issue of process for the offence punishable under Section 138 of the NI Act. 2025 0 INSC 1 has observed in Para 19 as under. “19. After discussing the discretionary powers of the Magistrate, this Court went on to hold that the power of attorney holder may be allowed to file, appear and depose for the purpose of issue of process for the offence punishable under Section 138 of the NI Act. This Court, however, cautioned that an exception to the above would be when the power-of-attorney holder does not have a personal knowledge about the transactions, in which case, he cannot be examined. Nevertheless, this Court clarified that where the power-of- attorney holder of the complainant is in charge of the business of the complainant payee and the power of attorney holder alone is personally aware of the transactions, there is no reason why he cannot depose as a witness, however, such personal knowledge must be explicitly asserted in the complaint and a power- of-attorney holder who has no personal knowledge of the transactions cannot be examined as a witness in the case.” 11. In light of the above settled principles of law in cases under the N.I. Act on minute appreciation of the evidence before the learned Trial Court as discussed above the learned Trial Court has appreciated that the said Rohitbhai Muljibhai Dhonia did not have the proper authorization for conducting the matter and did not have personal knowledge about the transaction, and there was no document on record to show that Rohitbhai Muljibhai Dhonia was authorized to appear on behalf of the complainant company. As per observation of Apex Court in the case of M/s Naresh Potteries (supra) the authorized power of attorney can file and proceed with the case if he has knowledge of transaction but in this case, the legal officer who has deposed had no personal knowledge about the transaction and he can not be examined as a witness. Moreover, there is no cogent and reliable evidence to show the legally recoverable debt of the cheque amount on the date of issuance of the cheque. 11.1 The learned Trial Court has appreciated the entire evidence in proper perspective and there does not appear to be any infirmity and illegality in the impugned judgment and order of acquittal. Moreover, there is no cogent and reliable evidence to show the legally recoverable debt of the cheque amount on the date of issuance of the cheque. 11.1 The learned Trial Court has appreciated the entire evidence in proper perspective and there does not appear to be any infirmity and illegality in the impugned judgment and order of acquittal. The learned Trial Court has appreciated all the evidence and this Court is of the considered opinion that the learned Trial Court was completely justified in acquitting the accused of the offence leveled against him. The findings recorded by the learned Trial Court are absolutely just and proper and no illegality or infirmity has been committed by the learned trial Court and this Court is in complete agreement with the findings, ultimate conclusion and the resultant order of acquittal recorded by the learned Trial Court. This Court finds no reason to interfere with the impugned judgment and order and the present appeal is devoid of merits and resultantly, the same is dismissed. 12. The impugned judgment and the order dated 18.04.2016 passed by the learned Chief Judicial Magistrate, Rajkot in Criminal Case No. 9924 of 2016 is hereby confirmed. 13. Bail bond stands cancelled. Record and proceedings be sent back to the concerned Trial Court forthwith.