CR.A/732/2004 1/45 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD CRIMINAL APPEAL No. 732 of 2004 For Approval and Signature: HONOURABLE MR.JUSTICE S.R.BRAHMBHATT ============================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ============================================================== GIRISHBHAI NATVARBHAI PATEL - Appellant Versus STATE OF GUJARAT & 1 - Respondents ============================================================== Appearance : MR BHARGAV N BHATT for Appellant MR KC SHAH, Ld. APP for Respondent No. 1 MR SURESH S PATEL for Respondent No. 2 ================================================================== CORAM : HONOURABLE MR.JUSTICE S.R.BRAHMBHATT Date : 25/11/2005 ORAL JUDGMENT 1.The appellant, i.e. the original complainant has preferred this appeal under section 378 of the Code of CR.A/732/2004 2/45 JUDGMENT Criminal Procedure challenging the order of acquittal dated 12/11/2003 passed by learned 4th JMFC, Navrangpura, Ahmadabad (Rural) in Criminal Case No. 564 of 2001, acquitting the present Respondent no.2 / original accused of the charges under section 138 of Negotiable Instrument Act (hereinafter referred to as the 'Act'). This Court granted leave vide order dated 7/5/2004 (Coram: C.K. Buch, J). 2. The case of the complainant could be summarised as under: The complainant and accused were friends and know each other since long. The complainant was in the construction business at Ahmedabad. The complainant developed 900 sq. meter land in Ahmadabad City, Taluka Ghatlodiya and constructed 8 Row Houses. The Row House No. G/183 was sold to the accused for consideration of Rs.13,61,000=00. As per the understanding between the complainant and accused the payment of consideration i.e. Rs.13,61,000=00 was to be made by the accused and the papers like allotment letter, share certificate, receipt etc. were to be issued in the name of one Devendra Chandulal Bhavsar. According to that CR.A/732/2004 3/45 JUDGMENT understanding between the complainant and the accused all the relevant papers were delivered to the accused along with possession of the Row House No. G/183. The accused also signed an indemnity bond dated 19/8/2000 to this effect. The accused issued following cheques in the name of the complainant; (i)Cheque No: 150124 dated 7/3/2001 for Rs.7,61,000/- drawn on Bank of Baroda, Naranpura Branch, Ahmedabad; (ii)Cheque No.: 150125 dated 2/3/2001 for Rs.6,00,000/- drawn on Bank of Baroda, Naranpura Branch, Ahmedabad. Accused assured the complainant that the said cheques would be duly honoured and complainant will receive the amount mentioned in the cheque. The complainant relying upon the assurance of the accused handed over the possession of papers of Row House No. G/183 to the accused. The complainant thereafter as per the instruction of the accused presented the aforesaid two cheques in CR.A/732/2004 4/45 JUDGMENT his bank, i.e. Kheralu Nagrik Sahkari Bank, Sola Road, Ahmedabad on 5/3/2001 and 8/3/2001. Both the cheques were returned with the endorsement “Funds Insufficient” and “Today's balance insufficient” respectively. The complainant's bank intimated the complainant about return of the cheques with the written memo on 8/3/2001. The complainant thereafter issued a notice through his advocate to the accused calling upon him to make payment of the amount mentioned in the cheques. The notice was issued on 13/3/2001 by registered post and also under the postal certificate. It is the say of the complainant that the notices have been received by the accused on 16/3/2001. The accused did not make the payment against returned cheques. The complainant filed complaint on 16/4/2001 before the competent court of Metropolitan Magistrate, Ahmadabad, which came to be registered as Criminal Case No. 564 of 2001. It is the case of the complainant / appellant that the accused appeared before the Court and asked for an adjournment for settling the matter with complainant on 7/6/2001. It is stated by the appellant that the accused thereafter requested for further adjournment on the ground of settling terms for compromise. The accused submitted a purshish on 24/7/2001 declaring to the CR.A/732/2004 5/45 JUDGMENT trial court that he has already paid an amount of Rs.5,00,000=00 against the cheque amount of Rs.13,61,000=00 and the remaining amount of Rs.8,61,000=00 would be paid to the complainant within a period of 1 ½ months. Thus, this compromise has arrived at between the parties. This purshish was in a nature of declaration as it contains clearly that this is a declaration to the Court duly signed by the accused who was identified by his advocate. 3.It appears from the record that the accused thereafter changed the advocate and filed an application dated 27/9/2001 for cancelling / withdrawing the earlier purshish / declaration at exhibit-9 which was submitted by him on 24/7/2001 on the ground that said purshish / declaration was not filed by him. The accused further stated in his application dated 27/9/2001 that, his signature was obtained on a blank paper by the complainant only for the purpose of seeking adjournment in the matter. In other words the accused submitted that he had signed the blank paper and given it to the complainant for the purpose of seeking adjournment. The application of the accused dated 27/9/2001 was kept for hearing CR.A/732/2004 6/45 JUDGMENT by the trial court. As it appears from record the trial court recorded plea on 27/9/2001 at exhibit-12. The accused applicant did not press for exhibit-11 application in view of the fact that the plea was recorded at exhibit-12 by the court. The exhibit-11 contains an endorsement on the part of the advocate of the accused made on 8/11/2001 that as the court has issued charge sheet and recorded plea at exhibit- 12, he was not pressing the application at that stage. 4. The complainant was examined and his testimony is recorded at exhibit-13. The complainant has completely supported his version in the complaint. The complainant has stated in his testimony that in the Sarvoday Society there were total 8 row houses built, each of 160 sq. yard. The row house No. G/183 was purchased by the accused pursuant to his meeting with the complainant in presence of one common friend Bhupendrabhai Natvarlal Shah. At that time the accused had also brought with him one Devendrabhai Bhavsar, in whose name the share certificate of the row house, possession letter, were to be delivered. The complainant has narrated in his testimony the incident CR.A/732/2004 7/45 JUDGMENT of selling of row house No. G/183 and delivering the papers and possession to the accused and receiving the cheque for the amount of consideration against the sale of the concerned row house. In his cross examination a suggestion came to be made that such cheques were never issued and at the best they were issued by way of guarantee only. The suggestion was put that no resolution or permission for sale is produced nor has any date been mentioned for selling the subject row house. It was also elicited from the complainant that he does not remember the exact date and month for finalizing the sale of the row house. The accused has not adduced any independent evidence, except one memorandum of understanding between the complainant and one Bhupendrabhai Natvarlal Shah in support of the suggestion that the amount of Rs.8,61,000=00 as a consideration for row house No. G/183 is liable to be paid by Shri. Bhupendrabhai Natvarlal Shah. This memorandum of understanding dated 20/11/2000 came to be exhibited at exhibit-23. The complainant has also produced indemnity bond purported to have been executed by the accused / respondent no.2. The indemnity bond at exh. 16 does not contain date of its execution. The notice sent by registered A.D. and UPC is at exhibit-17 CR.A/732/2004 8/45 JUDGMENT calling upon the accused to pay the cheque amount. The notice dated 13/3/2001 seems to have been duly served upon the accused. The accused has chosen not to reply to the notice. As noticed herein above one document purported to have been Memorandum of Understanding between the complainant and one Bhupendrabhai Natvarlal Shah dated 20/11/2000 was sought to be produced on behalf of the accused under application at exhibit-22. The trial court allowed the same and exhibited the said document at exhibit-23. One Kishor Ratilal Rathodia, Branch Manager of Bank of Baroda is examined and his testimony has been recorded at exhibit-28 which corroborates the facts that the cheques had been presented and they were returned for “insufficient funds”. The said testimony is recorded at exhibit-29. The memos where under the cheques were returned have been produced at exhibit-30 and 31. The relevant extract of the cheque returned is produced at exhibit- 22. One Jitendrabhai Maganlal Shah of Kheralu Nagrik Sahkari Bank to which the cheques were presented has been examined and his testimony is recorded at exhibit- 40. The accounts statement of Kheralu Nagrik Sahkari Bank Ltd run dated 24/3/2003 is produced at exhibit-42. CR.A/732/2004 9/45 JUDGMENT 5. The accused has chosen not to examine any witness except producing one Memorandum of Understanding between the complainant and one Bhupendrabhai Natvarlal Shah. In the cross examination of the complainant suggestions were made to indicate that there was no transaction worth the name between the complainant and the accused. The cheques at the best were therefore required to be treated as guarantee and it can not be said that the complainant had successfully established his entitlement to, and the accused's liability for payment of the cheques amount. Learned trial Judge has also permitted advocate of the parties to make their written submissions which have been placed on record at exhibit-46 and 48 respectively. Further statement of the accused came to be recorded on page 75 below exhibit-12, wherein the accused has completely denied the case of the prosecution, though the accused has stated that the cheques in question were given to one Shri. Bhupendrabhai and in turn the same might have been given by Bhupendrabhai to the complainant and the case is therefore concocted and filed with a view to exert undue pressure on him. 6. The trial court has after perusing the evidence and CR.A/732/2004 10/45 JUDGMENT hearing the parties framed two issues; namely (1) whether the accused has committed an offence punishable under Negotiable Instrument Act, 1938 on the return of two cheques bearing no. 150124 for Rs.7,61,000 and No. 150125 for Rs.6,00,000=00 given to the complainant for his subsisting liability, and on his failure in making payment pursuant to the legal notice issued by the complainant demanding the cheques amount from the accused ? (2) what order ? 7. The Issue No.1 is answered in negative and Issue No.2 is answered as per his final order. 8. After discussing the matter at length the trial court has come to the conclusion that the accused deserves to be honourably acquitted under section 255 (1) of the Code. The order of acquittal dated 12/11/2003 passed in Criminal Case No. 564 of 2001 is impugned in the present appeal. 9. Learned advocate Shri. Bhatt has submitted on behalf of the appellant that the impugned order is perverse, unreasonable, bereft of any reasoning and therefore the same deserves to be quashed and set aside. Shri. Bhatt CR.A/732/2004 11/45 JUDGMENT has submitted that the trial court has not appreciated the material evidence produced on record in its true perspective. Shri. Bhatt has submitted that the scheme of the Negotiable Instrument Act ought to have been borne in mind while assessing the material on record and the testimony of the witnesses. The salutary provision contained in section 139 of the Act, 1881 makes it incumbent upon the court to presume that cheques received by complainant were in discharge of liability or any other debt. The accused was required to dislodge the presumption by leading cogent and positive evidence. Shri. Bhatt has submitted that, in the instant case it was thus bounden duty cast upon the accused to dislodge the presumption that the cheques in question were issued in discharge of any existing liability or debt. The simple reading of section 139 of the Act unequivocally makes it clear that the accused i.e. the drawer of the cheque has to prove it that they were not issued by him against any debt or for discharge of any debt or liability. The presumption is not merely required to be rebutted but it is required to be positively proved by the accused or the drawer that the cheques were not issued against discharge of any liability or debt. In absence of any such cogent CR.A/732/2004 12/45 JUDGMENT evidence on the part of the accused the trial court ought not to have come to the conclusion that the cheques were not issued against any existing liability. Shri. Bhatt has submitted that the trial court ought to have appreciated the fact that the requirement of the act and especially Section 138 and 139 were completely met with when the complainant produced the cheques which were duly signed by the accused and the accused has nowhere denied signature on the cheques. Out of the two cheques, on one cheque i.e cheque at exhibit-15, the accused had appended his signature near the correction, when the date of cheque came to be altered. Reading this evidence with the purshish declaration at exh.9 left no scope whatsoever for the trial court to come to any contrary conclusion as it has done and, therefore, the impugned order suffers from patent illegality, perversity and therefore it has resulted into miscarriage of justice, requiring it to be quashed and set aside. 10. Shri Bhatt, learned advocate for the appellant has relied upon the decision of the Apex Court in case of K.N.BEENA VS. MUNIYAPPAN AND ANOTHER, reported in AIR 2001 SC p.2895 in support of his contention that in CR.A/732/2004 13/45 JUDGMENT cases under the Negotiable Instrument Act, the burden of proving that the cheque was not issued against any debt or consideration is on the accused or the drawer. The trial Court has not appreciated the requirement of Section 139 of the Negotiable Instrument Act, and proceeded on the wrong presumption that the complainant was required to prove the existence of any liability or requirement of paying any consideration on the part of the accused. The Apex Court in terms stated that under Section 139 of the Negotiable Instrument Act, the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge in whole or in part of a debt or liability for which the cheque was issued. The burden of proving that the cheque had not been issued against any liability of debt is on the accused. The Apex Court observed in the case that accused has to prove in the trial by leading evidence that there was no debt or liability for which the cheques were issued. Looking to the evidence on record, it cannot be said that the accused /respondent No. 2 had discharged this burden of proving that cheques were not issued against any liabilities. Shri Bhatt has also relied upon the Apex Court observation in case of HITEN P. DALAL VS. CR.A/732/2004 14/45 JUDGMENT BRATINDRANATH BANERJEE, reported in AIR 2001 SC ps.3897 in support of his contention that the requirement of Section 139 is to be met by the accused by leading cogent evidence. Mere rebuttal cannot be said to be discharging the burden imposed upon the drawer under Section 139 of Negotiable Instrument Act. 11. Shri. Bhatt has also relied upon the Apex Court decision in case of GOA PLAST (P) LTD. Vs. CHICO URSULA D'SOUZA, reported in AIR 2004 SC p.408 in support of his contention that Section 139 of the Code makes it incumbent upon the court to presume that the cheque was issued in discharge of debt or liabilities unless, it is proved contrary by leading cogent evidence by the cheque issuing authority. The Apex Court has observed that the relationship of master servant or mercantile relation between company and the accused are of no significance. 12. Shri. Bhatt has further submitted that purshis declaration Ex.9 dated 24th July, 2002 passed by the accused under his own signature to the trial Court shall render all his earlier explanations into insignificance as it suggest that on that day, it is CR.A/732/2004 15/45 JUDGMENT unequivocally admitted by the accused that he has liability to pay the cheque amount to the complainant and 5 lacs has already been paid and remaining Rs.8,61,000=00 would be paid within a period of one and half month therefrom. Shri Bhatt has relied upon the decision of the Apex Court in case of NAGINDAS RAMDAS VS. DALPATRAM ICCHARAM ALIAS BRIJRAM AND OTHERS, reported in AIR 1974 SC p.471 in support of his contention that admission made in the pleading or under Section 58 of the Evidence Act by the parties or their agents at or before the hearing of the case stands on a higher footing than evidenciary admission. Shri. Bhatt has submitted that in the instant case, as could be seen from the records that accused had on many occasions sought time for settling the matter. The earlier application for adjournment Exh. 5 contains request for time to settle the matter. Again in Exh. 6 it was reiterated that time was sought for settling the matter. In light of this, Ex. 9 deserves to be viewed, which would clearly show that the accused respondent No. 2 on 24th July, 2001 has unequivocally made declaration by way of purshish before the trial Court that the amount of Rs.13,61,000=00 against two cheques numbers made thereunder is payable and out of which, 5 CR.A/732/2004 16/45 JUDGMENT lacs have been paid and remaining amount of Rs.8,61,000=00 would be paid within a period of one and half months therefrom. This purshish / declaration should be viewed in its true perspective as it is observed by the Supreme Court in case of Nagindas (Supra). Shri. Bhatt has submitted that, therefore, the appellant has instructed him to restrict his claim only to Rs.8,61,000=00 as he has already received Rs. 5 lacs as indicated in the purshish Ex.9. 13. Shri. Bhatt, learned counsel appearing for the appellant has invited this court's attention to Ex.11 and submitted that accused has attempted to resile from his admission on a palpably wrong grounds, which can be established by just a look at Ex.9 purshish and Ex.11. The grounds canvassed by the accused No. 2 in Ex.11 application cannot be said to be genuine, in view of the fact that Ex.9 purshish / declaration contains at- least 4 to 5 signatures of the accused and not only one as it is suggested by him in application Ex.11. 14. Shri. Bhatt has submitted that the accused has thereafter, withdrawn the application Ex.11 by saying that it is not pressed at that stage as the plea has CR.A/732/2004 17/45 JUDGMENT been recorded. In other words, Ex.9 purshish / declaration remains on record and merely recording of plea cannot render it a nullity. Shri. Bhatt has submitted that Ex.9 remains on record especially when having made an attempt to withdraw the same and later on giving up the application Exh.11 as not pressed, would all the more go to show that Ex.9 containing admission of the liabilities remains on record. Shri. Bhatt has submitted that even in the written submission that was filed on behalf of the appellant, this plea was categorically taken in para 2 in Ex.46. The accused in his written submission, which were filed after receiving the written submission of the appellant, has not made a whisper about the same. In light of this, it was bounden duty cast upon the trial Court to deal with the contention and answer it properly. Close perusal of the entire judgment would show that the trial Court has not dealt with the admission of accused in respect of liabilities contained in Ex.9 purshish / declaration nor has he dealt with plea taken to this effect in the written statement placed at Ex.46 on behalf of complainant. Thus, the Scheme of Section 139 of Negotiable Instrument Act is not applied at all, which has rendered the entire judgment perverse and contrary CR.A/732/2004 18/45 JUDGMENT to the established provisions of law and therefore, this perversity deserves to be rectified and the appeal, therefore deserves to be allowed. Shri. Bhatt has submitted that the accused has not denied his signature on the cheques nor has he denied his counter signing of the cheques at Ex.15. The fact that the accused has under his own signature made an admission at Ex. 9 admitting his liabilities and the fact of his non-denial of the signature at Ex.9, coupled with his failure in leading any positive evidence with regard to so called absence of liabilities led to one and the only conclusion that, accused was guilty and he did not deserve to be acquitted, and therefore, the impugned order deserves to be quashed and set aside. 15. Shri. Patel, learned advocate for the Respondent no.2 – original accused has submitted that this being an acquittal appeal, this Court may not interfere with the findings of the trial court unless & until it is amply demonstrated and established by the appellant that the findings are perverse and as such no reasonable man would have arrived at on the facts & circumstances of the case. He has submitted that the complainant has miserably failed in establishing the CR.A/732/2004 19/45 JUDGMENT basic ingredient of offense under section 138 of the Act. The presumption under section 139 of the Act comes into operation only after the complainant successfully establish the case meeting all the ingredients of section 138 of the Act. Section 138 provides that the cheque is to be drawn by a person on an account maintained by him with a bank. The cheque is to be drawn for payment of any amount of money for the discharge in full or in part of any debt or any other liability and the same has been returned by the bank due to insufficiency of funds due to any reason. Shri Patel submitted that, thus, for constituting offence under section 138 of the Act, it was primary duty and liability of the complainant to establish that there was a valid commercial transaction and the cheques in question were issued by the accused in discharge and or against any existing liability. When the complainant has failed in establishing these facts before the trial and when the trial court has also recorded its findings in respect of complainant's failure in establishing that the cheques were issued against any existing liability, this court in acquittal appeal may not interfere with the judgment & order of acquittal impugned in the present appeal. CR.A/732/2004 20/45 JUDGMENT 16. Shri. Patel, learned advocate for the respondent has contended that the record and testimony of the complainant, and the document of Memorandum of Understanding between the complainant and one Shri. Bhupendrabhai, came to be produced during the course of cross examination of the complainant himself, would conclusively go to show that the cheques in question were not issued by the accused against any liability or debt due to the complainant. The testimony of the complainant and especially the complainant's admission in his cross examination were sufficient enough to establish that the cheques in question were not issued for discharging any liability of the accused to the complainant. Shri. Patel has submitted that the transaction itself appears to be dubious as not a single document in respect of subject property has been produced by the complainant. It was duty cast upon the complainant to produce the documents like share certificate or copy of share certificate, possession letter or any other document in respect of the row house No. G/183 which is stated to have been sold by the complainant at the behest of the accused for the consideration of Rs.13,61,000=00, i.e. amount of two CR.A/732/2004 21/45 JUDGMENT cheques. Thus the complainant