Manishkumar Rameshchandra Shah vs State of Gujarat and 1

Honourable Mr. Justice Bankim N. Mehta

Appellant - original complainant has preferred this appeal u/s 378 of the Code of Criminal Procedure, 1973 and challenged the judgment of acquittal passed by the learned JMFC, Nadiad on 17.1.1998 in Criminal Case No. 4776 of 1996 acquitting the respondent accused for the offence u/s 138 of the Negotiable Instruments Act, 1881 (for short "the Act"). According to the complainant, he is a partner in a partnership firm "Shree Investment" doing the business of trading in shares. The accused was their client and was dealing in sale and purchase of shares. Rs.3,40,000/- remained payable by the accused towards sale and purchase of shares on settlement of account and the accused admitted the same and executed a writing in that regard. The accused gave two cheques bearing Nos.782381 and 782383 each for Rs.1,70,000/- dated 30.9.1996 drawn on Bank of Baroda towards the outstanding amount. On presentation of the cheques in the bank, both the cheques returned unpaid on account of insufficient funds. Therefore, Notice through advocate was served to the accused and demand of unpaid cheque amount was made. The accused gave reply to the notice and raised false disputes. The accused did not pay the unpaid cheque amount. Therefore, the complainant u/s 138 of the Act was filed in the Court of learned JMFC, Nadiad and it was registered as Criminal Case No. 4776 of 1996.

The trial Court issued summons. Pursuant to the summons, the accused appeared and denied having committed the offence. Therefore, the prosecution adduced evidence. At the end of recording of evidence, trial Court explained to the accused the incriminating circumstances appearing in the evidence against him. The accused in his further statement recorded u/s 313 of the Code explained that false complaint is filed. The accused also filed written statement and stated that the accused was close friend of Kishanbhai Shah, - maternal uncle of the complainant, who was serving in Bank of Baroda; that said Kishanbhai started business of shares as Benami of his wife Gitaben and nephew Manishbhai (complainant) in partnership and a big deal in respect of shares was made in 1994, but on account of fall in share market, they were in need of Rs.1 lac immediately and informed him about their financial difficulty; that he managed to give Rs.1 lac to Kishanbhai from his relative Bhupendrabhai Patel and agianst that, Kishanbhai gave cheque of Rs.1 lac to Bhupendrabhai Patel; that as Kishanbhai did not return the amount to Bhupendrabhai, said Bhupendrabhai presented the said cheque, but it was returned unpaid; as complaint was likely to be filed in respect of said deal, he managed for the amount and paid Rs.1 lac to Bhupendrabhai on behalf of Kishanbhai; therefore, such amount is recoverable from Kishanbhai; that said Kishanbhai did some share transactions without his consent and knowledge and on account of financial difficulty, asked him to give two cheques to show to the share brokers as they were insisting payment of amount; and hence, cheques in question were obtained by said Kishanbhai, who had introduced him in the account opening form of the bank; that said Kishanbhai kept custody of cheques and passbook of the said account and under threats, obtained his signature on a blank stamp paper and other blank papers; that a letter was written to complainant Kishanbhai asking not to present the cheques in the bank and a copy of the letter was also sent to the Bank of Baroda, College Road Branch, Nadiad that said Kishanbhai, who was serving in the bank, suppressed the letter and returned the cheques unpaid with false endorsement and false complaint is filed. It is further explained that he has not made any deal in respect of the shares with the complainant and hence, there is no question of paying the amount to the complainant. After hearing the learned advocates for the parties, the trial Court by impugned judgment acquitted the accused. Being aggrieved by the said decision, the complainant has preferred this appeal.

I have heard learned learned advocate Mr. Samir Afzalkhan for the appellant and learned advocate Mr. Parikh for the respondent accused at length and in great detail. I have also perused the R & P of the trial Court.

Learned advocate Mr. Afzalkhan submitted that there were share transactions between the complainant and the accused and towards outstanding amount of such share transactions, two cheques were given by the accused and the accused also signed a writing with regard to outstanding amount. He also submitted that u/s 139 of the Act, a presumption is in favour of the drawer of cheque and the accused is required to rebut the presumption. He also submitted that the documentary evidence produced on record indicates that the complainant proved legally recoverable debt, but the accused failed to rebut the presumption. He further submitted that the accused has raised a defence that cheques are obtained by the complainant under threats, but no complaint to the police in that regard is filed. Therefore, the trial Court committed error in acquitting the accused and hence, the impugned Judgment is required to be set aside. He relied upon decision of Rangappa Vs. Sri Mohan, , decision of Goaplast Pvt. Ltd. Vs. Shri Chico Ursula D''Souza and Another, and decision of Goa Plast (P) Ltd. Vs. Chico Ursula D''Souza, .

Learned advocate Mr. Parikh submitted that the presumption u/s 139 is a rebuttable presumption and accused is required to raise a probable defence. He also submitted that the complainant, except writing, did not produce any evidence to show that the cheques were given towards legally recoverable debt. The accused in reply to the notice raised a defence that cheques were obtained to show to the share brokers, who were demanding money from the complainant. However, the cheques have been misused. Mr. Parikh further submitted that the accused is not required to prove his defence beyond reasonable doubt and in the facts of this case, cross examination and reply to the notice raise serious doubt about existence of debt. Therefore, the trial Court was justified in acquitting the accused and hence, no interference is warranted in the impugned judgment.

According to the prosecution case, there were share transactions between the parties and on settlement of account, the accused executed a writing Exh-11 and gave cheques Exh-12 and 13 towards discharge of debt. In order to prove the case, the prosecution examined complainant PW 1 Manishbhai Shah at Exh-10. In the cross examination, the complainant admitted that the accused and his maternal uncle were close friends. The complainant also deposed that at the time of execution of writing Exh-11, his maternal uncle Kishanbhai was present, but signature of the witness was not obtained in writing Exh-11. The complainant also stated that he pays income tax. The prosecution produced the writing allegedly executed by the accused at Exh-11. On perusal of the writing, it emerges that the accused assured that Rs.3,40,000/- remains payable by him to the complainant in respect of share transactions of sale and purchase with the complainant and two cheques each for Rs.1,70,000/- dated 30.9.1996 are given towards discharge of such debt. The writing is executed on 31.8.1996. This writing indicates that two cheques each of Rs.1,70,000/- were allegedly given to the complainant towards discharge of the debt. Both the cheques were dated 30.9.1996 and both the cheques returned unpaid. Therefore, notice was served to the accused demanding the amount of unpaid cheques.

The prosecution produced the notice given by the complainant to the accused demanding the amount of unpaid cheques at Exh-14 and reply to the notice given by the accused at Exh-15. It appears from the reply to the notice Exh-15 that the accused denied the writing Exh-11 and also denied that Rs.3,40,000/- was recoverable by the complainant. The accused also raised a defence that as the complainant was in financial difficulty and share brokers were demanding money from him, blank cheques were obtained from him and the cheques have been misused. This reply to the notice indicates that the accused raised a probable defence about existence of legally recoverable debt or liability and misuse of cheques. It is not in dispute that the complainant did not give any reply to the reply to the notice Exh-15.

In view of above evidence, it emerges that on settlement of account of share transactions between the parties, an amount of Rs.3,40,000/-was payable by the accused and the cheques were given towards discharge of such debt. It is very strange that both the cheques were dated 30.9.1996 for the same amount drawn on the same bank and from the same account maintained in the Bank. The writing Exh-11 also indicates that two cheques of the same date were given by the accused towards discharge of his liability on settlement of account. It is settled proposition that presumption u/s 139 of the Act is rebuttable presumption and when an accused has to rebut the presumption u/s 139 of the Act, 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 doubt about the existence of a legally recoverable debt or liability, the prosecution can fail. The accused can rely upon on the materials submitted by the complainant in order to raise such defence. If the accused is able to rebut the presumption and raise probable defence, the burden shifts on the complainant to prove the existence of a legally recoverable debt and the debt was given towards discharge of such debt. In the present case, as observed earlier, the accused raised defence that cheques have been misused and has raised dispute about share transactions and settlement of account. The accused raised the defence with regard to existence of legally recoverable debt or liability in reply to the notice. The complainant was cross examined in respect of writing Exh-11 and the cheques Exh-12 and 13. The complainant was also cross examined in respect of share transactions. Thereby, the accused was able to rebut the presumption by raising probable defence that there were no share transactions between them and the cheques were misused. Therefore, the burden shifted on the complainant to prove existence of legally recoverable debt. However, the complainant did not adduce any evidence in that regard. In view of the fact that two cheques of the same date were allegedly given towards discharge of settlement of account in respect of share transactions between the parties, it is difficult to believe that a debtor would give two cheques of the same dates drawn on the same bank drawn on the same account towards discharge of a debt or liability. It is also very significant that the prosecution did not produce any books of account to show share transactions and settlement of account between the parties. Therefore, the prosecution case that there were share transactions between the parties and the accused gave cheque towards discharge of debt on settlement of account raises serious doubt about existence of legally recoverable debt.

In the decision of Rangappa (supra), Hon''ble Supreme Court ruled about presumption u/s 139 of the Act. In the present case, the accused was able to raise a probable defence and rebut the presumption and therefore, this decision does not help the appellant. Similarly, in the decisions of Goaplast (supra), Hon''ble Supreme Court has laid down law with regard to presumption u/s 139 of the Act. In the facts of the present case, as observed earlier, the accused was able to raise probable defence and rebut the presumption. Therefore, these details do not give any assistance to the appeal.

In view of above, the appellant failed to point out any infirmity in the impugned judgment and the appeal is required to be dismissed. In the result, the appeal fails and stands dismissed.