As per case facts, a loan was taken by a third party, which the Accused allegedly undertook to repay via a cheque. This cheque was dishonoured, leading to the Accused's ...
Shivgan 2-Apeal-1120-2011.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1120 OF 2011
Mr. Vijaykant Motilal Kothari
Age: 65 yrs, Occ: Business
R/At:-6/C, Motibaug,
Pune-Satara Road,
Pune-411037 …Appellant
Versus
1. The State of Maharashtra
2. Om Engineers and Builders
Ekta Apartments, 47/22 Erandawane,
Law College Road, Pune.4
3. Lalit Amrutlal Shah
Age: adult, Occ: Business,
R/at 15, Umi Kaushal Society,
S.No.585, Bibewadi, Pune 37.
4. Rajendra Amrutlal Shah
Age: adult, Occ: Business
5. Devendra Amrutal Shah
Age: adult, Occ: Business
6. Amit Lalit Shah
Age: adult, Occ: Business
7. Apul Lalit Shah
Age: adult, Occ: Business
4 to 6 R/at 15, Umi Kaushal Society
S.No.585, Bibewadi, Pune 37 …Respondents
Mr. Abhishek Pungliya, for the Appellant.
Ms. Poonam P. Bhosale, APP for the Respondent No.1-State.
Mr. Subhash Jha along with Siddharth Jha, Sumit Upadhyay
i/b Law Global Advocates, for the Respondent Nos. 2 to
7.
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CORAM DR. NEELA GOKHALE, J.
RESERVED ON: 13
th
JANUARY 2026
PRONOUNCED ON: 28
th
JANUARY 2026
JUDGMENT:-
1. This Appeal assails the Judgment and Order dated 31
st
January 2011 passed in Criminal Appeal No. 127 of 2008 by
the Additional Sessions Judge, Pune whereby the Accused
namely, Shri Lalit Amrutlal Shah, Rajendra Amrutlal Shah,
Devendra Amrutlal Shah, Amit Lalit Shah and Apul Lalit Shah
stand acquitted of the offences punishable under Section 138
of the Negotiable Instruments Act, 1881 (for short 'NI Act')
under Section 386(b)(i) of the Code of Criminal Procedure,
1973 (for short 'Cr.P.C.') The Trial Court namely, the Judicial
Magistrate, First Class (‘JMFC’), Court No.8 (Link), Pune in
S.C.C. No. 0420758 of 2006 had convicted the Accused in the
said offence.
2. By order dated 19
th
December 2011, while admitting
the Appeal, this Court recorded its view that the impugned
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Judgment and Order required re-consideration. Hence, leave
to appeal was granted.
3. The facts of the case, in brief, are as under: -
3.1 The Appellant is the Original Complainant. The
Respondent No.1 is the State of Maharashtra. The
Respondent Nos. 2 to 7 are the Original Accused, i.e., the
Respondent No.2 is a Partnership Firm and the Respondent
Nos. 3 to 7 are its partners.
3.2 As discerned from the complaint, it appears that in
July 2004, one Mr. Hirachand Raichand Pagaria took a hand
loan of Rs.56,50,000/- from the Complainant. Mr. Pagaria
agreed to repay the hand loan with interest. It is contended
that the Accused, being close friends of Mr. Pagaria,
undertook to satisfy the loan amount taken by Mr. Pagaria.
Hence, the Respondent No.3 herein (Original Accused No.2),
issued a cheque bearing No.327171 dated 31
st
January 2006
for an amount of Rs.78,00,000/- drawn on Bank of Baroda,
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Gultekdi Branch, Pune in favour of the Original Complainant.
After the issuance of the cheque, Mr. Pagaria and the Accused,
by letter dated 20
th
January 2006, requested the Complainant
not to deposit the cheque until 5th February 2006.
3.3 Another request was made to the Complainant to not
deposit the cheque till 17
th
February 2006, as Mr. Pagaria was
yet arranging the amount. Ultimately, the cheque was
deposited in the Bank of Maharashtra, Khadki Branch, Pune,
and was dishonoured, with an intimation dated 25
th
February
2006 issued to the Complainant.
3.4 A legal notice ensued from the Complainant. However,
the said notice was not replied to by the Respondent No.2
herein (Original Accused No.1). Hence, the Complainant
made the complaint under Section 138 of the NI Act on 8
th
May 2006 before the Trial Court. Process was issued. The
accused appeared and denied the charges against them. The
Complainant examined himself and 3 others, namely, Vilas
Kashinath Shelke, a clerk working in the office of the Deputy
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Registrar of Partnership Firms; Smita Pangarkar, the Manager
of Bank of Baroda, Gultekdi Branch and Dilip Lunawat, a
person stated to witness the handing over of a cheque of
Rs.78,00,000/- by the Respondent No.3 to the Complainant.
The Respondent No.5 (Original Accused No.4) testified on
behalf of all the Accused. Statement under Section 313 of the
Cr.P.C. was recorded; arguments were heard, and the Trial
Court convicted all the accused for the offence punishable
under Section 138 of the NI Act by Judgment and Order
dated 1
st
March 2008.
4. The Accused preferred an Appeal before the
Additional Sessions Court, Pune, against their conviction. By
Judgment and Order dated 31
st
January 2011, the Appeal
was allowed, and the judgment and order of the Trial Court
were set aside. It is this Judgment and Order, which is
impugned in the present Appeal.
5. Before advertence to the rival submissions, it is
necessary to discuss the principles laid down by the Supreme
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Court governing the scope of interference by the High Courts
in an appeal against acquittal, assailing the finding of
acquittal of the accused by the Trial Court. The Supreme
Court in its decision in the matter of Rajesh Prasad v. State of
Bihar & Anr.
1
held as below:-
“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 case [Chandrappa v. State of
Karnataka, (2007) 4 SCC 415]
“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, re-
appreciate 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
1 (2022) 3 SCC 471
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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
phraseology 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.
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(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.”
6. Further, in the case of
H.D. Sundara & Ors. v. State of
Karnataka
2
the Supreme Court summarized the principles
governing the exercise of appellate jurisdiction while dealing
with an appeal against acquittal under Section 378 of Cr.P.C.
as follows:
“8. .…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 re appreciate 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;
2 (2023) 9 SCC 581
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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.”
7. 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:-
(a) That the judgment of acquittal suffers from patent
perversity;
(b) That the same is based on a misreading/omission
to consider material evidence on record;
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(c) 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. The Appellate Court, to interfere with the judgment
of acquittal, would have to record pertinent findings on the
above factors if it is inclined to reverse the judgment of
acquittal rendered by the Trial Court.
9. In light of the above legal principles, I now proceed
to analyse the findings in the present case, leading to the
acquittal of the Accused. Two legal issues arise for my
consideration in the present matter. Firstly, whether in the
absence of any evidence of the cheque being issued in
discharge of a liability of a third party, the offence under
Section 138 of the NI Act can be held to have been
committed. Secondly, whether a partner/director can be
prosecuted in the absence of any specific averment in the
complaint regarding the involvement of the Accused in the
commission of an offence and whether a conviction can be
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maintained against such an Accused in the absence of any
evidence of his participation in the affairs of the Firm.
10. Insofar as the first issue is concerned, I have gone
through the deposition of the witnesses. The Complainant has
examined himself and has deposed regarding the hand loan
taken by Mr. Pagaria. According to him, the Accused came
forward to undertake the responsibility of payment of the
hand loan. He has repeated that the Accused requested him
to not deposit the cheque till 5
th
February 2006. However, in
his cross-examination, he has admitted that he is unable to
specifically state which of the Accused was in charge of the
affairs of the Firm at the relevant time. Thus, the blanket
statement made by the Complainant in his chief-examination
regarding the Accused coming forward to accept the liability
of Mr. Pagaria is of no relevance, as he is not aware of the
specific role of any of the Accused in the offence.
11. Similarly, none of the witnesses examined by the
Prosecution has been able to prove beyond a reasonable
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doubt that any of the Accused took over the liability of Mr.
Pagaria. There is neither any document nor any record of
such acceptance of liability. Save and except the bare
statement of the Complainant in his chief-examination in that
regard, the Complainant is unable to prove the same. In fact,
his answers in the cross-examination demolish his case.
12. I have also gone through the decisions of the various
Courts, including the Supreme Court, as cited by both parties.
The findings of the Sessions Court that the Complainant
never had any financial relations with the Accused at any
time before the issuance of the cheque are correct and need
no interference.
13. Furthermore, the Complainant is unable to explain
how the amount of the hand loan of Rs. 56,50,000/- taken by
Mr. Pagaria has risen to Rs.78,00,000/-, which is the amount
of the cheque dishonoured. There is no explanation regarding
the rate of interest to justify the increase in the amount, and
no attempt is even made by the Complainant to give any
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explanation in that regard. For this reason also, the assertion
of the Complainant that the cheque was issued by the
Accused against repayment of the hand loan taken by Mr.
Pagaria is far-fetched. There is no infirmity in the findings of
the Sessions Court that there was no privity of contract
between the Complainant and the Accused.
14. Insofar as the second aspect of the matter is
concerned, save and except a bald averment in paragraph 1
of the complaint made before the JMFC, Pune that the
Original Accused Nos. 2 to 6 are responsible for the day-to-
day affairs and conduct of the business of the Accused No.1-
Firm, there is no specific averment in the complaint
explaining the role of any of the Accused in the partnership
firm. In its recent judgment in the matter of Kamalkishore
Shrigopal Taparia v. India Ener-Gen Private Limited & Anr.
3
,
the Supreme Court, while discussing its earlier judgments,
has held that mere designation as a director is not sufficient;
specific role and responsibility must be established in the
3 2025 INSC 223
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complaint. In N.K. Wahi v. Shekhar Singh
4
, the Court in
paragraph 8 observed as under:
“8. To launch a prosecution, therefore, against
the alleged Directors there must be a specific
allegation in the complaint as to the part played
by them in the transaction. There should be clear
and unambiguous allegation as to how the
Directors are in-charge and responsible for the
conduct of the business of the company. The
description should be clear. It is true that precise
words from the provisions of the Act need not be
reproduced and the court can always come to a
conclusion in facts of each case. But still, in the
absence of any averment or specific evidence the
net result would be that complaint would not be
entertainable.”
15. Upon perusal of the record and submissions of the
parties, it is evident that none of the Accused has any legal
debt or other liability towards the Original Complainant nor
is there any evidence to indicate as to which of the partners
was responsible for the day-to-day conduct of the business
involving taking over of the liablity of Mr. Pagaria.
4 (2007) 9 SCC 481
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16. Considering the aforesaid discussion, in my view, the
impugned Judgment and Order of acquittal does not suffer
from any patent perversity and is not based on any
misreading/omission of the Sessions Court in considering the
material evidence on record. In these circumstances, I am not
inclined to reverse the Judgment of acquittal rendered by the
Sessions Court.
17.The Appeal is thus, dismissed.
(DR. NEELA GOKHALE, J)
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SHAMBHAVI
NILESH
SHIVGAN
Digitally
signed by
SHAMBHAVI
NILESH
SHIVGAN
Date:
2026.01.28
15:57:26
+0530
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