R/CR.A/1398/2011 JUDGMENT DATED: 07/08/2026

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

R/CRIMINAL APPEAL NO. 1398 of 2011

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK Sd/-

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Approved for Reporting Yes No

୰

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HARSHAD U KAMLE

Versus

STATE OF GUJARAT & ANR.

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Appearance:

MR HRIDAY BUCH(2372) for the Appellant(s) No. 1

ADVOCATE NOTICE SERVED for the Opponent(s)/Respondent(s) No. 2

MR RASESH H PARIKH(3862) for the Opponent(s)/Respondent(s) No. 2

MR.HEMANG H PARIKH(2628) for the Opponent(s)/Respondent(s) No. 2

MS JIRGA JHAVERI ADDITIONAL PUBLIC PROSECUTOR for the

Opponent(s)/Respondent(s) No. 1

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CORAM:HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK

Date : 07/08/2026

JUDGMENT

1.The appellant-original complainant has preferred this

appeal under Section 378 of the Code of Criminal Procedure,

1973 against the judgment and order of acquittal dated

08.06.2011 passed by the learned Principal Sessions Judge,

Rajkot (hereinafter be referred to as “the First Appellate

Court”) in Sessions Case No.149 of 2009 whereby the First

Appellate Court has quashed and set aside the order dated

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18.08.2009 passed in Criminal Case No.4509 of 2006 below

Exh.58 by learned 5

th

Additional Senior Civil Judge and

Judicial Magistrate First Class, Nadiad (hereinafter be

referred to as “the Trial Court”) and acquitted the respondent

accused from the charges under Section 138 of the Negotiable

Instruments Act (hereinafter be referred to as the “N.I.

Act”) .

2. Brief Facts Giving Rise to the Present Appeal are that

Respondent No. 2 was managing the affairs of a trust, namely

Tapsvi Charitable Trust, as its trustee. For the purpose of

running the affairs of the Trust, Respondent No. 2 required a

premises and, therefore, took a portion of the appellant's

hospital property on rent. Respondent No. 2 was liable to pay

rent for the said premises.

2.1 Respondent No. 2 also borrowed amounts of Rs. 50,000/-,

Rs. 2,00,000/-, and Rs. 50,000/- from the appellant, and Rs.

2,00,000/- from the appellant's wife, for the proper

management of the Trust and for carrying out its various

activities. Besides the said loans, rent amounting to

Rs. 1,50,000/- was also payable by Respondent No. 2. Despite

repeated demands, Respondent No. 2 failed to repay the

amounts due. Upon persistent insistence by the appellant,

Respondent No. 2 acknowledged her liability and executed a

promissory note and a written undertaking agreeing to repay

the outstanding amount.

2.2 As neither the Trust nor Respondent No. 2 repaid the

outstanding dues for a considerable period, Respondent No. 2,

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in acknowledgment of her personal liability, issued Cheque

No. 235630 dated 01.06.2006, drawn on Bank of Baroda,

Kothi Branch, Vadodara, for a sum of Rs. 6,50,000/- in favour

of the appellant. The appellant presented the said cheque for

encashment through his account maintained with Central

Bank of India, Petlad Road Branch, Nadiad. However, the

cheque was dishonoured and returned unpaid with the

endorsement "Insufficient Funds."

2.3 Consequently, the appellant, through his Advocate, issued

a statutory legal notice dated 28.06.2006, calling upon

Respondent No. 2 to make payment of the cheque amount

within the prescribed period, failing which proceedings under

Section 138 of the Negotiable Instruments Act would be

initiated.

2.4 The said notice was served upon Respondent No. 2 on

02.07.2006. In reply, Respondent No. 2 denied the contents of

the notice. Although she did not dispute the issuance of the

cheque, she denied the existence of any legally enforceable

debt or liability.

2.5 As Respondent No. 2 failed to make payment despite

service of the statutory notice, the appellant was constrained

to initiate proceedings under Section 138 of the Negotiable

Instruments Act by filing a complaint on 11.08.2006 before

the learned Judicial Magistrate First Class, Nadiad.

2.6 Process was issued under Section 204 of the Code of

Criminal Procedure, 1973. Respondent No. 2 appeared before

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the trial Court and pleaded not guilty, whereupon the trial

commenced.

2.7 To prove his case the appellant has examined one witness

namely Dr. Harshad U. Kamli – complainant at Exh.9 and led

following documentary evidence:-

Sr.

No.

Exhibit

No.

Description of Document

1 14 Cheque No. 235630 dated 01/06/2006 for Rs.6,50,000/-

issued by the accused to the complainant

2 15 Original Bank Return Memo showing the reason for

dishonor of cheque

3 16 Letter/Intimation issued by Central Bank of India to the

complainant regarding the return of cheque

4 17 Office copy of the notice issued to the accused

5 18 Original Registered A.D. receipt signed by the accused

acknowledging receipt of the notice issued

6 19 U.P.C. Certificate

7 20 Original reply to the notice issued to the accused

8 21 Settlement Agreement

9 23 Letter dated 08/05/2005 written to the accused by the

complainant and Dr. Vijaykumar Patel

2.8 Upon completion of the oral and documentary evidence,

the appellant filed a closing purshis at Exhibit-43. Respondent

No. 2 did not enter the witness box or adduce any oral

evidence in her defence. She only furnished her statement

under Section 313 of the Code of Cr. P.C.

2.9 After hearing both the parties and after evaluating the

evidence placed on record the trial Court vide order dated

18.8.2009 convicted the respondent accused for the offence

punishable under Section 138 of the N.I. Act and imposed

simple imprisonment for a period of 3 months and fine of

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Rs.1000/- and in default 30 days simple imprisonment.

Further the Trial Court has also directed the accused to pay

Rs.6,50,000/- to the the present appellant.

2.10 Being aggrieved and dissatisfied with the aforesaid order

of Trial Court, the accused approached First Appellate Court

by filing Criminal Appeal No.71 of 2009 below Exh.29 wherein

the First Appellate Court has quashed and set aside the order

dated 18.08.2009 passed by the Trial Court and acquitted the

respondent accused from the charges under Section 138 of

N.I. Act.

2.11Being aggrieved and dissatisfied with the order of

acquittal passed by the First Appellate Court, the original

complainant has filed present appeal.

3.Heard Mr. Hriday Buch, learned counsel for the

appellant, Mr. Hemang Parikh, learned counsel for

respondent No.2 and Ms. Jirga Jhaveri, learned APP for the

State of Gujarat.

4. Mr. Buch, learned counsel for the appellant, has taken this

Court through the judgments and orders of the Trial Court

and the First Appellate Court. In the wake of his submissions,

he contends that the learned Judge of the Appellate Court

committed a serious error of law and fact by passing the

impugned judgment and order of acquittal, thereby reversing

the findings recorded by the Trial Court without providing any

cogent reasons and without identifying any illegality in the

Trial Court's judgment.

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4.1 Mr. Buch, learned counsel for the appellant has submitted

that the Trial Court, after properly appreciating the

documentary evidence produced before it, rightly held the

respondent guilty of the offense under Section 138 of the

Negotiable Instruments (N.I.) Act and held the respondent

liable to pay compensation of Rs. 6,50,000/-.

4.2 Mr. Buch, learned counsel for the appellant has submitted

that the First Appellate Court has misapplied the law and

ignored material evidence, thereby rendering the order

perverse and unsustainable. The First Appellate Court failed

to appreciate that the respondent No.2 did not discharge the

statutory burden under Section 139 of the Act. He has

submitted that her signature on the cheque and its contents

were never disputed. Even in her reply to the statutory notice,

no categorical denial was made. Vague averments cannot

rebut the statutory presumption. Dishonest conduct from

inception disentitles respondent No.2 from any discretionary

relief.

4.3 Mr. Buch, learned counsel for the appellant has submitted

that the First Appellate Court erred in holding that the

liability was of the trust and hence trustees ought to have

been joined as accused. He has submitted that the appellant's

case consistently was that respondent No.2 accepted the

trust's liability personally and issued the cheque in her

individual capacity. Hence, joining of the trust or trustees as

parties was unnecessary. The contrary finding is wholly

erroneous. Learned counsel for the appellant has relied upon

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the decision passed by The Hon'ble Supreme Court, in case of

Sankar Padam Thapa Versus Vijaykumar Dineshchandra

Agarwal 2025(0) AIJEL-SC 75982 " wherein it is held that

"If in a trust, complaint is against trustee and when a cause of

action arises due to an alleged dishonor of cheque and a

complaint is initiated under NI Act, the same is maintainable

against Trustee who has signed cheque, without requirement

to array Trust also as an accused."

4.4 Mr. Buch, learned counsel for the appellant has submitted

that the First Appellate Court concludes that dues were not

personal dues of respondent and that since the trust/other

trustees are not joined as party, benefit is extended to

accused person. The said view is in complete contradiction

with the view taken by the Hon'ble Supreme court in the case

of Bijoy Kumar Moni Versus Paresh Manna Criminal

Appeal No.556 of 2024 2024 AIJEL SC 74454 more

particularly para 52 of the said judgement.

4.5 Mr. Buch, learned counsel for the appellant has submitted

that Section 138 NI Act clearly provides that dishonor of a

cheque issued towards discharge of any legally enforceable

debt or liability constitutes an offence. He has submitted that

Respondent No.2 admitted the dues of the trust and accepted

liability personally. Issuance of cheque in her name squarely

attracts Section 138.

4.6 Mr. Buch, learned counsel for the appellant has submitted

that the First Appellate Court wrongly held that the appellant

failed to examine his wife Sashiben or prove her capacity to

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lend Rs. 2 lakhs. The appellant's evidence clearly established

that Sashiben was employed as Laboratory Assistant, earning

salary, and lent the amount from her savings. The finding is

contrary to record and perverse.

4.7 Mr. Buch, learned counsel for the appellant has submitted

that the First Appellate Court wrongly cast the burden upon

the appellant to prove written documentation of the loan.

Under Sections 138 and 139 NI Act, presumption operates in

favour of the holder of the cheque. It was for respondent No.2

to rebut the presumption, which she failed to do. The finding

that no loan was advanced is based on conjecture and

contrary to statutory scheme.

4.8 Mr. Buch, learned counsel for the appellant has submitted

that the First Appellate Court's discussion on rent receipts

and income tax returns is misplaced. Non-production of

returns does not render the appellant's case doubtful.

Occupation of hospital premises by respondent No.2 is

undisputed. No positive evidence of rent payment was

produced by respondent No.2. Hence, adverse inference

against appellant is unjustified.

4.9 Mr. Buch, learned counsel for the appellant has submitted

that the First Appellate Court have misread the agreement

(Samadhan Karar) dated 16.03.2005 (Exh.21) and have also

misread the "Bahedhari Patra" (Exh.41) (Guarantee Letter),

which shows the liability of the respondent No.2 toward the

appellant herein. The documents clearly records dues of

respondent No.2. The contrary finding is based

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misinterpretation and is erroneous. The First Appellate Court

erred in holding that respondent No.2 did not accept liability

in her individual capacity. He has submitted that the oral and

documentary evidence of appellant was ignored. Respondent

No.2 neither examined herself nor produced any evidence.

Hence, appellant's evidence ought to have been accepted.

4.10 Mr. Buch, learned counsel for the appellant has

submitted that the Learned Session court ought not to have

overlooked exhibited document at Exh.41. The existence of

the said exhibited document is completely ignored by the First

Appellate Court. The said document goes to the root and

proves beyond all reasonable doubt with no other possible

view except the guilt of the Respondent accused.

4.11 Mr. Buch, learned counsel for the appellant has

submitted that the impugned judgment and order passed by

the First Appellate Court is illegal, perverse, and contrary to

the evidence on record, the provisions of the Negotiable

Instruments Act, and the settled principles of law. He has

submitted that the First Appellate Court failed to appreciate

that respondent No.2 did not rebut the statutory presumption

under Section 139 of the Act. Her signature on the cheque

and its contents were never disputed, and even her reply to

the statutory notice contained no specific denial.

4.12 Mr. Buch, learned counsel for the appellant has

submitted that the First Appellate Court erred in holding that

the Trust and its trustees ought to have been impleaded. He

has submitted that the appellant consistently pleaded that

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respondent No.2 personally accepted the Trust's liability and

issued the cheque in her individual capacity. Hence, the

complaint was maintainable against her alone under Section

138 of the Act.

4.13 Mr. Buch, learned counsel for the appellant has

submitted that the First Appellate Court misapplied Sections

138 and 139 of the Act by casting the burden on the appellant

instead of requiring respondent No.2 to rebut the statutory

presumption. The finding that no legally enforceable liability

existed is contrary to law.

4.14 Mr. Buch, learned counsel for the appellant has

submitted that the finding that the appellant failed to prove

the loan of Rs.2,00,000/- is erroneous. The appellant's

evidence established that his wife, Sashiben, was employed as

a Laboratory Assistant, had independent earnings, and

advanced the amount from her savings.

4.15 Mr. Buch, learned counsel for the appellant has

submitted that the First Appellate Court wrongly insisted

upon written proof of the loan. In the absence of rebuttal

evidence from respondent No.2, the statutory presumption

under Section 139 remained unrebutted.

4.16 Mr. Buch, learned counsel for the appellant has

submitted that the First Appellate Court misread the

documentary evidence, particularly the Samadhan Karar

(Exh.21) and Bahedhari Patra (Exh.41), which clearly

establish respondent No.2's liability. The contrary findings are

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based on misinterpretation of the record.

4.17 Mr. Buch, learned counsel for the appellant has

submitted that the First Appellate Court exceeded its

appellate jurisdiction under Sections 374 and 386 of the Code

by reversing the well-reasoned judgment of conviction passed

by the Learned Magistrate without any valid legal basis.

4.18 Mr. Buch, learned counsel for the appellant has

submitted that the impugned judgment and order of acquittal

being illegal, perverse, contrary to law and evidence, deserves

to be quashed and set aside, and the judgment of conviction

passed by the Trial Court deserves to be restored.

4.19 Mr. Buch, learned counsel for the appellant has referred

and relied upon the following decisions:-

1. Sankar Padam Thapa Versus Vijaykumar

Dineshchandra Agarwal (supra)

2. Bijoy Kumar Moni Versus Paresh Manna (supra)

5.On the other hand, Mr. Hemant Parikh, learned counsel

for the respondent-accused, has submitted that the appellant

(original complainant) failed to prove that the respondent was

guilty under Section 138 of the N.I. Act. He contends that the

appellant failed to establish the existence of any legally

enforceable debt owed by the respondent for which the

cheque of Rs. 6,50,000/- was allegedly issued in favor of the

appellant.

5.1 Mr. Parikh, learned counsel for the respondent accused

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has submitted that the Trial Court failed to appreciate the

documentary evidence produced before it in its true and

proper spirit, and thus the conviction recorded by the Trial

Court against the respondent was bad in law. Consequently,

the First Appellate Court rightly passed the impugned

judgment and order of acquittal in favor of the respondent,

which is just and proper.

5.2 Mr. Parikh, learned counsel has submitted that since the

present appeal is against an order of acquittal, no

interference is warranted by this Court unless grave illegality

or perversity is established in the impugned judgment of the

First Appellate Court.

5.3 Mr. Parikh, learned counsel for the respondent has

submitted that there is no perversity or illegality committed

by the First Appellate Court in passing the Judgment in

Criminal Appeal No. 71 of 2009 whereby the Order passed by

the Ld. Trial Court is quashed and set aside and acquitted

Respondent No.2. He has submitted that First Appellate Court

had not committed any error in appreciating the oral as well

as documentary evidence produced in the Criminal Case No.

4509 of 2006. He has submitted that the First Appellate Court

had appreciated the evidence in its true and letter spirit and

also followed the Judgments declared by this Hon'ble Court as

well as by the Hon'ble Apex Court. He has submitted that the

Complainant had failed to prove that Rs.6,50,000/- was due

and payable by the Respondent No.2 and towards the said

debt, that he had received a cheque on 01.06.2006. He has

submitted that the First Appellate Court had considered the

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fact that as per the Agreement below Exh. 21, the

Complainant and 02 other persons became the Trustees of the

Trust and they are administering the Trust.

5.4 Mr. Parikh, learned counsel for the respondent has

submitted the Appellant / Complainant had failed to prove and

establish his case whereby the necessary ingredients under

Section 138 of the NI Act, 1881 are satisfied that the cheque

amount of Rs.6,50,000/- is for legal enforceable debt against

the Respondent No.2. He has submitted that the First

Appellate Court rightly appreciated the fact that Complainant

had to prove his case for demand of legal enforceable debt,

not produced any account book or examine any independent

witness like Vijaykumar A. Patel, Shashikalaben who is a wife

of Complainant. He has submitted that the First Appellate

Court had also considered the fact that Complainant had

neither produced nor examined the best evidence before the

Ld. Trial Court to prove his case that Complainant is a

creditor / liable to recover the cheque amount from the

Respondent No.2. He has submitted that the appellant has not

examined his wife who is a Trustee of the Trust and also not

authorized the appellant to recover the amount from

Respondent No.2.

5.5 Mr. Parikh, learned counsel for the respondent has

submitted that the complainant who is a Doctor who is filing

an income tax returns and such an amount of Rs.50,000,

2,00,000/- and 50,000 in cash has not been shown in his

account book towards the debt of the Respondent No.2. He

has submitted that First Appellate Court has also rightly

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appreciated the fact that in all Rs.3,00,000/- has been given in

cash as per demand of the complainant in the notice under

Section 138 of the NI act, 1881 and the document below Exh.

21 complainant has to take Rs.50,000/- therefore, there is a

material contradiction in the contention raised by the

complainant in oral as well as in documentary evidence.

Therefore, there is no perversity and illegality committed by

the First Appellate Court in the impugned judgement and

therefore, the same may be upheld.

5.6 Mr. Parikh, learned counsel for the respondent has

submitted the Court had while framing the Issue No. 1 not

taken into consideration Exh. 20 – Reply to the notice wherein

from the beginning the Respondent No.2 had disputed the

cheque and the amount of cheque. Therefore, the

Complainant has no benefit of presumption under Section 139

of the NI Act, 1881 cheque was issued towards consideration.

Therefore, complainant had failed to prove legal enforceable

debt. (refer cross examination of complainant). The said fact is

admitted.

5.7 Mr. Parikh, learned counsel for the respondent has

submitted that the Complainant had summarily failed to prove

his case that he is in holder in due course of the cheque of

Rs.6,50,000/- from the Respondent No.2. The Complainant

had in his notice, demanded the cheque amount on the

following heads :-

Rs. 50,000/- Cash given by Complainant (no date)

Rs.2,00,000/- Cash given by Complainant (no date)

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Rs. 50,000/- Cash given by Complainant (no date)

Rs.2,00,000/- Shashiben Kamle wife of Complainant

(no date)

Rs.1,50,000/- Towards the arrears of rent.

5.8 Mr. Parikh, learned counsel for the respondent has

submitted the above mentioned facts have been demanded

and pleaded in the notice which has been denied and disputed

by the Respondent No.2 in her reply to the notice below Exh.

20 from beginning. He has also submitted that the

Complainant had not disputed the fact that his wife Shashiben

Kamle was the Trustee of the Trust and she is administering

the Trust. He has submitted that the Complainant had

produced below Exh. 26 to 37, the rent receipts issued by him

and sanctioned by Dr. Vijaykumar A. Patel as the Complainant

had contended that an amount of Rs.1,50,000/- towards the

arrears of rent has not been received. He ha submitted that

the Complainant had made a false statement and though he

had received the amount of rent, before the Ld. Trial Court,

he had pleaded and deposed that he had not received the

amount of rent. The Complainant had admitted that as per the

Exh. 21, since 01.02.2005, Complainant was in charge of the

Trust and its affairs and for the month of February – 2005 and

March – 2005, rent have been paid and for that rent receipts

are issued by complainant. He has submitted that under the

circumstance, it cannot be believed that the Complainant had

not received the amount towards the rent. Complainant had

admitted fact no recovery of notice was issued. (reference-

cross examination). He has submitted that the Complainant

had also admitted in his cross examination that Accused had

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not paid rent of 15 months and for that he had not issued any

notice for recovery of the said amount. The amount of rent is

to be recovered from the Trust and not from the Respondent

No.2. The Trial Court had summarily failed in appreciating the

oral evidence of the Complainant and therefore, the First

Appellate Court had appreciated the said evidence in letter

and true spirit. Therefore, impugned judgement is in

consonance of settled law of appreciation of evidence.

5.9 Mr. Parikh, learned counsel for the respondent has

submitted the Ld. Trial Court had failed to consider the

fact that since, 01.02.2005, the Respondent No.2 is not

in affairs of the Trust and she is not a Trustee. There is

no occasion for her to issue a cheque on 01.06.2006

towards the arrears of amount of cheque. The First

Appellate court had rightly appreciated facts and

circumstance. The First Appellate Court had rightly

appreciated the documentary evidence and the oral

evidence and conduct of the Complainant and set aside

the order of the Ld. Trial Court. He has submitted that

the controversy raised by the Complainant under the NI

Act is to be proved by documentary evidence. The

cheque has been issued towards the liability or debt.

Once the Accused disputes the amount of cheque, in that

circumstances, the Complainant has to prove the cheque

amount by producing cogent evidence like Account

Books wherein the Accused has been shown as debtor.

In the present case, the Complainant has not produced

any Account Books or ITR which shows that the Accused

is the debtor of Rs.6,50,000/- in the Account Books.

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5.10 Mr. Parikh, learned counsel for the respondent

relies upon the cross examination of Complainant at Exh.

9 wherein he had admitted that in his Account Books, he

has not shown that the Respondent No.2 is a debtor

though he maintains the Account Books. He has

submitted that the Complainant had not produced any

Account Books to show that he had given total

Rs.3,00,000/- in cash to Respondent No.2.

5.11 Mr. Parikh, learned counsel for the respondent has

submitted that as the Respondent No.2 was not a

Trustee pursuant to the Agreement dated 01.02.2005,

Dr. Vijaykumar A. Patel and Complainant had written a

letter on 08.05.2005 to the Respondent No.2 stating that

the signature of the Respondent No.2 may be deleted

from the Bank record. From on record proves that

Respondent No.2 was not in charge of trust and

complaint and other trustees are in charge and

administering trust.

5.12 Mr. Parikh, learned counsel for the respondent has

submitted that the complainant has produced the

document at Exh.21 wherein it has been mentioned the

amount of payment and the said liability has been

accepted by the Complainant and other Trustees.

Perusal of the said document, it has not been mentioned

that Rs.6,50,000/- are outstanding and has to be paid.

The Complainant has not proved the said document.

5.13 Mr. Parikh, learned counsel for the respondent has

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submitted that as per the evidence on record, it clearly

proves that complainant had made a false and frivolous

case against the respondent and hence and the present

appeal may be dismissed.

5.14 Mr. Parikh, learned counsel for the respondent has

referred and relied upon the decision of this Court in the case

of Nitin Vrujlal Kakkad vs. State of Gujarat and another

dated 4.11.2025 in Criminal Appeal No.35 of 2012 and he

emphasized he relied upon paragraph Nos. 10 and 11 which

read as under:-

“10. At this juncture, it would be fit to reproduce the provisions of

section 118 and section 139 of the Negotiable Instruments Act

which read as under.

“118 - Presumptions as to Negotiable Instruments:- Until the

contrary is proved, the following presumptions shall be made:

—

(a) of consideration—that every negotiable instrument was

made or drawn for consideration, and that every such

instrument, when it has been accepted, indorsed, negotiated

or transferred, was accepted, indorsed, negotiated or

transferred for consideration;

(b) as to date—that every negotiable instrument bearing a

date was made or drawn on such date;

(c) as to time of acceptance—that every bill of exchange was

accepted within a reasonable time after its date and before

its maturity;

(d) as to time of transfer—that every transfer of a negotiable

instrument was made before its maturity;

(e) as to order of indorsement—that the indorsements

appearing upon a negotiable instrument were made in the

order in which they appear thereon;

(f) as to stamp—that a lost promissory note, bill of exchange

or cheque was duly stamped;

(g) that the holder of a negotiable instrument is a holder in

due course:

Provided that, where the instrument has been obtained from

its lawful owner, or from any person in lawful custody

thereof, by means of an offence or fraud, or has been

obtained from the maker or acceptor thereof by means of an

offence or fraud, or for unlawful consideration, the burden of

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proving that the holder is a holder in due course lies upon

him.”

139 – Presumption in favour of holder :- It shall be presumed,

unless the contrary is proved, 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.”

11. It is pertinent to note that section 138 of the N.I.Act stipulates

that to constitute an offence under the Act, the complainant must

prove that the cheque was issued by the accused in discharge of a

legally enforceable debt or any other liability and the cheque was

presented into the bank and it was returned unpaid on account of

insufficiency of funds or because it exceeded the amount arranged

to be paid by the drawer of the cheque by an agreement with the

bank. The accused thereafter must have failed to pay the amount of

cheque within 15 days of receipt of the statutory notice and the

presumption as enumerated in section 139 of the N.I.Act is

rebuttable in nature. The complainant is to prove that the cheque

was issued for a legally enforceable debt and the legally

enforceable debt must be in existence on the date when the cheque

was issued and the drawing of the cheque in discharge of the

existing or past liability is a sine qua non for bringing an offence

under section 138 of the N.I.Act.”

5.15 Mr. Parikh, learned counsel for the respondent has also

referred and relied upon the decision of the Hon’ble Apex

Court in the case of Babubhai Ambalal Patel vs. State of

Gujarat reported in 2023(0) AIJEL-HC249100 and more

particularly paragraph Nos. 8 and 12 which read as under:-

“8. The Negotiable Instruments Act including the cheque carries

presumption of consideration as provided under Sections 118(a)

and

139 of the Act, which reads as under:

Section 118 in The Negotiable Instruments Act, 1881 118.

Presumptions as to negotiable instruments. —Until the contrary is

proved, the following presumptions shall be made:—

(a) of consideration —that every negotiable instrument was made

or drawn for consideration, and that every such instrument, when

it has been accepted, indorsed, negotiated or transferred, was

accepted, indorsed, negotiated or transferred for consideration;

Section 139 in The Negotiable Instruments Act, 1881

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139. Presumption in favour of holder.—It shall be presumed, unless

the contrary is proved, 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.

12. It has transpired in evidence of the witness namely

Hasmukhbhai Jashubhai Patel, who is the Bank Manager of the

concerned Bank, that the letter dated 04.05.2006 was addressed by

the accused to the concerned bank about cheque being lost.

Though the statutory presumption under Sections 118 (a) and 139

of the Act, is available in favour of the complainant, the burden was

upon the accused. However, with specific defence of loss of

cheque, the presumption drawn in favour of the complainant , in

my opinion, stood rebutted. At one stage, in the cross-examination

of the Bank Manager who has entered the witness box, has

admitted that the details entered in the cheque and the signature

put in the disputed cheuqe varies. So far as the submissions made

by learned advocate for the appellant with regard to shifting of the

burden to establish the case beyond reasonable doubt by the

complainant is concerned, the Court finds support from the

decision of the Hon’ble Supreme Court in the case of Tedhi Singh

(supra) as relied upon by learned advocate for the appellant. The

relevant observations of the aforesaid decision, has reproduced as

under:

“9. The Trial Court and the First Appellate Court have noted

that in the case under Section 138 of the N. I. Act the

complainant need not show in the first instance that he had

the capacity. The proceedings under Section 138 of the N. I.

Act is not a civil suit. At the time, when the complainant

gives his evidence, unless a case is set up in the reply notice

to the statutory notice sent, that the complainant did not

have the wherewithal, it cannot be expected of the

complainant to initially lead evidence to show that he had

the financial capacity. To that extent the Courts in our view

were right in holding on those lines. However, the accused

has the right to demonstrate that the complainant in a

particular case did not have the capacity and therefore, the

case of the accused is acceptable which he can do by

producing independent materials, namely, by examining his

witnesses and producing documents. It is also open to him to

establish the very same aspect by pointing to the materials

produced by the complainant himself. He can further, more

importantly, achieve this result through the cross

examination of the witnesses of the complainant. Ultimately,

it becomes the duty of the Courts to consider carefully and

appreciate the totality of the evidence and then come to a

conclusion whether in the given case, the accused has shown

that the case of the complainant is in peril for the reason

that the accused has established a probable defence.”

5.16 Over and above the above cited decisions, Mr.

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Parikh, learned counsel for the respondent has also

referred and relied upon the following decisions:-

1.B. Krishna Reddy vs. Syed Hafeez (Died) Per Legal

Representative Naseema Begum and another reported in

(2020) 17 SCC 488.

2.Nalinbhai H Vyas Food Inspector vs. Kishorbhai

Ghelaram Khushlani For Paris Confectionary Works

reported in 2024 AIJEL-HC 249388 – Parameters (2007)

4 SCC 415 followed and same is followed in 2009 (0)

AIJEL-HC 222261 by appellate court.

3.Rajco Steel Enterprises vs. Kavita Saraff and another

reported in (2024) 9 SCC 390

4.Sureshchandra Chandrashankar Joshi vs. State of

Gujarat reported in 2010 (1) GLH 271

5.Shanku Concretes Private Limited vs. State of Gujarat

reported in 2000 (2) GLR 1705

6.Chandrappa and others vs. State of Karnataka reported

in (2007) 4 SCC 415

7.Reverend Mother Mary Kutty vs. Reni C. Kottaram and

another reported in (2013) 1 SCC 327.

8.Pukharaj Achaldas (The Proprietor of the Firm) vs.

Kantilal Bhimraj Shah (Proprietor of Firm) reported in

2021(0) AIJEL.HC 243542

6. Upon hearing learned counsel appearing for both the sides

and on perusal of the impugned judgment and order of

acquittal passed by the First Appellate Court and the

conviction order passed by the Trial Court and upon close

examination of the depositions of the witnesses recorded by

the First Appellate Court, the issues that arise for

determination by this Court are as below:

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Whether the First Appellate Court was right and justified

in reversing the judgment rendered by the Trial Court in

the facts of the present case;

Whether the First Appellate Court while reversing the

impugned judgment and order of the Trial Court has

committed any illegality or any perversity;

Whether the First Appellate Court failed to appreciate

the reasoning recorded by the Trial Court while

recording the conviction against the present respondent;

Whether the impugned judgment passed by the First

Appellate Court suffers from any illegality or any

perversity;

7.Now, in light of the above-mentioned issue, the facts of

the case are required to be looked into that the present

respondent was the Managing Trustee of Tapasvi Charitable

Trust, which was established in the year 2000 with several

trustees for the purpose of running a de-addiction centre. The

Trust was functioning through public donations and

government grants. The de-addiction centre was being

operated from the premises known as Mamta Hospital, which

is owned by the present appellant. Initially, the Trust was

functioning smoothly under the administration of the present

respondent with the assistance of the other trustees.

However, over a period of time, the financial condition of the

Trust deteriorated. Consequently, it was decided to induct

new trustees into the Trust with a view to strengthening its

administration and financial management.

8.Thereafter, owing to his ill health, the present

respondent handed over the administration of the Trust to the

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other trustees, namely, the wife of the present appellant,

along with two other trustees, namely Mr. Vijay Kumar Patel

and Mr. Manoj B. Rao. Thereafter, in the year 2005, the

present appellant, along with Mr. Vijay Kumar Patel and Mr.

Manoj B. Rao, executed a Memorandum of Understanding,

which is produced at Exhibit 21. The said Memorandum of

Understanding, inter alia, records as under:

“MEMORANDUM OF UNDERSTANDING

We, the undersigned Managing Trustee of Tapasvi Seva Charitable

Trust, Nadiad, and the parties of Jagrut Vyasan Mukti Hospital…

First

Party:

(1) Smt. Janvikaben Harishbhai Purohit

107, Krishna Township, Vaniyavad, Nadiad

Second

Party:

(1) Dr. Harshadbhai Y. Kamle

Mamta Hospital, Nadiad.

(2) Dr. Vijaykumar A. Patel

14, Jalaramdeep Society, Kapadvanj Road,

Nadiad.

(3) Manojbhai B. Rao, Nadiad

We, both parties, through a mutual understanding on 01/02/2005,

in accordance with Resolution No. 24 of the trust meeting, have

appointed you, the Second Party for the overall administration and

management of Jagrut Vyasan Mukti Hospital, run by Tapasvi Seva

Charitable Trust. This appointment is made subject to the following

conditions, which are binding, accepted, and approved by both

parties.

(i) Jagrut Vyasan Mukti Hospital, run by Tapasvi Seva Charitable

Trust, shall be considered a separate unit. All government aid,

public donations, and funds generated through other means

received for it, as well as the entire management, administration,

and bank financial transactions, shall be carried out by the Second

Party.

(ii) The Second Party has accepted the following financial

liabilities. Payments shall be made from government aid received

hereafter as well as from remaining past grant balances:

(a) 1,50,000 Rent (a) 1,50,000

(b) 50,000 To Dr. Kamle (towards (b) 50,000

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personal loan taken by

First Party)

(c) 2,00,000 To Sashiben Kamle (c) 2,00,000

(d) 3,50,000 To Raghubhai Patel (d) 3,50,000

(e) 2,70,000 To Dr. Vijaybhai Patel (e) 2,70,000

(f) 2,30,000 To Manojbhai Rao (f) 2,30,000

12,50,000 Twelve Lakh Fifty

Thousand Rupees

12,50,000

(iii) Other than those specified above, the Second Party shall have

no other financial liability. Any financial, social, or other liabilities

related to the trust or hospital prior to 01/02/2005 shall not be the

responsibility of Party-2.

(iv) Independent authority for the management and administration

of Jagrut Vyasan Mukti Center (Hospital) is granted to Party-2 from

01/02/2005 onwards.

(v) Necessary proceedings shall be initiated in the Charity

Commissioner's office to appoint the Second Party members as

honorary members of the Tapasvi Seva Charitable Trust.

(vi) Out of clause (illegible), Rs. 30,000/- shall be treated as

common expenses upon receipt of the grant and accounted for

accordingly.

(vii) All the above liabilities will be accepted upon receipt of the

grant. This agreement is executed while the hospital’s current

grant is active, and no instructions have been received from the

government to close the hospital to date. Full cooperation shall be

provided to secure the hospital grant. Audit has been conducted

recently and the hospital must continue operating as per the

instructions (as per manual).

The above facts and (illegible) have been agreed upon with

everyone's consent, which shall remain binding upon all.

(1) Sd/-

(2) Sd/-

(3) Sd/-

Sd/-

16/03/2005”

9. After the execution of the aforesaid Memorandum of

Understanding, the responsibility for running the Trust and

bearing its day-to-day expenses, including payment of rent

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and other liabilities, was transferred to the newly inducted

trustees, who were the parties of the Second Part under the

Memorandum of Understanding. The said Memorandum of

Understanding came into force with effect from 01.02.2005.

10.Pursuant to the said Memorandum of Understanding, a

letter issued by Jagrut Vyasan Mukti Hospital, which was

being run by the present respondent through Tapasvi

Charitable Trust, is produced at Exhibit 23. By the said letter,

Mr. Vijay A. Patel, the addressee/assignee thereof, informed

the present respondent that the newly inducted trustees had

already assumed the responsibility of managing the Trust and

the de-addiction centre. It was further stated that, for the

purpose of day-to-day administration, they were required to

sign various documents, including cheques and other financial

instruments. However, as the present respondent continued to

be the authorised signatory in the bank records, the

respondent was requested to issue a consent letter

authorising the said assignee to operate the bank account and

sign the relevant documents on behalf of the Trust.

11.The said letter is produced at Exhibit 23, at page 129 of

the paper book, and reads as under:

“C.C. NO. 4509/06

Exhibit No. : 23

Signature : Illegible

Judi. First Class

JAGRUT VYASAN MUKTI HOSPITAL

(Unit of Tapasvi Seva Charitable Trust Regd. No. E/5541/ Kheda)

Funded by Min. of Social Justice & Empowerment, Govt. of India.

Hospital Address: Mamta Hospital Building, Nana Kumbhnath

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Road, Nadiad - 387001

Email : tsctd1@ncdap.org, Ph 0268-3091309 (Hosp.) 0268-2527166

Ref No:

Date: 08/05/2005

Dr. Vijaykumar Patel

Dr. H. U. Kamle

To,

Smt. Janvikaben

Managing Trustee

Subject: Regarding handing over independent financial

management for bank transactions in Jagrut Vyasan Mukti

Hospital Account No. 50038.

Respected Madam,

It is respectfully submitted that, we have undertaken the

guarantee to run the hospital along with the responsibility of

paying expenses at the hospital. However, we are unable to handle

the financial administration independently without your signature.

Therefore, it is requested you to cancel your mandatory signature

requirement and grant us independent financial management in

writing, so that bank transactions and other work can proceed

smoothly.

Yours faithfully,

1. Signature : Illegible

2. Signature : Illegible”

12. Thereafter, the newly inducted trustees addressed a letter

dated 13.07.2005 to the Manager, State Bank of India, Saloon

Bazaar Branch, Nadiad, which is produced at Exhibit 24. By

the said letter, they informed the Bank that they intended to

withdraw certain amounts from the Trust's current account to

meet its day-to-day administrative and operational expenses.

Similarly, another letter dated 10.06.2005, produced at

Exhibit 25, was also issued by the said trustee, namely, Mrs.

Vijaya Patel, concerning the administration and operation of

the Trust.

13. In the backdrop of the aforesaid facts, the present

appellant obtained a personal cheque for Rs. 6,50,000/- from

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the present respondent. According to the notice issued by the

appellant, the said amount represented the aggregate of

various sums allegedly advanced by the appellant and his wife

for the administration of the Trust, namely: (i) Rs. 50,000/-

allegedly advanced by the present appellant in the year 2005

for the administration of the Trust; (ii) Rs. 2,00,000/- allegedly

advanced by the wife of the present appellant; (iii) a further

sum of Rs. 50,000/- allegedly advanced by the wife of the

present appellant, Mrs. Shashiben, who was also a trustee and

was in charge of the administration of the Trust; and (iv) Rs.

1,50,000/- allegedly paid towards the rent of the premises in

which the de-addiction centre of the Trust was being

operated.

14. Thus, the personal cheque of the present respondent came

to be obtained by the present appellant on the premise that

the aforesaid amounts were recoverable from the respondent,

although the liabilities pertained to the administration and

functioning of the Trust after its management had been

handed over to the newly inducted trustees.

15. Admittedly, the liability to pay the rent was that of the

Trust. A perusal of the documentary evidence produced at

Exhibits 26 to 35 reveals that these are rent receipts issued by

the present appellant in favour of Tapasvi Charitable Trust,

acknowledging receipt of Rs.10,000/- towards monthly rent.

The said rent was admittedly paid by Mr. Vijay Kumar A.

Patel, who was the Project Director of Jagrut Vyasan Mukti

Hospital and who had assumed the responsibility of managing

the Trust pursuant to the Memorandum of Understanding.

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The said Memorandum was executed by, inter alia, Mr. Vijay

Kumar A. Patel and Mrs. Shashiben, the wife of the present

appellant. Thus, the documentary evidence clearly establishes

that the liability to pay the rent, as well as the other liabilities

referred to in the Memorandum of Understanding, was that of

the Trust and not of the present respondent in her personal

capacity. According to the appellant, an aggregate sum of

Rs.6,50,000/- had become due and payable towards the Trust.

However, instead of obtaining a cheque from the Trust, the

present appellant obtained a personal cheque from the

present respondent, drawn on her personal bank account. The

said cheque, upon presentation, came to be dishonoured by

the Bank on the ground of "insufficient funds." and returned

vide return memo dated 07.06.2006.

16. Consequently, the present appellant issued a statutory

legal notice dated 28.06.2006, which is produced at Exhibit 17

(page 103 of the paper book). In the said notice, it was

specifically stated that the outstanding rent of Rs.1,50,000/-

for the year 2005 formed part of the consolidated claim of

Rs.6,50,000/-. By clubbing the alleged advances and the rent

dues, the appellant demanded payment of the total sum of

Rs.6,50,000/- from the present respondent. The notice further

asserted that, although the amount was allegedly due and

recoverable in connection with the affairs of the Trust, the

present respondent had issued, in her personal capacity, a

cheque bearing the said amount, drawn on Bank of Baroda,

Kothi Branch, Vadodara, which was received by the appellant

on 01.06.2006.

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17. The said notice was duly served upon the present

respondent, who submitted a detailed reply, which is

produced at Exhibit 20. In the said reply, the respondent

specifically stated that, with effect from 01.02.2005, she had

ceased to be in charge of the administration of the Trust and

was no longer responsible for its day-to-day affairs. It was

further pointed out that, by virtue of the Memorandum of

Understanding produced at Exhibit 21, the present appellant,

along with Mr. Vijay Kumar A. Patel and Mr. Manoj B. Rao,

had accepted and undertaken the responsibility for managing

the Trust and discharging its liabilities.

18. The respondent further referred to the correspondence

exchanged pursuant to the said Memorandum of

Understanding, including the letter requesting the respondent

to issue her consent for changing the authorised signatory in

the bank records, as well as the letters produced at Exhibits

24 and 25 addressed by the newly authorised trustees to the

Manager, State Bank of India, Saloon Bazaar Branch, Nadiad,

seeking permission to operate the Trust's bank account and to

withdraw amounts required for the day-to-day administration

of the Trust. The respondent, therefore, categorically asserted

that the liabilities referred to in the statutory notice were

those of the Trust and the persons who had taken over its

management under the Memorandum of Understanding, and

not her personal liabilities. The respondent also produced

copies of the rent receipts issued by the present appellant

acknowledging payment of rent deposited by Dr. Vijay Kumar

Patel, who was a signatory to the Memorandum of

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Understanding and had been inducted as a trustee of Tapasvi

Charitable Trust. The said receipts demonstrate that Dr. Vijay

Kumar Patel had paid the rent for the relevant period in

accordance with the responsibilities assumed under the

Memorandum of Understanding.

19. A perusal of the exhibited rent receipts further reveals

that, for the period from June 2004 to March 2005, the

present appellant had accepted the rent in cash and had

issued corresponding receipts. Even during the year 2005, the

appellant acknowledged receipt of the rent by issuing duly

stamped revenue receipts.

20. During his cross-examination before the Trial Court, the

present appellant admitted that the signatures appearing on

the said revenue receipts were of him, and that he had issued

those receipts acknowledging the rent. However, he sought to

qualify his admission by stating that, although he had signed

and issued the revenue receipts, he had not actually received

the amounts mentioned therein. Such a stand taken by the

appellant is wholly inconsistent with the documentary

evidence on record, as the issuance of duly signed revenue

receipts acknowledging receipt of rent prima facie establishes

that the rent was accepted by the appellant.

21.This conduct itself is doubtful, inasmuch as, without

receiving the amount of rent, whether any prudent person

would issue a revenue receipt in advance. It is an admitted

fact that, with effect from 01.02.2005, the present respondent

had no liability whatsoever towards the administration of the

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Trust, as the charge of the Trust had subsequently been taken

over by the newly inducted trustees, including the wife of the

present appellant and two others. Therefore, the liability to

pay the said amount cannot be fastened upon the present

respondent. However, without considering these facts, the

Trial Court has recorded the conviction against the present

respondent.

22. The further fact required to be mentioned is that the

amount shown as due and payable by the present respondent

includes the amount allegedly advanced by the wife of the

present appellant, for which the wife has neither issued any

legal notice nor demanded the said amount from the present

respondent. Whereas, the said amount was not at all payable

to the present appellant. However, in the legal notice, it was

mentioned that the amount advanced by his wife was also

included in the total amount of Rs.6,50,000/-. Without

examining his wife as a witness, this fact cannot be proved,

namely, whether such amount was in fact advanced by the

wife, whether she had issued any legal notice, or whether the

present respondent was liable to repay the said amount.

23. It is also further to be noted that the amount which is due

and payable towards the rent for the premises used by the

Trust is the liability of the trustees of the Trust. Therefore,

without joining all the trustees, the prosecution has been

instituted only against the present respondent. It appears that

the cheque of the present respondent was obtained, and since

the cheque bore the signature of the present respondent, the

remaining particulars in the cheque were either filled in by

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the present appellant. The Trial Court has also not examined

this aspect, namely, that except for the signature appearing

on the cheque, the remaining writings on the cheque were not

examined. The Trial Court has failed to consider or adjudicate

upon this aspect.

24. At this stage, it is appropriate to refer the provision of

Sections 138, 118, 139 and 141 of the NI Act, which read as

under:-

“138. Dishonour of cheque for insufficiency, etc., of funds in

the account.—Where any cheque drawn by a person on an

account maintained by him with a banker for payment of any

amount of money to another person from out of that account for

the discharge, in whole or in part, of any debt or other liability, is

returned by the bank unpaid, either because of the amount of

money standing to the credit of that account is insufficient to

honour the cheque or that it exceeds the amount arranged to be

paid from

that account by an agreement made with that bank, such person

shall be deemed to have committed an offence and shall, without

prejudice to any other provision of this Act, be punished with

imprisonment for [a term which may be extended to two years’], or

with fine which may extend to twice the amount of the cheque, or

with both:

Provided that nothing contained in this section shall apply unless—

(a) thecheque has been presented to the bank within a period of six

months from the date on which it is drawn or within the period of

its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case

may be, makes a demand for the payment of the said amount of

money by giving a notice; in writing, to the drawer of the cheque,

[within thirty days] of the receipt of information by him from the

bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said

amount of money to the payee or, as the case may be, to the holder

in due course of the cheque, within fifteen days of the receipt of the

said notice.

Explanation.—For the purposes of this section, “debt of other

liability” means a legally enforceable debt or other liability.

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118. Presumptions as to negotiable instruments. —Until the

contrary is proved, the following presumptions shall be made:—

(a) of consideration:—that every negotiable instrument was made

or drawn for consideration, and that every such instrument, when

it has been accepted, indorsed, negotiated or transferred, was

accepted, indorsed, negotiated or transferred for consideration;

(b) as to date:—that every negotiable instrument bearing a date

was made or drawn on such date;

(c) as to time of acceptance:—that every accepted bill of exchange

was accepted within a reasonable time after its date and before its

maturity;

(d) as to time of transfer:—that every transfer of a negotiable

instrument was made before its naturity;

(e) as to order of indorsements:—that the indorsements appearing

upon a negotiable instrument were made in the order in which they

appear then on;

(f) as to stamp:— that a lost promissory note, bill of exchange or

cheque was duly stamped;

(g) that holder is a holder in due course:—that the holder of a

negotiable instrument is a holder in due course: provided that,

where the instrutment has been obtained from its lawful owner, or

from any person in lawful custody thereof, by means of an offence

or fraud, or has been obtained from the maker or acceptor thereof

by means of an offence or fraud, or for unlawful consideration, the

burden of proving that the holder is a holder in due course lies

upon him.

139. Presumption in favour of holder. —It shall be presumed,

unless the contrary is proved, that the holder of a cheque received

the cheque of the nature referred to in section138 for the

discharge, in whole or in part, of any debt or other liability.

141. Offences by companies.—( 1) If the person committing an

offence under section 138 is a company, every person who, at the

time the offence was committed, was in charge of, and was

responsible to, the company for the conduct of the business of the

company, as well as the company, shall

be deemed to be guilty of the offence and shall be liable to be

proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render

any person liable to punishment if he proves that the offence was

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committed without his knowledge, or that he had exercised all due

diligence to prevent the commission of such offence:

[Provided further that where a person is nominated as a Director of

a company by virtue of his holding any office or employment in the

Central Government or State Government or a financial

corporation owned or controlled by the Central Government or the

State Government, as the case may be, he shall not be liable for

prosecution under this Chapter.]

(2) Notwithstanding anything contained in sub-section (1), where

any offence under this Act has been committed by a company and it

is proved that the offence has been committed with the consent or

connivance of, or is attributable to, any neglect on the part of, any

director, manager, secretary or other officer of the company, such

director, manager, secretary or other officer shall also be deemed

to be guilty of that offence and shall be liable to be proceeded

against and punished accordingly.

Explanation.—For the purposes of this section, —

(a) “company” means any body corporate and includes a firm or

other association of individuals; and

(b) “director”, in relation to a firm, means a partner in the firm.”

25. In view of the above, the question arises as to whether

there was any legally enforceable debt against the present

respondent. In the absence of the necessary facts required to

be proved by corroborative evidence, the Trial Court has

committed a serious error of law as well as on facts. It is also

required to be noted herein that the Trial Court, while passing

the impugned judgment of conviction against the present

respondent, failed to consider the fact that, in criminal

jurisprudence, there is no provision of residuary capacity

whereby a person can recover an amount on behalf of a third

person. In the present case, the appellant is seeking to

recover the amount on behalf of his wife.

26. At this juncture, it is also required to be noted herein that

from 2000 to 2005 following income tax slab was in

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operation:-

Up to Rs.50,000 : Nil (Tax-free)

Rs. 50,001 to Rs. 60,000 : 10% of the amount exceeding

Rs. 50,000

Rs. 60,001 to Rs.1,50,000 : Rs. 1,000 + 20% of the amount

exceeding Rs. 60,000

Above Rs. 1,50,000: : Rs.19,000 + 30% of the

amount exceeding Rs.1,50,000

27.In view of the above facts, if the wife of the appellant

had advanced Rs.2,00,000/- in cash in the year 2005, it was

not a small amount, and for such an amount, the same was

required to be reflected in the income tax records. In this

regard, the appellant was examined, and in response to the

said question, he replied that whether the amount was

mentioned he was not aware about it. It was further stated

that the account books and other account-related documents

maintained by the wife of the present appellant were lost due

to theft, and an FIR in that regard was registered in the year

2007. However, the said FIR, which was referred to by the

appellant, was not produced before the Court to establish that

the account books and other relevant documents were lost

due to theft.

28. Further, in his cross-examination, the appellant

specifically stated and contended that he did not want to

examine his wife as a witness, nor did he want to produce any

documents to show whether the said amount was reflected in

the account books or not. However, the Trial Court, without

considering this aspect, proceeded to pass the impugned

judgment and order of conviction, whereby the present

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respondent was convicted for the alleged offence.

29. Even without joining the other trustees, the complaint

itself was not maintainable, for which learned counsel Mr.

Buch has relied upon the judgment of the Hon’ble Apex Court

in the case of Mr. Bijoy Kumar Moni (supra) more

particularly the observations made in paragraph 52 of the said

judgment which read as under.

“52.Section 138 of the NI Act does not envisage that only those

cases where a cheque issued towards the discharge of the personal

liability of the drawer towards the payee gets dishonoured would

come within the ambit of the provision. The expression “of any debt

or other liability” appearing in Section 138 when read with the

Explanation to the provision is wide enough to bring any debt or

liability which is legally enforceable within its fold. Thus, the

requirement under the provision is that the debt or any other

liability has to be legally enforceable and the emphasis is not on

the existence of such debt or other liability between the drawer

and the payee. A number of decisions of this Court have clarified

that even those cases where a person assumes the responsibility of

discharging the debt of some other person, and in furtherance

thereof draws a cheque on an account maintained by him, which

subsequently gets dishonoured upon being presented before the

drawee, would be covered by Section 138 if the payee is able to

establish that there was some sort of an arrangement by way of

which the debt was assumed by the drawer.”

30.I am in agreement with the ratio laid down by the

Hon’ble Apex Court, wherein the learned counsel for the

appellant, relying upon the observations made by the Hon’ble

Apex Court, submitted that the expression “any debt or other

liability” is required to be considered. Since the present

respondent was not under any actual debt, but the cheque

was issued towards some other liability, the question arises

before this Hon’ble Court as to whether, in respect of such

other liability, when the said liability was accepted by the

other trustees, the present respondent can be held liable and

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guilty for the same. This important issue was not considered

by the Trial Court while recording the conviction against the

present respondent.

31. Thus, the First Appellate Court, while reversing the

judgment of the Trial Court, has observed from paragraph No.

9 onwards that the present respondent was not liable and that

no legally enforceable debt was established against the

present respondent by the appellant. Therefore, in the

absence of the other trustees of the Charitable Trust, the

complaint itself was not maintainable, particularly because,

after 01.02.2005, the liability was taken over by the assignees

under the said document, i.e., Exhibit 21.

32.The First Appellate Court, after considering all the

documentary as well as oral evidence produced by the

appellant, has discussed in detail the reasons for reversing the

findings recorded by the Trial Court. The First Appellate

Court, after considering the evidence on record and the

decisions of the Hon’ble Apex Court, has rightly arrived at the

conclusion while reversing the judgment of the Trial Court.

33. At this stage, it is appropriate to refer the decision of the

Hon’ble Apex Court in case of Kamala S. vs. Vidhyadharan

M.J. and Anr. Reported in 2008(1) GLR 423 more

particularly head note and paragraph Nos. 4, 17 and 18.

“Heard note:-

Negotiable Instruments Act, 1881 (XXVI of 1881) Sec. 118(a),Secs.

138 & 139- Presumption that the cheque was issued for discharge

of "any debt or other liability" -Burden of proof in the matter on the

accused to rebut the presumption is of "preponderance of

probability" - Inference therefor can be drawn from the

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circumstances -On facts found that defence of accused was

probable -Held, High Court had wrongly reversed the acquittal.

4. According to the appellant, Smt. Sathyabhama owned a property

bearing old Survey No. 1363/3-1-1 measuring an area of 47 cents.

She had executed two Sale Deeds, one in favour of Mr.

Ramchandran Nair and another in favour of Thankamony

conveying to them 20 cents and 27 cents respectively. The Sale

Deeds were allegedly executed in favour of the aforementioned

persons as a security in lieu of some amount paid in her favour.

However, when the Thankamony and Ramchandran Nair demanded

the money back from the wife of the respondent, the appellant was

approached for purchase of the said property for a consideration of

Rs. 5 lakhs. On 05.09.1997, the said Thankmony executed a Deed

for Sale in favour of the appellant wherefor she had withdrawn a

sum of Rs. 4 lakhs from bank. The said amount was paid to

Sathyabhama which in turn was paid to Thankamony and

Ramchandran Nair. However, as there was a dispute in regard to

the exact area of the property and measurement therefor had not

been taken, she had given a cheque to Sathyabhama in the name of

her husband as demanded by Sathyabhama on an understanding

that the consideration shall be reduced if the area found in the Sale

Deed is found short. As upon measurement, the area of the

property conveyed in his favour was found to be short by 4 cents,

the appellant paid a sum of Rs. 20,000/- to the respondent on

27.11.1997. Allegedly, however the respondent had asked for a

sum of Rs. 10,000/- more from the appellant, but a sum of Rs.

5,000/- was only given to him on 18.12.1997 towards full and final

settlement thereof and in that view of the matter no further amount

was due from her.

8. On the said finding, the learned Trial Judge recorded a judgment

of acquittal. On an appeal preferred by the respondent herein

thereagainst, the High Court, however, reversed the said finding,

opining that the appellant had not been able to discharge the

burden of proof laid down under Sections 138 and 139 of the Act,

which read as under :

"138. Dishonour of cheque for insufficiency, etc., of

funds in the account.Where any cheque drawn by a

person on an account maintained by him with a banker

for payment of any amount of money to another person

from out of that account for the discharge, in whole or

in part, of any debt or other liability, is returned by the

bank unpaid, either because of the amount of money

standing to the credit of that account is insufficient to

honour the cheque or that it exceeds the amount

arranged to be paid from that account by an agreement

made with that bank, such person shall be deemed to

have committed an offence and shall, without prejudice

to any other provision of this Act, be punished with

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imprisonment for a term which may extend to two

years, or with fine which may extend to twice the

amount of the cheque, or with both:

Provided that nothing contained in this section shall apply

unless

(a) the cheque has been presented to the bank within a

period of six months from the date on which it is drawn

or within the period of its validity, whichever is earlier.

(b) the payee or the holder in due course of the cheque,

as the case may be, makes a demand for the payment of

the said amount of money by giving a notice, in writing,

to the drawer of the cheque, within thirty days of the

receipt of information by him from the bank regarding

the return of the cheque as unpaid, and

(c) the drawer of such cheque fails to make the payment

of the said amount of money to the payee or, as the case

may be, to the holder in due course of the cheque,

within fifteen days of the receipt of the said notice.

Explanation.For the purposes of this section, "debt or other

liability" means a legally enforceable debt or other liability."

"139. Presumption in favour of holder.It shall be presumed, unless

the contrary is proved, 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, or any debt or other liability."

17. This Court clearly laid down the law that standard of proof in

discharge of the burden in terms of Section 139 of the Act being of

preponderance of a probability, the inference therefor can be

drawn not only from the materials brought on record but also from

the reference to the circumstances upon which the accused relies

upon. Categorically stating that the burden of proof on accused is

not as high as that of the prosecution, it was held;

"33. Presumption drawn under a statute has only an

evidentiary value. Presumptions are raised in terms of the

Evidence Act. Presumption drawn in respect of one fact may

be an evidence even for the purpose of drawing presumption

under another."

18. It was further observed that ;

" 38. If for the purpose of a civil litigation, the defendant

may not adduce any evidence to discharge the initial burden

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placed on him, a "fortiori" even an accused need not enter

into the witness box and examine other witnesses in support

of his defence. He, it will bear repetition to state, need not

disprove the prosecution case in its entirety as has been held

by the High Court.

39. A presumption is a legal or factual assumption drawn

from the existence of certain facts."

34. It is also appropriate to refer the decision of the Hon’ble

Apex Court in case of Sureshchandra Chandrashankar

Joshi vs. State of Gujarat and Anr. reported in 2010(1)

GLR 271 more particularly paragraph Nos. 11 and 12 and the

decision in case of Shanku Concretes Pvt. Ltd. and Others

vs. State of Gujarat and Another reported in 2000(3)

Crimes 602.

35. Even as per the decision of the Hon’ble Apex Court in

the case of Babubhai (supra), the accused has been successful

in bringing on record a probable defence, which has

ultimately resulted in the shifting of the burden upon the

complainant by putting questions regarding legal dues in the

cross-examination.

36. On perusal of the record of the appeal, it transpires that

the respondent-accused has established his innocence before

the First Appellate Court and that, after due appreciation of

the oral as well as documentary evidence and other material

placed on record, the First Appellate Court has rightly passed

the impugned judgment and order of acquittal. The findings

recorded by the First Appellate Court are just, proper and in

accordance with the settled principles of law and, therefore,

no interference is warranted by this Court.

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37.It is well settled by catena of decisions that the First

Appellate Court has full power to review, re-appreciate and

reconsider the evidence upon which the order of acquittal is

founded. However, First Appellate Court 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 their innocence is further reinforced,

reaffirmed and strengthened by the trial Court.

38.Further, if two reasonable conclusions are possible on

the basis of the evidence on record, the First Appellate Court

should not disturb the finding of acquittal recorded by the

trial Court. Further, while exercising the powers in appeal

against the order of acquittal, the Court of appeal would not

ordinarily interfere with the order of acquittal unless the

approach of the lower Court is vitiated by some manifest

illegality and the conclusion arrived at would not be arrived at

by any reasonable person and, therefore, the decision is to be

characterized as perverse. Merely because two views are

possible, the Court of appeal would not take the view which

would upset the judgment delivered by the Court below.

However, the First Appellate Court has a power to review the

evidence if it is of the view that the conclusion arrived at by

the Court below is perverse and the Court has committed a

manifest error of law and ignored the material evidence on

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record. A duty is cast upon the First Appellate Court, in such

circumstances, to re-appreciate the evidence to arrive to a

just decision on the basis of material placed on record to find

out whether the accused are connected with the commission

of the crime with which he is charged.

39.At this stage, it is appropriate to refer the decision of the

Hon’ble Apex Court in the case of Dattatraya vs.

Sharanappa reported in (2024) 8 SCC 573, wherein the

Hon’ble Apex Court has observed as under:-

“33.1 Criminal jurisprudence emphasises on the fundamental

essence of liberty and presumption of innocence unless proven

guilty. This presumption gets emboldened by virtue of concurrent

findings of acquittal. Therefore, this court must be extra-cautious

while dealing with a challenge against acquittal as the said

presumption gets reinforced by virtue of a well-reasoned

favourable outcome. Consequently, the onus on the prosecution

side becomes more burdensome pursuant to the said double

presumption.

33.3 Where two views are possible, then this Court would not

ordinarily interfere and reverse the concurrent findings of

acquittal. However, where the situation is such that the only

conclusion which could be arrived at from a comprehensive

appraisal of evidence, shows that there has been a grave

miscarriage of justice, then, notwithstanding such concurrent view,

this Court would not restrict itself to adopt an oppugnant view.

33.4 To adjudge whether the concurrent findings of acquittal are

‘perverse’ it is to be seen whether there has been failure of justice.

This Court in Babu v. State of Kerala clarified the ambit of the term

‘perversity’ as:

“20…...if the findings have been arrived at by ignoring or

excluding relevant material or by taking into consideration

irrelevant/admissible material. The finding may also be said

to be perverse if it is ‘against the weight of evidence’, or if

the finding so outrageously defies logic as to suffer from the

vice of irrationality.”

33.6 Furthermore, such interference is necessitated to safeguard

interests of justice when the acquittal is based on some irrelevant

grounds or fallacies in re- appreciation of any fundamental

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evidentiary material or a manifest error of law or in cases of non-

adherence to the principles of natural justice or the decision is

manifestly unjust or where an acquittal which is fundamentally

based on an exaggerated adherence to the principle of granting

benefit of doubt to the accused, is liable to be set aside. Say in

cases where the court severed the connection 12 (2023) 10 SCC

148. between accused and criminality committed by him upon a

cursory examination of evidences. [Vide State of Punjab v.

Gurpreet Singh and Others and Rajesh Prasad v. State of Bihar]

34. Upon perusal of the aforementioned principles and applying

them to the facts and circumstances of the present matter, it is

evident that there is no perversity and lack of evidence in the case

of the respondent- accused. The concurrent findings have backing

of detailed appraisal of evidences and facts, therefore, do not

warrant interference in light of above enlisted principles. In a

similar set of facts as in the present case, involving criminal

liability arising out of dishonour of cheque, this Court in M/s Rajco

Steel Enterprises v. Kavita Saraff dejected from reversing the

concurrent findings of acquittal of the accused therein and

underscored the principle of non-interference, unless such findings

are perverse or bereft of evidentiary corroboration or lacks

question of law.”

40. It is appropriate to refer the decision of the Hon’ble Apex

Court in the case of Rajco Steel Enterprises vs. Kavita

Saraff and another reported in (2024) 9 SCC 390,

wherein the Hon’ble Apex Court has observed as under:-

“12. We are dealing with a case where the First Appellate Court

exercising its jurisdiction under Section 374(3) of Code of Criminal

Procedure, 1973, ongoing through the analysis of evidence,

acquitted the accused/respondent no.1. The acquittal was further

upheld by the High Court in an appeal against acquittal under

Section 378 of the 1973 Code. The whole question involved in this

proceeding is as to whether the cheques were issued in discharge

of a debt and if it was so, then whether the accused/respondent

no.1 was able to rebut the presumption in terms of Section 118

read with Section 139 of the 1881 Act. In the light of the judgment

of this Court in the case of Narendra Pratap Narain Singh -vs-

State of U.P. the jurisdiction of this Court under Article 136 of the

Constitution of India to interfere with concurrent findings of fact is

not in question, when such findings are based on no evidence or

are perverse. The question, we have to address thus, is as to

whether the findings of the First Appellate Court and the High

Court are on no evidence or perverse. Both these Courts have

examined the evidence threadbare and in the opinion of these two

fora, go against the complainant/petitioner.”

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41. It is also appropriate to have a glance of the decision of

the Hon’ble Apex Court in the case of Basalingappa vs.

Mudibasappa reported in (2019) 5 SCC 418, Rangappa

vs. Sri Mohan reported in (2010) 11 SCC 441.

42. Further, in case of Babu Sahebagouda Rudragoudar

Vs. State of Karnataka, reported in AIR 2024 SC 2252 =

(2024) 8 SCC 149, the Hon'ble Apex Court has dealt with

the similar issue, more particularly, in paragraph Nos. 37 to

40. Hence, I am in complete agreement with the findings

recorded by the trial Court.

43.It is also worthwhile to refer to the recent decision of the

Hon’ble Supreme Court in the case of Ramesh vs. State of

Karnataka, reported in [2024] 9 SCC 169 , wherein the

Hon’ble Supreme Court has held and observed in paras-20

and 21 as under:-

“20. At this stage, it would be relevant to refer to the general

principles culled out by this Court in Chandrappa and others vs.

State of Karnataka , regarding the power of the appellate Court

while dealing with an appeal against a judgment of acquittal. The

principles read thus:

“42. …. (1) An appellate court has full power to review,

reappreciate and reconsider the evidence upon which the order of

acquittal is founded.

(2) The Code of Criminal Procedure, 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

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nature of “flourishes of language” to emphasize 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.

21. In Rajendra Prasad v. State of Bihar, a three-Judge Bench of

this Court pointed out that it would be essential for the High

Court, in an appeal against acquittal, to clearly indicate firm and

weighty grounds from the record for discarding the reasons of the

Trial Court in order to be able to reach a contrary conclusion of

guilt of the accused. It was further observed that, in an appeal

against acquittal, it would not be legally sufficient for the High

Court to take a contrary view about the credibility of witnesses

and it is absolutely imperative that the High Court convincingly

finds it well-nigh impossible for the Trial Court to reject their

testimony. This was identified as the quintessence of the

jurisprudential aspect of criminal justice. Viewed in this light, the

brusque approach of the High Court in dealing with the appeal,

resulting in the conviction of Appellant Nos. 1 and 2, reversing

the cogent and well-considered judgment of acquittal by the Trial

Court giving them the benefit of doubt, cannot be sustained.”

44.Considering the entire evidence on record, it clearly

appears that there is no credible evidence to connect the

present accused with the alleged crime and the evidence on

record is not so convincing to prove beyond reasonable doubt

that the accused has committed the alleged crime. Therefore,

the accused cannot be convicted on the evidence on record.

45.On perusal of the impugned judgment and order, it

clearly transpires that the First Appellate Court has not

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committed any error of fact and law in appreciating the

evidence on record and in acquitting the accused from the

charges levelled against them. Even on re-appreciation of the

evidence, it clearly transpires that the prosecution has

miserably failed to prove the charge levelled against the

accused beyond reasonable doubt. Therefore, the impugned

judgment and order of the First Appellate Court is sustainable

and the present appeal is liable to be dismissed.

46.In view of the above, the present appeal is devoid of

merits and it deserves to be dismissed. Resultantly, it is

dismissed. The impugned judgment and order of acquittal

passed by the First Appellate Court is hereby confirmed. Bail

bond stands cancelled. Record and proceedings be sent back

to the concerned First Appellate Court forthwith.

Sd/-

(HEMANT M. PRACHCHHAK,J)

SURESH SOLANKI

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