Rohitbhai Jivanlal Patel vs State of Gujarat & Anr.

HELD: 1.1 Ordinarily, the Appellate Court will not be upsetting the judgment of acquittal, if the view taken by Trial Court is one of the possible views of matter and unless the Appellate Court arrives at a clear finding that the judgment of the Trial Court is perverse, i.e., not supported by evidence on record or contrary to what is regarded as normal or reasonable; or is wholly unsustainable in law. Such general restrictions are essentially to remind the Appellate Court that an accused is presumed to be innocent unless proved guilty beyond reasonable doubt and a judgment of acquittal further strengthens such presumption in favour of the accused. However, such restrictions need to be visualised in the context of the particular matter before the Appellate Court and the nature of inquiry therein. The same rule with same rigour cannot be applied in a matter relating to the offence under Section 138 of the Negotiable Instruments Act, 1881, particularly where a presumption is drawn that the holder has received the cheque for the discharge, wholly or in part, of any debt or liability. Of course, the accused is entitled to bring on record the relevant material to rebut such presumption and to show that preponderance of probabilities are in favour of his defence but while examining if the accused has brought about a probable defence so as to rebut the presumption, the Appellate Court is certainly entitled to examine the evidence on record in order to find if preponderance indeed leans in favour of the accused. [Para 11.1] [432-B-F]

1.2 The appellant could not deny his signature on the cheques in question that had been drawn in favour of the complainant on a bank account maintained by the accused for a sum of Rs. 3 lakhs each. The said cheques were presented to the Bank concerned within the period of their validity and were returned unpaid for the reason of either the balance being insufficient or the account being closed. All the basic ingredients of Section 138 as also of Sections 118 and 139 NI Act are apparent on the face of the record. The Trial Court had also consciously taken note of these facts and had drawn the requisite presumption. Therefore, it is required to be presumed that the cheques in question were drawn for consideration and the holder of the cheques i.e., the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the appellant to establish a probable defence so as to rebut such a presumption. On the aspects relating to preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. Though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged under Section 118 and 139 of the NI Act. [Paras 14, 16] [434-D-F; 435-H; 436-A-B]

1.3 In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the Trial Court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the Trial Court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant’s case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant. The aspect relevant for consideration had been as to whether the appellant has brought on record such facts/material/circumstances which could be of a reasonably probable defence. In order to discharge his burden, the accused put forward the defence that in fact, he had had the monetary transaction with the said Shri ‘J’ and not with the complainant. Apart from making certain suggestions in the cross-examination, the appellant has not adduced any documentary evidence to satisfy even primarily that there had been some monetary transaction of himself with Shri ‘J’. Shri ‘J’ was cross-examined on various aspects as regards the particulars in the writing on the stamp paper and the date and time of the transactions. The statement of ‘J’ does not make out any case in favour of the appellant. [Paras 17, 18, 18.3 & 18.4] [437-D-H; 438-G; 439-G-H]

1.4 The appellant could not deny his signatures on the said writing but attempted to suggest that his signatures were available on the blank stamp paper with Shri ‘J’. This suggestion is too remote and too uncertain to be accepted. No cogent reason is available for the appellant signing a blank stamp paper. It is also indisputable that the cheques as mentioned therein with all the relevant particulars like cheque numbers, name of Bank and account number are of the same cheques which form the subject matter of these complaint cases. The said document bears the date 21.03.2007 and the cheques were post-dated, starting from 01.04.2008 and ending at 01.12.2008. No reason to discard this writing from consideration. [Para 18.6] [440-E-F]

1.5 The present one was clearly a case where the decision of the Trial Court suffered from perversity and fundamental error of approach; and the High Court was justified in reversing the judgment of the Trial Court. The observations of the Trial Court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act. The result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not. The other observations as regards any variance in the statement of complainant and witness; or want of knowledge about dates and other particulars of the cheques; or washing away of the earlier cheques in the rains though the office of the complainant being on the 8th floor had also been of irrelevant factors for consideration of a probable defence of the appellant. Similarly, the factor that the complainant alleged the loan amount to be Rs. 22,50,000/- and seven cheques being of Rs. 3,00,000/- each leading to a deficit of Rs. 1,50,000/-, is not even worth consideration for the purpose of the determination of real questions involved in the matter. Significantly, the specific amount of loan (to the tune of Rs. 22,50,000/-) was distinctly stated by the appellant in the aforesaid acknowledgment dated 21.03.2017. The Trial Court appears to have proceeded on a misplaced assumption that by mere denial or mere creation of doubt, the appellant had successfully rebutted the presumption as envisaged by Section 139 of the NI Act. In the scheme of the NI Act, mere creation of doubt is not sufficient. The High Court has conscientiously and carefully taken into consideration the views of the Trial Court and after examining the evidence on record as a whole, found that the findings of the Trial Court are vitiated by perversity. Hence, interference by the High Court was inevitable; rather had to be made for just and proper decision of the matter. [Paras 19-21] [441-D-H; 442-A-D, F]

1.6 The findings of the High Court convicting the appellant for offence under Section 138 of the NI Act are confirmed. In the totality of the circumstances of this case and the nature of offence which is regulatory in nature, the punishment as regards monetary terms calls for no interference but then, the sentence of imprisonment deserve to be modified. The common judgment and order dated 08.01.2018 in R/Criminal Appeal No. 1187/2017 connected with R/Criminal Appeal Nos. 1191/2017 to 1196/2017 by the High Court of Gujarat at Ahmedabad is maintained as regards conviction of the appellant for the offence under Section

138 of the NI Act, 1881 for dishonour of 7 cheques in the sum of Rs. 3 lakhs each, as drawn by him in favour of the complainantrespondent No. 2; however, the sentence is modified in the manner that in each of these 7 cases, the appellant shall pay fine to the extent of double the amount of each cheque (i.e., a sum of Rs. 6 lakhs in each case) within 2 months from today with the stipulation that in case of default in payment of fine, the appellant shall undergo simple imprisonment for a period of one year. On recovery of the amount of fine, the complainant-respondent No.

2 shall be compensated to the tune of Rs. 5.5 lakhs in each case. In the event of imprisonment for default in payment of fine, the sentences in all the 7 cases shall run concurrently. [Paras 22,

23.1 and 24] [442-G; 443-A-B, D-G]

Rangappa v. Sri Mohan (2010) 11 SCC 441 : [2010] 6 SCR 507 – relied on.

Arulvelu and Anr. v. State represented by Public Prosecutor & Anr. (2009) 10 SCC 206 : [2009] 14 SCR 1081; M.S. Narayana Menon alias Mani v. State of Kerala and Anr. (2006) 6 SCC 39 : [2006] 3 Suppl. SCR 124 ; Kumar Exports v. Sharma Carpets (2009) 2 SCC 519 : [2008] 17 SCR 572 – referred to.