Manishkumar Rameshchandra Shah Vs State of Gujarat

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CR.A/572/1998

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1/9

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JUDGMENT

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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CRIMINAL APPEAL No. 572 of 1998

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For Approval and Signature:

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HONOURABLE MR.JUSTICE BANKIM.N.MEHTA

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1^{Whether Reporters of Local Papers may be allowed} to see the judgment ?

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2 To be referred to the Reporter or not ?

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3^{Whether their Lordships wish to see the fair copy} of the judgment ?

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Whether this case involves a substantial question of law as to the interpretation of the 4 constitution of India, 1950 or any order made thereunder ?

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5^{Whether it is to be circulated to the civil judge}

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MANISHKUMAR RAMESHCHANDRA SHAH - Appellant(s) Versus

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STATE OF GUJARAT & 1 - Opponent(s)

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Appearance:

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MR SAMIR AFZALKHANfor Appellant(s) : 1,

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MISS CM SHAH, ADDL. PUBLIC PROSECUTOR for Opponent(s) : 1,
NOTICE SERVED for Opponent(s) : 2,
MR HM PARIKH for Opponent(s) : 2,

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CORAM : HONOURABLE MR.JUSTICE BANKIM.N.MEHTA

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Date : 02/03/2012

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ORAL JUDGMENT

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Appellant – original complainant has preferred
this appeal under section 378 of the Code of Criminal
Procedure, 1973 and challenged the judgment of
acquittal passed by the learned JMFC, Nadiad on
17.1.1998 in Criminal Case No.4776 of 1996 acquitting
the respondent accused for the offence under section

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CR.A/572/1998

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2/9

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JUDGMENT

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138 of the Negotiable Instruments Act, 1881 (for short
“the Act”).

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2.According to the complainant, he is a partner in
a partnership firm “Shree Investment” doing the
business of trading in shares. The accused was their
client and was dealing in sale and purchase of shares.
Rs.3,40,000/- remained payable by the accused towards
sale and purchase of shares on settlement of account
and the accused admitted the same and executed a
writing in that regard. The accused gave two cheques
bearing Nos.782381 and 782383 each for Rs.1,70,000/-
dated 30.9.1996 drawn on Bank of Baroda towards the
outstanding amount. On presentation of the cheques in
the bank, both the cheques returned unpaid on account
of insufficient funds. Therefore, Notice through
advocate was served to the accused and demand of
unpaid cheque amount was made. The accused gave reply
to the notice and raised false disputes. The accused
did not pay the unpaid cheque amount. Therefore, the
complainant under section 138 of the Act was filed in
the Court of learned JMFC, Nadiad and it was
registered as Criminal Case No.4776 of 1996.

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3.The trial Court issued summons. Pursuant to the
summons, the accused appeared and denied having
committed the offence. Therefore, the prosecution
adduced evidence. At the end of recording of
evidence, trial Court explained to the accused the
incriminating circumstances appearing in the evidence
against him. The accused in his further statement
recorded under section 313 of the Code explained that

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JUDGMENT

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CR.A/572/19983/9

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false complaint is filed. The accused also filed
written statement and stated that the accused was
close friend of Kishanbhai Shah, - maternal uncle of
the complainant, who was serving in Bank of Baroda;
that said Kishanbhai started business of shares as
Benami of his wife Gitaben and nephew Manishbhai
(complainant) in partnership and a big deal in respect
of shares was made in 1994, but on account of fall in
share market, they were in need of Rs.1 lac
immediately and informed him about their financial
difficulty; that he managed to give Rs.1 lac to
Kishanbhai from his relative Bhupendrabhai Patel and
agianst that, Kishanbhai gave cheque of Rs.1 lac to
Bhupendrabhai Patel; that as Kishanbhai did not return
the amount to Bhupendrabhai, said Bhupendrabhai
presented the said cheque, but it was returned unpaid;
as complaint was likely to be filed in respect of said
deal, he managed for the amount and paid Rs.1 lac to
Bhupendrabhai on behalf of Kishanbhai; therefore, such
amount is recoverable from Kishanbhai; that said
Kishanbhai did some share transactions without his
consent and knowledge and on account of financial
difficulty, asked him to give two cheques to show to
the share brokers as they were insisting payment of
amount; and hence, cheques in question were obtained
by said Kishanbhai, who had introduced him in the
account opening form of the bank; that said Kishanbhai
kept custody of cheques and passbook of the said
account and under threats, obtained his signature on a
blank stamp paper and other blank papers; that a
letter was written to complainant Kishanbhai asking
not to present the cheques in the bank and a copy of

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CR.A/572/19984/9JUDGMENT

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the letter was also sent to the Bank of Baroda,
College Road Branch, Nadiad that said Kishanbhai, who
was serving in the bank, suppressed the letter and
returned the cheques unpaid with false endorsement and
false complaint is filed. It is further explained
that he has not made any deal in respect of the shares
with the complainant and hence, there is no question
of paying the amount to the complainant. After
hearing the learned advocates for the parties, the
trial Court by impugned judgment acquitted the
accused. Being aggrieved by the said decision, the
complainant has preferred this appeal.

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

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5.Learned advocate Mr. Afzalkhan submitted that
there were share transactions between the complainant
and the accused and towards outstanding amount of such
share transactions, two cheques were given by the
accused and the accused also signed a writing with
regard to outstanding amount. He also submitted that
under section 139 of the Act, a presumption is in
favour of the drawer of cheque and the accused is
required to rebut the presumption. He also submitted
that the documentary evidence produced on record
indicates that the complainant proved legally
recoverable debt, but the accused failed to rebut the
presumption. He further submitted that the accused

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JUDGMENT

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CR.A/572/19985/9

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has raised a defence that cheques are obtained by the
complainant under threats, but no complaint to the
police in that regard is filed. Therefore, the trial
Court committed error in acquitting the accused and
hence, the impugned Judgment is required to be set
aside. He relied upon decision of Rangappa Vs. Mohan
reported in AIR 2010 SC 1898, decision of Goaplast
Pvt. Ltd. Vs. Shri Chico Ursula D'souza and another
reported in AIR 2003 SC 2035 and decision of Goa Plast
(P) Ltd. Vs. Chico Ursula D'souza reported in AIR 2004
SC 408.

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

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7.According to the prosecution case, there were

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CR.A/572/19986/9JUDGMENT

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

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8.The prosecution produced the notice given by the
complainant to the accused demanding the amount of
unpaid cheques at Exh-14 and reply to the notice given
by the accused at Exh-15. It appears from the reply
to the notice Exh-15 that the accused denied the

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CR.A/572/19987/9JUDGMENT

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

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9.In view of above evidence, it emerges that on
settlement of account of share transactions between
the parties, an amount of Rs.3,40,000/-was payable by
the accused and the cheques were given towards
discharge of such debt. It is very strange that both
the cheques were dated 30.9.1996 for the same amount
drawn on the same bank and from the same account
maintained in the Bank. The writing Exh-11 also
indicates that two cheques of the same date were given
by the accused towards discharge of his liability on
settlement of account. It is settled proposition that
presumption under section 139 of the Act is rebuttable
presumption and when an accused has to rebut the
presumption under section 139 of the Act, the standard
of proof for doing so is that of “Preponderance of
probabilities”. Therefore, if the accused is able to
raise a probable defence, which creates doubt about
the existenceof a legally recoverable debt or
liability, the prosecution can fail. The accused can
rely upon on the materials submitted by the

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CR.A/572/19988/9

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JUDGMENT

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complainant in order to raise such defence. If the
accused is able to rebut the presumption and raise
probable defence, the burden shifts on the complainant
to prove the existence of a legally recoverable debt
and the debt was given towards discharge of such debt.
In the present case, as observed earlier, the accused
raised defence that cheques have been misused and has
raised dispute about share transactions and
settlement of account. The accused raised the defence
with regard to existence of legally recoverable debt
or liability in reply to the notice. The complainant
was cross examined in respect of writing Exh-11 and
the cheques Exh-12 and 13. The complainant was also
cross examined in respect of share transactions.
Thereby, the accused was able to rebut the presumption
by raising probable defence that there were no share
transactions between them and the cheques were
misused. Therefore, the burden shifted on the
complainant to prove existence of legally recoverable
debt. However, the complainant did not adduce any
evidence in that regard. In view of the fact that two
cheques of the same date were allegedly given towards
discharge of settlement of account in respect of share
transactions between the parties, it is difficult to
believe that a debtor would give two cheques of the
same dates drawn on the same bank drawn on the same
account towards discharge of a debt or liability. It
is also very significant that the prosecution did not
produce any books of account to show share
transactions and settlement of account between the
parties. Therefore, the prosecution case that there
were share transactions between the parties and the

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CR.A/572/19989/9

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JUDGMENT

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accused gave cheque towards discharge of debt on
settlement of account raises serious doubt about
existence of legally recoverable debt.

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

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

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12.In the result, the appeal fails and stands
dismissed.

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(BANKIM N.MEHTA, J.)

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shekhar*

Manishkumar Rameshchandra Shah v. State of Gujarat

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Manishkumar Rameshchandra Shah v. State of Gujarat

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