Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 Supreme(Guj) 1356

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
M. K. Thakker, J.
Bhavsar Vinodkumar Babulal – Appellant
Versus
State Of Gujarat – Respondent
R/Criminal Appeal (Against Acquittal) No. 1567 Of 2023 Criminal Misc. Application (Direction) No. 1 of 2023 In R/Criminal Appeal No. 1567 of 2023
Decided On : 20-12-2023

Advocates:
Advocate Appeared:
For the Appellant : Mr N D Songara, Ms Janhvi N Songara
For the Respondent: Mr Kamlesh S Kotai, Ms Divyangna Jhala, APP

An illegal contract voids any associated debt, thus a cheque issued under such a contract does not constitute a legally enforceable liability under Section 138 of the N.I. Act.

Headnote:(A) Code of Criminal Procedure, 1973 - Section 378 - Negotiable Instruments Act, 1881 - Section 138 - Appeal against acquittal - Complainant alleged illegal contract with accused to secure employment for son, resulting in cheque dishonor - Trial Court acquitted the accused due to failure of complainant to establish legally enforceable debt - Court discussed presumption under Sections 118 and 139 of N.I. Act and illegality of the consideration involved. (Paras 7, 10, 16)

Facts of the case:
The appellant alleged that he lent money to the accused under the pretense of securing a job for his son at O.N.G.C. The accused issued cheques for repayment which were dishonored. The complainant argued that the trial court wrongly acquitted the accused despite evidence of the debt.

Findings of Court:
The court upheld trial court's acquittal, finding that the contract was illegal and thus not enforceable, as the complainant was aware of the arrangements being unlawful. (Paras 17, 19)

Issues: Whether the cheques issued were for a legally enforceable debt or liability, and if the trial court erred in acquitting the accused.

Ratio Decidendi: The court concluded that no enforceable debt existed as the agreement for employment was unlawful, ruling that parties to an illegal contract cannot seek legal recourse under the N.I. Act. (Paras 15-16)

Result: Appeal dismissed.

Table of Content
1. overview of the case and factual context. (Para 1 , 2)
2. trial court proceedings and evidence introduction. (Para 3 , 4)
3. summary of the complainant's evidence and trial court's findings. (Para 5)
4. arguments presented by complainant's counsel. (Para 6 , 7 , 8 , 9)
5. determination of the legal enforceability of the debt. (Para 10 , 11)
6. discussion on the enforceability of the debt and legality of transaction. (Para 12)
7. analysis of legality based on contract law and n.i. act. (Para 13 , 14 , 15 , 16)
8. final conclusion on the appeal against acquittal. (Para 17 , 19)
9. final ruling upholding the acquittal. (Para 18)

JUDGMENT :

M. K. Thakker, J.

1. This is an appeal filed by the appellant – original complainant under section-378 of the Code of Criminal Procedure challenging the judgment and order of acquittal dated 27.04.2023 below Exh.76 passed by the learned 4th Judicial Magistrate First Class, Mehsana in Criminal Case No.4545 of 2018, wherein, the learned trial Judge has acquitted the respondent – accused from the charges levelled against him under Section-138 of the N.I. Act.

2. It is the case of the complainant that the complainant is doing the business in the name and style of ‘Harikrushna Dresses’. As the complainant and the accused are the friends and relatives, they were knowing to each-other. It was conveyed by the respondent - accused that he is a Press Reporter and as the complainant is having son, who had completed the B.E. Mechanical in the year 2016, to get the job in O.N.G.C., it was conveyed by the accused to provide all the educational certificates and promise to give job within a period of six months. Under the guise to give job in the O.N.G.C., an amount of Rs.80,000/- was taken through the cheque on 23.06.2017; Rs.40,000/- was taken on 14.07.2017 and further Rs.40,000/- was taken on the same day i.e.14.07.2017, by way of cheque of different bank, in all, it is alleged in the complaint that Rs.1,60,000/- was withdrawn by the complainant through the aforesaid cheque and it was given to the respondent – accused. On completion of six months period, an inquiry was made with regard to the job as per promise, however, no satisfactory answer was given, therefore, money was demanded back and to repay the amount, the accused had issued a cheque for the amount of Rs.80,000/- being cheuqe no.000002 and an amount of Rs.80,000/- being a cheque no.000004 of dated 19.05.2018. An assurance was given that on depositing of the cheque, the amount would be credited in the bank account, however, on depositing the same, it was returned with endorsement of ‘stop payment’ on 01.06.2018. The complainant has issued notice on 07.06.2018 below Exh.16. As the accused neither replied to the notice nor complied with the notice, therefore, a private complaint came to be filed being Criminal Case No.4545 of 2018 before the competent court.

3. The learned trial Court after recording the verification of the complainant issue process under section-204 of the Cr.P.C. wherein, on appearance of the accused, plea below Exh.9 was recorded, wherein, the respondent – accused had pleaded not guilty and claimed to be tried.

4. To prove the case against the accused, the complainant examined himself below Exh.5 and also, examined one witness viz.Mukeshbhai Babaldas Rathod below Exh.36, in addition of aforesaid evidence, the documentary evidence, which is in the nature of cheque below Exh.13; return memo Exh.14; bank slip Exh.15; Post receipt of notice Exh.16; copy of the notice Exh.17; acknowledgment slip Exh.18 were produced. On filing the closing pursis, statement under Section-313 of Cr.P.C. was recorded, wherein, the respondent – accused has stated that the cheque, which was lying towards the security with the complainant, was misused and false complaint has been filed.

5. To rebut the presumption, which is in favour of the complainant in addition to the cross-examination of the complainant, the accused himself was examined below Exh.58