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2025 Supreme(Online)(Bom) 351587
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
2025:BHC-AS:10
CRIMINAL APPEAL NO. 561 OF 2018
T.A.N.Moorthy
Appellant
(Original Complainant)
Versus
C.K.Narayan and Anr
Respondents
• Mr. Vijay Kurle a/w. Ms. Priyal Gupta and Mr. Pratik Sarkar, Advocates for Appellant.
• Mr. Vishal V. Kale a/w. Mr. Ganesh M. Misal, and Mr. Sunil S. Dude, Advocates for Respondent No.1.
• Ms. Sangita E. Phad, APP for Respondent No.2 – State
CORAM : MILIND N. JADHAV, J.
DATE : JANUARY 02, 2025
The appellate court should not interfere with an acquittal unless the findings are perverse. In proceedings concerning cheque dishonour, the complainant bears the burden of substantiating the underlying debt; without cogent evidence or proof of a valid agreement, the presumption of liability is effectively rebutted by the defense.
Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138 and 139 - Dishonour of cheque - Legally enforceable debt - Burden of proof - Complainant must prove that there was a legally enforceable debt or liability for which the cheque was issued - Mere issuance of a signed cheque and its subsequent dishonour does not automatically establish guilt if the underlying liability is not proven. (Paras 14, 30, 33)
(B) Appeal against acquittal - Scope and ambit - Appellate court is not to substitute its view for that of the court below - Interference is only warranted if the trial court’s finding is palpably wrong, manifestly erroneous, or results in a miscarriage of justice - Double presumption of innocence in favour of the accused - An order of acquittal should not be disturbed unless there are substantial and compelling reasons to do so. (Paras 7, 11-17, 38)
Facts of the case:
The appeal was directed against an order of acquittal regarding the dishonour of cheques. The complainant claimed the cheques were issued in discharge of multiple liabilities, including unpaid salary, brokerage, and reimbursement for third-party investments, while the accused argued the cheques were left blank and subsequently misused by the complainant, who was an employee at the time, asserting that no legally binding debt existed.
Findings of Court:
The complainant failed to produce any credible agreement or documentary evidence to substantiate the alleged financial liabilities. The records produced were self-generated and unsupported, failing to establish a clear nexus between the claimed amounts and the impugned cheques. The defense successfully rebutted the presumption by demonstrating that the claims were unsubstantiated and highly improbable.
Issues: The main issues were whether the complainant discharged the burden of proving a legally enforceable debt and whether the higher court was justified in interfering with the trial court’s finding of acquittal.
Ratio Decidendi: In an appeal against acquittal, the appellate court must respect the trial court’s findings unless they are proven perverse. In this case, the absence of concrete documentation or proof of agreement regarding the financial liability rendered the claim unsubstantiated, and the accused’s defense created significant doubt, effectively rebutting the statutory presumption of a valid debt.
Result: Appeal dismissed.
JUDGMENT :
1. Heard Mr. Kurle, learned Advocate for Appellant, Mr. Kale learned Advocate for Respondent No.1 and Ms. Phad, learned APP for State.
2. The present Appeal challenges judgment of acquittal dated 01.10.2015 passed by the Metropolitan Magistrate Court, 27th Court, Mulund in CC No. 274/SS/1996. Appellant – T.A.N. Moorthy is original Complainant, private Respondent No.1 Mr. C.K. Narayan is original Accused and State is Respondent No.2.
3. Parties shall be referred to as “Complainant” (Appellant) and “Accused” (Respondent No.1) for convenience.
4. Prior to passing of impugned judgment dated 01.10.2015, Trial Court by judgment dated 08.03.2010 had convicted Accused for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short “the said Act”) and sentenced him to suffer S.I. for 1 year and imposed fine of Rs.87,46,713/- and in default to suffer S.I for 3 months. Accused being aggrieved filed Criminal Appeal No.177 of 2010 before Sessions Court. By judgment dated 14.05.2015, his Appeal was allowed and judgment dated 08.03.2010 was quashed and set aside and the case was remanded back to Trial Court for reconsideration and rehearing with a direction to decide facts in issue about the existence of legal liability or legally enforceable debt against the Accused at the time of issuing the cheques.
5. Case on remand was heard by Trial Court and by judgment dated 01.10.2015 Accused is acquitted of the offence punishable under Section 138 of said Act.
6. This judgment of acquittal is under challenge in the present Appeal.
7. At the outset, it would be worthwhile to note the scope of Appeal against Acquittal and the law with regard to scope of interference by Appellate Court in an Appeal against acquittal. A recent decision of the Division Bench of this Court while deciding Criminal Appeal No.555 of 2024 against Acquittal in the case of ABC, Through Police Station, Chhavani, Nashik Vs. The State of Maharashtra and Anr., (1 2024 SCC OnLine Bom 1914), has after analysing the settled law on the above issue laid down the scope for interference in Appeal against Acquittal. The Division Bench states that the law on this issue is no longer res integra. Paragraph Nos. 11 to 18 of the above decision are relevant and it is seen that several landmark decisions of the SC on the above issue are quoted with approval therein. Paragraphs Nos. 11 to 18 read thus:-
“11. In Sheo Swarup v.King Emperor, one of the earliest case dealing with the scope of the Appellate Court against an order of acquittal, the Privy Council held as under on page 404:
“ Sections 417 , 418 and 423 of the Code give to the High Court full power to review at large the evidence upon which the order of acquittal was founded, and to reach the conclusion that upon that evidence the order of acquittal should be reversed. No limitation should be placed upon that power, unless it be found expressly stated in the Code. But in exercising the power conferred by the Code and before reaching its conclusions upon fact, the High Court should and will always give proper weight and consideration to such matters as (1) the views of the trial Judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any doubt; and (4) the slowness of an appellate Court in disturbing a finding of fact arrived at by a Judge who had the advantage of seeing the witnesses. To state this however is only to say that the High Court in its conduct of the appeal should and will act in accordance with rules and principles well known and recognized in the administration of justice.”
12. The Supreme Court in M.G. Agarwal v. State of Maharashtra, in paras 16 and 17 has observed as under:
“16. Section 423 (1) prescribes the powers of the appellate court in disposing of appeals preferred before it and clauses (a) an
