HC Upholds Acquittal as Applicant Failed to Prove Accused’s Business, Goods Delivery, or Issuance of Cheque for Legal Debt

Case Details: Ambika Ornaments through Piyushbhai Champakbhai Shah v. Rahul Ramniklal Shah - [2025] 172 taxmann.com 30 (HC-Gujarat)

Judiciary and Counsel Details

• Ms S.V. Pinto, J.
• Priyal Yatin Shah, Adv. for the Applicant.
• Bhargav Pandya, APP for the Respondent.

Facts of the Case

In the instant case, the applicant was doing business with gold and silver ornaments, and the accused was also involved in the business of gold and silver ornaments. The applicant sold silver ornaments to the accused and raised a bill. The applicant demanded the amount from the accused and the accused gave a cheque, however, the same was returned unpaid with the endorsement ‘funds insufficient’.

Thereafter, the applicant filed a complaint under section 138 of the Negotiable Instruments Act, 1881. However, the Trial Court, by the impugned order, acquitted the accused. The applicant then filed an instant application seeking leave to appeal against the said order.

It was noted that the applicant had not produced the balance sheet of the financial year in which goods were sold to the accused, and the bill produced did not bear the customer’s signature. Further, the accused had sent a reply to the notice and raised an issue that his chequebook was lost.

High Court Held

The High Court held that the applicant had not produced any cogent evidence to disbelieve the defence of the accused and had failed to prove beyond reasonable doubt that the cheque in question was given as a repayment of a legal debt.

Further, the Trial Court had rightly concluded that the applicant had not proven that the accused was doing business of gold and silver and that the goods mentioned in the bill produced were received by the accused.

Thus, the impugned order passed by the Trial Court was just and proper and did not require interference.

List of Cases Reviewed

• Rangappa v Sri Mohan reported in (2010) 11 SCC 441
• Tedhi Singh v. Narayan Dass Mahant reported in (2022) 6 SCC 735
• Basalingappa v. Mudibasappa reported in 2019 0 AIR (SC) 1983 [Para 8]; followed.

List of Cases Referred to

• Rangappa v. Sri Mohan reported in (2010) 11 SCC 441 (para 7.1)
• Tedhi Singh v. Narayan Dass Mahant reported in (2022) 6 SCC 735 (para 7.2).