Facts:

• Rohitbhai Jivanlal Patel, a trader in edible spices, had a shop near National Plaza in Alkapuri, Vadodara, and was the Appellant accused.
• Respondent No. 2(Complainant) was a business associate with an office in Windsor Plaza, Vadodara. He often visited his friend Shri Jagdishbhai at his National Plaza shop near the Appellant's shop. Over time, the three of them became close friends.
• The Appellant requested and received a short-term loan of ₹22.5 lakhs from Respondent 2.
• On repeated demands for repayment, the accused issued cheques with different dates and a stamped acknowledgement of debt.
• The dishonour of these cheques led to proceedings under Section 138 of the NI Act Before Additional Senior Civil Judge (ASCJ) and Additional Chief Judicial Magistrate (ACJM), Vadodara.
• The ASCJ and ACJM, Vadodara dismissed all 7 complaint cases through similar but separate judgments and orders dated 09.06.2017.
• Aggrieved by the decision of ASCJ and ACJM, the Respondent-Complainant filed an appeal before the High Court of Gujarat, which set aside the impugned orders, disapproved the acquittal and found the Appellant guilty under Section 138.
• Hence, the appeal was filed before the Supreme Court.
  

Background:

Additional Senior Civil Judge and Additional Chief Judicial Magistrate, Vadodara

• Respondent No. 2-Complainant, filed 7 complaint cases against the Accused-Appellant between June and November 2008. (Paragraph 4)
• The Additional Senior Civil Judge and Additional Chief Judicial Magistrate, Vadodara, noted the admission of a signature by the accused on the cheques, relying on Rangappa v. Sri Mohan (2010) 11 SCC 441 and applied the presumption under Section 139 of the NI Act.
• The Court noted factors favoring the accused, such as no proof of income, inconsistent statements, and unlikely claims about cheque damage. The complainant failed to prove the cheques were issued for the ₹22,50,000 loan. Hence, all 7 cases were dismissed on 09-06-2017. (Paragraph 6-6.2)
  
  

High Court of Gujarat:

• The Complainant appealed the acquittal judgments to the High Court of Gujarat, which decided the appeals together in a common judgment dated 08.01.2018.
• The High Court observed that, under Sections 118 and 139 of the NI Act, it was presumed that the cheques were issued for consideration unless proven otherwise.
• The complainant provided evidence of the debt, which the accused failed to refute. The High Court held that non-reflection in accounts affects tax liability, not the debt's enforceability if the loan was proved.
• The claim of cheques being washed away was irrelevant given the accused's clear acceptance of liability and that Jagdishbhai's testimony contradicted the Accused's defence. (Paragraph 7.1)
• The High Court set aside the impugned judgement and order of Additional Senior Civil Judge and Additional Chief Judicial Magistrate, Vadodara, convicting the accused under Section 138 with 1-year Simple imprisonment, Rs. 6 lakhs fine, and compensation to Respondent of Rs. 5.5 lakhs per case. (Paragraph 2)
  

Supreme Court of India:

• Aggrieved by the High Court's decision, the Appellant-Accused approached the Supreme Court, seeking restoration of the Trial Court's acquittal and setting aside the judgment of the Gujarat High Court.
  

Main Issue:

Did the High Court properly convict the appellant under Section 138 of the NI Act by upholding the statutory presumption of debt despite the appellant's attempt to rebut it?