Final Order 1

Order Details: Copy of Judgment .
Pdf Text: CNR No.MHMM120012132022 Presented on : 06.01.2022
Registered on : 17.01.2022
Decided on : 20.03.2023
Duration : 14 : 02 : 01
DD:MM:YY
IN THE COURT OF THE METROPOLITAN MAGISTRATE,
06TH COURT, MAZGAON (SEWRI), MUMBAI
(Presided over by : A. S. CHONDE)
(BSL LLB LLM)
Exhibit -
a) Serial number of case : 0600285/SC/2022
b) Date of commission of offence : 05.11.2021
c) Name of complainant : Vinod Sardarmal Kothari
Age 47 years Occ. : Business
Add. : Bhalerao Bhuvan, Room
No.8, Veer Tanaji Malusare Marg,
Ferbunder, Mumbai 400 003
d) Names of accused : 1. Shashank Shushant Suvarnakar
(Proprietorship)
2. Sushant Shantaram Birwadkar
3. Shantaram G. Birwadkar
Add. : 686, S. P. Compound,
Dr. Walinbe Marg, Parel,
Mumbai 400 012
AND
Sai Sadan Apartment, Room No.4,
3rd floor, Dr. Walinbe Marg,
Parel, Mumbai 400 012
e) Offence complained of and
proved
: Under section 138 of the
Negotiable Instruments Act.
f) Plea of the accused : Accused pleaded not guilty and
claimed to be tried.
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g) Final order : Accused Nos.1 & 2 are convicted.
Accused No.3 is acquitted.
h) Date of final order : 20.03.2023
Appearance :
For complainant - Advocate Prasad Suresh Rane
For accused - Advocate Sharat Raut
JUDGMENT
(Delivered on 20th day of March 2023)
The accused are being tried for the offence punishable under
section 138 of the Negotiable Instrument Act, 1881 (herein after referred to as
'the N. I. Act').
2. In brief the case of complainant is as under:
Accused No.1 is a proprietary concern and accused Nos.2 & 3
are the proprietor and authorized signatories and carrying on the business of
gold in name of Shashank Shushant Suvarnkar. Accused with consent,
connivance and knowledge of each other approached complainant's client for a
financial assistance friendly loan of Rs.43 lakhs for business purpose i.e. for
accused shop and new opening business. Accused Nos.2 & 3 have informed
the complainant that accused Nos.2 & 3 would pay an interest @ 21% p.a.
regarding financial assistance on friendly loan. On believing in accused Nos.2
& 3 behalf of accused No.1 representation to the complainant and on the
request of accused, complainant gave accused a total sum of Rs.43 lakhs by
cash. The complainant had paid the said amount in various installments as per
accused required from February 2010 to October 2021. Accused Nos.2 & 3
have not paid any interest till date. The complainant was reluctant to give
such a huge amount of loan. Hence, accused agreed to issue post dated
cheque. The complainant had not received any amount from accused of
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principal amount till date. In consideration towards the repayment of the said
friendly loan accused Nos.2 & 3 with consent, connivance, collusion and
knowledge and behalf of accused No.1 issued on cheque bearing No.100379
for Rs.43 lakhs dated 21.10.2021 drawn on Abhyudaya Co-operative Bank
Ltd., Worli branch, Mumbai. As per the instructions, assurance of clearance
and after informing accused Nos.2 & 3, the said cheque was deposited on
03.11.2021 for realization, the said disputed cheque was dishonoured with
remark “funds insufficient” vide memo dated 05.11.2021.
3. The complainant sent statutory demand notice dated 23.11.2021
calling upon the accused to pay the said dishonoured cheque amount within
stipulated time by R.P.A.D. at the given address. Notice sent to the address
has been duly received by them on25.11.2021. After receiving reply dated
09.12.2021 from the accused Nos.1 to 3, the complainant instructed his
advocate to send a rejoinder reply dated 13.12.2021 to the reply of the
accused. The accused has failed and neglected to pay the dishonoured cheque
amount hence this complaint.
4. By order dated 18.02.2022 issue process has been passed against
accused.
5. After appearance, accused pleaded not guilty and claimed to be
tried, when particulars of the offence complained of were read over and
explained to them in vernacular vide Exh.14.
6. The statement of accused under section 313 of the Code of
Criminal Procedure, 1973 was recorded vide Exh.35 & Exh.36, accused
submitted that, false case has been filed against them.
7. Heard learned advocates for both the sides. The learned
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advocate for the complainant has filed written argument vide Exh.45. The
learned advocate for the accused has orally argued at length. On going
through the evidence, cited case laws and material placed on record, following
points arise for my determination & I have recorded my findings thereon for
the reasons given below :
Sr.
No.
Points Findings
1 Whether the complainant proves that the
accused issued cheque bearing No.100379
for Rs.43 lakhs dated 21.10.2021 drawn on
Abhyudaya Co-operative Bank Ltd., Worli
branch, Mumbai for discharge of legal
enforceable debt or liability ?
Yes, up to extent of
accused Nos.1 & 2.
2 Whether the complainant proves that the
cheque was presented within a prescribed
period and it was dishonoured for the reason
“funds insufficient” ?
Yes, up toextent of
accused Nos.1 & 2.
3 Whether the complainant proves that he has
issued demand notice in written to the
accused within stipulated period and it was
served on him ?
Yes, up to extent of
accused Nos.1 & 2.
4 Whether complainant proves that accused
failed to repay the cheque amount within 15
days of receipt of notice ?
Yes, up to extent of
accused Nos.1 & 2.
5 Whether the complainant proves that the
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accused has committed offence punishable
u/s 138 of Negotiable Instruments Act 1882 ?
Yes, up to extent of
accused Nos.1 & 2.
6 What order ? Accused Nos.1 & 2
are convicted and
accused No.3 is
acquitted.
REASONS
8. In order to prove its case, complainant has examined himself
below Exh.5. He has reiterated all the facts of complaint in his affidavit of
examination-in-chief. Complainant has also relied upon following
documents :-
1. Copy of statement of bank account Exh.16
2. Copy of statement of bank accounted
of year 2013 to 2021 Article – A
3. Copy of pas book of bank account Article – B
4. Disputed cheque Exh.17
5. Copy of cheque returned memo Article – C
6. Cheque depositing slip Exh.18
7. Statutory demand notice Exh.19
8. Six postal charges receipts Exh.20 (colly.)
9. Six acknowledgment cards Exh.21 (colly.)
10. Reply to notice by accused Exh.22
11. Rejoinder to reply by complainant Exh.23
12. Two original cheques bearing Nos.2279 &
459 for LIC purpose Exh.24 & Exh.25
13. Three letters given by LIC office Exh.26 (colly.)
The complainant has examined C.W. No.2 Dashrath Ramchandra
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Wangde, Bank Officer vide Exh.30 and produced documents copy of
statement at Exh.32, cheque return memo which bears seal of their bank and
signature of their bank manager at Exh.33. The authority letter signed by bank
manager dated 14.09.2022 at Exh.34. By way of filing pursis Exh.29 the
complainant closed his evidence.
9. Accused has examined themselves as D.W. No.1 Shantaram
Gopal Birwadkar vide Exh.39 & D.W. No.2 Sushant Shantaram Birwadkar at
Exh.40. By way of filing pursis Exh.42 accused closed their evidence.
As to point Nos.1 to 5 :
10. As far as presentation of cheque within its validity period and
dishonour is concerned it has not been disputed by the accused at all.
Moreover, complainant has placed on record original cheque at Exh.17 and
cheque return memo at Exh.33 proved that cheque dated 21.10.2021 was
presented and dishonoured on 05.11.2021 for the reason “Funds Insufficient”
which is sufficient to hold that cheque was presented within its validity period
which got dishonoured.
11. As far as issuance of notice and its service is concerned accused
has not denied service of notice. On the contrary while recording statement
u/sec. 313 of Code of Criminal Procedure he admitted to have received the
notice. Moreover, complainant has also placed on record office copy of notice
Exh.19, postal receipt Exh.20 (Colly.) and acknowledgment card Exh.21
(colly.). So also there is reply by accused to the notice of the complainant as
per Exh.22. On the basis of such evidence it can be said that complainant has
complied with the requirement of Section 138 (b) of Negotiable Instrument
Act.
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12. Now the only question remains to be decided is that whether
cheque in question was issued for discharge of legal liability or not. It is a
well settled position of law that when a negotiable instrument is drawn, two
statutory presumptions arise in favor of the complainant, one under section
139 of N. I. Act and another under section 118 (a) of the N. I. Act. Further, the
court will presume a negotiable instrument for consideration unless and until
after considering the matter before it, it either believes that the consideration
does not exist or consider the non-existence of the consideration so probable
that a prudent man ought under the circumstances of the particular case to act
upon the supposition that the consideration does not exist. For rebutting such
presumption, what is needed is to raise a probable defense. In the present case,
the accused has admitted his signature. As has been observed by the Hon'ble
Supreme Court in Rangappa V/s Sri Mohan, (supra) that, "Once the cheque
relates to the account of the accused and he accepts and admits the signatures
on the said cheques, then initial presumption as contemplated under section
139 of the Negotiable Instruments Act has to be raised by the Court in favour
of the complainant."
13. In the case of K. N. Beena V/s Muniyappan (supra) the Hon'ble
Supreme Court has observed as follows – "Under section 118 of N.I. Act
unless the contrary was proved, it is to be presumed that the Negotiable
Instrument (including a cheque) had been made or drawn for consideration.
Under section 139 of N. I. Act the Court has to presume, unless the contrary
was proved, that the holder of the cheque received the cheque for discharge, in
whole or in part, of a debt or liability. Thus, in a complaint under section 138
of N. I. Act the Court has to presume that the cheque had been issued for a
debt or liability. This presumption is rebuttable. However, the burden of
proving that a cheque had not been issued for a debt or liability is on the
accused".
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14. Thus, as soon as the facts required to form the basis of a
presumption of law exist, no discretion is left with the court, but to draw the
statutory conclusion, but this does not preclude the person against whom the
presumption is drawn from rebutting it and proving the contrary. The rebuttal
does not have to be conclusively established, but such evidence must be
adduced before the court in support of the defence that the court must either
believe the defence to exist or consider its existence to be reasonably probable,
the standard of reasonability being that of the prudent man. However, it is to
be remembered that while adjudging whether in a case the presumption of
consideration has been rebutted, it becomes important to emphasize that a
mere denial of liability or vague defence of blank cheque as security, cannot
be taken as rebuttal of the presumption. The accused has to come forth with a
convincing defence. Needless to state that if on a bare denial the presumption
is stated to be rebutted, that would defeat the legislative intention of having a
presumption in the first place. The reverse onus clause has been introduced to
further the legislative objective of improving the credibility of negotiable
instruments. The presumption that a person would not normally hand over a
signed cheque to another unless the same is for a liability has to be respected
and given its full play. Only in a case where the accused comes up with a
convincing defence to liability, that the presumption can be stated to have been
rebutted.
15. Keeping in mind the above principles of law and scrutiny of
facts, it appears that in the case at hand also accused has not denied his
signature on the cheques in question. Therefore, it has to be presumed that
cheques were issued towards discharge of legal liability. Now it has to be
verified whether accused is able to rebut that presumption or not.
16. Advocate Pramod Rane appearing for the complainant submitted
by written argument at Exh.45 that accused came to complainant for friendly
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loans. The complainant has paid Rs.43 lakh to accused time and again from
year 2010 to October 2021. The complainant has proved that he paid Rs.43
lakh to accused. The accused had issued disputed cheque which is
dishonoured. The complainant has proved the disputed cheque and cheque
returned memo. The accused had given reply to notice of the complainant. So
the complainant has proved that notice is served to the accused. Though the
accused has taken defence that cheques given to complainant for the purpose
of LIC, those have been misused, the accused has failed to prove their defence.
Nothing has come in cross-examination of the complainant to disbelieve his
case. The complainant has proved its case beyond all reasonable doubt.
Hence he prayed for holding accused guilty.
17. The advocate Sharad Raut appearing for the accused submitted
that complainant has failed to show cheques were given for legal enforceable
debt. There is no fix dates from year 2010 to 2021, on which alleged disputed
amounts was paid to accused. There is no detail of description of the amount
and date of description. The complainant has not filed on record copy of
income tax return. The complainant does not have money lending licence to
give amounts on loan. If complainant has paid so much huge amount to
accused as to why complainant has not obtained acknowledgment receipt from
accused. Due to lock-down because of Covid-19 disease, the relation of the
accused and complainant became strained, therefore cheques given to
complainant for other purpose, those have been misused. The accused has led
his evidence & rebutted the case of the complainant. On all these grounds, the
advocate of the accused prayed for acquittal of the accused.
18. In order to support his case, complainant has filed his affidavit as
per Exh.5 and stated as per the contents of complaint. In order to support his
evidence by way of affidavit, he has relied copy bank statement of bank
account of his wife namely Pinal Vinod Kothari which is at Exh.16, which
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shows that some amounts have been transferred from the account of the wife
of complainant to accused. The said copy of bank statement shows it is of
year 26.03.2012 to 23.11.2021. There is copy of statement of bank account of
complainant at Article – A, it also shows that some amount has been paid to
LIC through the cheques. There is another copy of statement of bank account
situated at Abhudaya Co-operative Bank of the complainant of 01.01.2019 to
23.11.2019 at Article – B which shows some amount is transferred. The
disputed cheque bear signature of accused Nos.1 & 2, there is cheque returned
memo along with deposit receipt at Exh.18 which shows that disputed cheque
was deposited and it was dishonoured for the reasons funds insufficient. There
is copy of statutory notice on record at Exh.19, accused has also given reply to
it. Hence, there is no question of service of notice. Moreover, complainant
has examined C.W. No.2 as per Exh.30. As per evidence of C.W. No.2, the
statement of bank account of complainant for period 01.01.2021 to 10.11.2021
is issued by Satara Sahakari Bank. The disputed cheque is issued by the said
bank. He further deposed that the cheque is dishonoured.
19. At the time of looking to the evidence of the complaint, it should
be seen what is defence of the accused. As per the defence of the accused,
accused No.1 is proprietary concern of accused No.2. The accused No.2 is
proprietor of the accused No.1. The said cheque was given to complainant for
LIC payment of wife of accused No.2 but complainant has misused it. Only
with intend to harass them, this false case has been filed against them.
Moreover defence witness No.1 Shantaram Birwadkar has led his evidence as
per Exh.39 who is accused No.3 and deposed that the accused No.1 is closed
at present & he does not know any transaction between his son i.e. accused
No.2 and complainant. This false case is filed. So also accused No.2 has led
his evidence as per Exh.40 & stated that his shop is closed, the wife of the
complainant is LIC agent. As wife of the complainant insisted him to take
policy in the name of his wife. So this witness took LIC policy. The said
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policy continued good for two years thereafter, accused No.2 could not pay the
installments of the policy, so policy was closed. So wife of complainant came
to his house and claimed blank cheque, so he issued cheque.
20. So for the defence of the accused that, the wife of the
complainant is LIC agent and accused No.2 had policy towards the wife of the
complainant is concerned, the C.W. No.1 Vinod has admitted in his cross-
examination that above said facts of his wife being LIC agent and accused has
policy towards her. The C.W. No.1 Vinod further admitted that, accused used
to pay policy premium through the cheque. Moreover reply given by accused
as per Exh.22 is on record, it also shows said plea of the accused that cheques
given to wife of the complainant, there were misused. Except reply to the
notice and verbal evidence of the accused, accused has not filed any other
evidence to show that accused misused the said cheque given for the LIC
purpose. The accused should have come with defence what was premium of
the policy of his wife, as to when the said policy was closed. But there is no
such defence.
21. It is pertinent to note that, for the moment if it is held to be true
that accused used to issue cheques to the wife of the complainant for
depositing LIC amount he may issue cheques in the name of LIC a person
cannot issue cheque in the name of LIC agent for LIC premium. The person
giving LIC amount through the cheque does not need to issue cheque in the
name of LIC agent. Such cheques are issued in the name of LIC of India
itself. The defence of the accused that without mentioning premium amount
and without mentioning name of payee i.e. LIC of India giving blank cheque
to wife of the complainant and the complainant has misused them is not
considerable. So also if blank cheque was given for LIC premium and it was
misused by the complainant, the accused should have filed complaint to the
police station for cheating or should have taken stringent action but accused
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did not do the same.
22. Moreover, the defence of the accused further shows that
complainant does money lending business and whatever transactions are done
by the complainant has not shown it in the income tax return. So far these
defences are concerned, as per settled provisions of the law not showing
transaction in the income tax return is not fatal to the case of negotiable
instrument. The concerned income tax authority will take action against the
person. Moreover another defence of the accused that complainant does
money lending business without valid licence is also not tenable because at the
time taking money from such person, he does not make inquiry with him if he
has money lending licence and he only takes money from the person who has
money lending licence.
23. It is argued by advocate of the accused that there is no document
showing payment of disputed amount to accused by the complainant, so there
is no existing debt or liability and it is not proved by the complainant so he
relied on Sunil Kumar Vs. Ram Dass dated 16.10.2014, in which Hon'ble
Punjab and Harayana Hgih Court held that absence of documentary proof of
advancement of loan to accused, complainant is not said to have proved
necessary ingredients of the section 138 of N. I. Act. So also advocate of the
accused has relied on Jai Bhagwan Panwar Vs. Sangeeta Rani dated
21.08.2014, in which Hon'ble Delhi High Court held that nothing is on record
and statement of the petitioner to show advancement of the loan to accused, its
benefit should go to the accused. So far as these submissions of the advocate
of the accused is concerned, in recent view of Hon'ble Apex Court in case of P.
Rashiya Vs. Abdul Nazir dated 12.08.2022, it has been held that if the
complainant does not need to show nature of the transaction and no need to
show sources of the income. Therefore the submission of the advocate of the
accused is not helpful for accused.
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24. The advocate of the accused has also relied on Thippeswamy
Agdi Vs. Gopal Shetty K. Shettar dated 02.01.2017, Hon'ble Karnataka
High Court held that financial transaction is not reflected by complainant in
business account and amount giving without taking any document, it can't be
said that transaction took place between parties. He also relied on R. Sekaran
Vs. N. Krishnamurty dated 18.10.2016, in which Hon'ble Madras High
Court held that cheques were not filled by accused and there is no existing
debt or liability then complainant is said to have failed to prove his case. So
far as filling of the cheque is concerned, as per section 20 of the N. I. Act,
drawer of the cheques once gives blank signed cheque to payee, then he gives
authority to that person to fill up it. Moreover, in case of B. M. Baswaraj Vs.
Shriniwas Ratla dated 05.04.2016, it has been held by Hon'ble Apex Court
that accused should prove that he has not issued the disputed cheque for the
purpose of alleged by complainant. In such circumstances with due respect of
the above two citations of Hon'ble High Court, those cases are not helpful for
the accused.
25. It is pertinent to note that as per the evidence of the complainant,
accused No.1 is proprietorship concern. It means a proprietorship firm or
concern has only one sole proprietor. If it is so then, it is not understood as to
why complainant has added accused No.3 Shantaram Birwadkar. Moreover
on perusal of the evidence D.W. No.1 Shantaram & evidence of D.W. No.2
Sushant it shows that accused No.2 Sushant Shantaram Bitwadkar is
proprietor of the accused No.1. As per settled provision of the law,
proprietorship firm and proprietor are not different person but those are one &
same person. The disputed signature on the cheque is also signed by accused
No.2, who also admitted in his cross-examination that it bore his signature.
Thus in proprietorship concern, there is no role of other person except
proprietor, hence it cannot be stated that accused No.3 had any role in the
alleged transaction. In such circumstances, complainant cannot be said to
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have brought substantial evidence against accused No.3. Hence, accused No.3
is liable to get its benefit.
26. The complainant has brought substantial evidence about the
advancement of the loan but accused has failed to rebut the presumption in
favour of the complainant. If accused has discharged his burden then
complainant has to prove each and every facts as burden is shifted on him.
But accused did not do so. The complainant has brought substantial evidence
against accused Nos.1 & 2. Consequently, I held that cheque in question was
issued towards discharge of legal liability. Considering all these aspects I
come to the conclusion that accused failed to rebut the presumption.
Consequently, I recorded my findings in affirmative on point Nos.1 to 5 up to
extent of accused Nos.1 & 2 and negative as to accused No.3.
As to point no. 6 :
27. In view of the affirmative findings recorded to the point Nos.1 to
5 accused Nos.1 & 2 are liable for conviction of the offence punishable u/s.
138 of Negotiable Instrument Act vide 255(2) of Code of Criminal Procedure.
So I stop here to hear the accused No.2 on the point of quantum of
punishment.
(A. S. Chonde)
Mumbai Metropolitan Magistrate,
Date : 20.03.2023 6th Court, Mazgaon (Sewri), Mumbai
28. Heard learned advocate for complainant and defence counsel.
The learned advocate for the complainant is present. Advocate for
complainant has prayed to punish the accused to maximum extent and also to
take compensation and impose fine. The learned defence counsel prayed for
leniency. Advocate of the accused No.2 has submitted that, accused No.2 is
Karta of the family. He has two children & wife who are depending on the
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accused No.2. Accused No.2 has old aged parents. The mother of the accused
is suffering from kidney disease. Whe has to be kept on the dialysis. If he is
sent to jail his famly members have to face starvation, so he prayed for lenient
view. He also prayed for minimum fine and punishment be imposed to him.
29. As per provision, the punishment for offence punishable under
section 138 of N.I. Act is upto two years imprisonment or with fine which can
be twice to the amount of cheque. The punishment provided in Section 138 of
N.I. Act cases are meant to ensure payment of money and threat of jail is only
to ensure recovery as such, imposition of jail sentence is not mandatory. In the
case at hand, the case of the year 2022 and transaction took place in between
February 2010 to October 2021, near about 2 to 6 years have been lapsed. It
would be proper to impose sentence for one year and compensation.
30. In the circumstance of the case and considering the source of
income of accused No.2, his responsibilities I feel that sentence to undergo
simple imprisonment for the term of one year and direction to pay
compensation of Rs.43 lakhs to the complainant in default to undergo simple
imprisonment for three months would be just, proper and would meet the ends
of justice. In view of Hon'ble Apex Court in Vijayanan ..Vs.. Sadanandan,
whenever accused is directed to pay compensation to the complainant U/s 357
(3) of Cr.P.C., there should be clause of default of sentence. In the result I
proceed to pass the following order.
ORDER
i) Accused Nos.1 & 2 are convicted vide section 255 (2) of Cr.P.C. for the
offence punishable under section 138 of the Negotiable Instruments
Act.
ii) Accused No.2 is sentenced to suffer simple imprisonment of one (01)
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year.
iii) Accused Nos.1 & 2 are directed to pay jointly and severally to the
complainant compensation to the tune of Rs.43,00,000/- (Forty three
lakhs), in default the accused to undergo Simple Imprisonment for three
(03) months.
iv) Accused No.3 is acquitted vide section 255 (1) of Cr.P.C. for the
offence punishable under section 138 of the Negotiable Instruments
Act.
v) The amount of compensation shall be paid to the complainant on due
verification after the appeal period is over.
vi) Accused No.2 to surrender his bail bonds.
vii) Bail bonds of accused No.3 stands cancelled.
viii) Accused No.3 is directed to furnish P.R. bond of Rs.15,000/- for
the compliance of section 437(A) of the Code of Criminal
Procedure.
ix) Copy of this Judgment be supplied free of costs to the accused.
x) Judgment is pronounced in open Court.
(A. S. Chonde)
Mumbai Metropolitan Magistrate,
Date : 20.03.2023 6th Court, Mazgaon (Sewri), Mumbai
upk/-
Typed on : 20.03.2023
Signed on : 20.03.2023
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