Final Order 1

Order Details: Copy of Judgment .
Pdf Text: CNR No.MHMM120040632022 Presented on : 22.03.2022
Registered on : 07.04.2022
Decided on : 16.02.2023
Duration : 25 : 10 : 00
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 : 0601970/SC/2022
b) Date of commission of offence : 27.01.2022
c) Name of complainant : Manohar Singh Kothari
Age 71 years, Occ. : Business
Proprietor of M/s. Kothari Steel
Syndicate
Add. : 202/203, Gupta Bhavan,
S. T. Road, Carnac Bunder,
Mumbai 400 009
d) Names of accused : 1. Rajesh Hareshchand Sharma
Age 45 years, Occ. : Business
Proprietor of M/s. Navdurga Steel
Traders
Add. : Room No.33, Latif House,
2nd floor, S. T. Road, Carnac
Bunder, Mumbai 400 009
AND
R/o. : B/5, West View, G. B. Road,
Santacruz West, Mumbai 400 054
2. M/s. Navdurga Steel Traders
Add. : Room No.33, Latif House,
2nd floor, S. T. Road, Carnac
Bunder, Mumbai 400 009
e) Offence complained of and
proved
: Under section 138 of the
Negotiable Instruments Act.
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f) Plea of the accused : Accused pleaded not guilty and
claimed to be tried.
g) Final order : Accused are convicted.
h) Date of final order : 16.02.2023
Appearance :
For complainant - Advocate Kosambi
For accused - Advocate Bharati Kulkarni
JUDGMENT
(Delivered on 16th day of February 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:
The complainant is sole proprietor of M/s. Kothari Steel
Syndicate, engaged in the business of trading in coils and supplying the same
to various industrial units in Maharashtra. Accused No.2 is a proprietary
concern of which the accused No.1 is the sole proprietor and solely in-charge
and responsible for conducting the day to day business, management, affairs
and operations of the accused No.2 and has also been looking after the
banking and financial operations of the accused No.2. Accused No.1 has
signed various documents like purchase orders, agreements, declarations,
returns, cheques and such other instruments on behalf of the accused No.1 as
sole proprietor. Accused No.1 also have personally interacted with the
complainant for purchasing the goods. In pursuance of the purchase orders
placed by accused No.1, the complainant has sold, supplied and delivered
various types of coils worth Rs.59,02,70/- under various bills as mentioned in
para No.3 of complaint. The accused duly received the said coil and
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acknowledged the receipt of goods. Accused No.1 have never raised any
dispute about the quality, quantity or price of the said coil or the aforesaid
invoices. After lots of follow up for the payment of aforesaid invoices,
accused issued 19 cheques total worth of Rs.59,02,970/- all dated 27.01.2022
drawn on Union Bank of India, Bhat Bazar branch, Mumbai in favour of
complainant. As per instructions of accused No.1, cheques were deposited into
bank account of complainant. The said disputed cheques were dishonoured
with remark “funds insufficient” vide memos dated 27.01.2022.
3. The complainant sent statutory notice dated 16.02.2022 calling
upon the accused to pay the said dishonoured cheques amount within
stipulated time by R.P.A.D. at the given address. Notice sent to the address
has been duly received by accused as advocate of complainant has received
postal acknowledgement card. The accused have failed and neglected to pay
the dishonoured cheque amount hence this complaint.
4. On dated 05.05.2022, issue process order 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 him in vernacular vide Exh.15.
6. The statement of accused under section 313 of the Code of
Criminal Procedure, 1973 was recorded vide Exh.57 & Exh.65, accused
submitted that, false case filed against him and his PDC have been misused by
complainant. Totally false case, no legal liability is on part of accused. Just to
grab the money from accused, his earlier cheques were miused.
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7. Heard learned advocates for both the sides. The learned
advocate for the complainant has filed written argument at length. The learned
advocate for the accused also filed written argument vide Exh.59. 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 19 cheques total worth of
Rs.59,02,970/- all dated 27.01.2022 drawn on
Union Bank of India, Bhat Bazar branch,
Mumbai for discharge of legal enforceable
debt or liability ?
Yes..
2 Whether the complainant proves that the
cheques were presented within a prescribed
period and those were dishonoured for the
reason “funds insufficient” ?
Yes..
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..
4 Whether complainant proves that accused
failed to repay the cheque amount within 15
days of receipt of notice ?
Yes..
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5 Whether the complainant proves that the
accused has committed offence punishable u/s
138 of Negotiable Instruments Act 1882 ?
Yes..
6 What order ? Accused are convicted
as per final order.
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. 11 Original tax invoices bearing
signature of authorized of persons
like Nilesh and Swapnali Exh.17 to Exh.27
2. Original 19 disputed cheques Exh.28 to 46
3. Two cheque returned memos Exh.47 & Exh.48
4. Statutory demand notice Exh.49
5. Three postal charges receipts Exh.50 (colly.)
6. Three copies of track consignment Article – A (colly.)
By way of filing pursis Exh.56, the complainant closed his
evidence.
9. In support of his case, the accused has not examined himself or
any other witness.
As to point Nos.1 to 5 :
10. As far as presentation of cheques within its validity period and
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dishonour is concerned it has not been disputed by the accused at all.
Moreover, complainant has placed on record original cheques at Exh.28 to
Exh.46 and cheque return memos at Exh.47 & Exh.48 proved that cheques
dated 27.01.2022 were presented and dishonoured on 27.01.2022 for the
reason “Funds Insufficient” which is sufficient to hold that cheques were
presented within its validity period which got dishonoured.
11. As far as issuance of notice and its service is concerned, accused
has denied service of notice. On the contrary while recording statement u/sec.
313 of Code of Criminal Procedure, they admitted to have received the notice.
Moreover, complainant has also placed on record office copy of notice Exh.49,
postal receipt Exh.50 (Colly.). 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.
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
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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".
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
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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 Kosambi appearing for the complainant filed written
argument & submitted that, complainant is proprietor of M/s. Kothari Steel
Syndicate. Accused No.1 Rajesh Hareshachand Sharma is proprietor of the
M/s. Navdurg Steel Traders. The advocate further submitted that complainant
supplied materials i.e. coils from date 18.06.2019 to 11.07.2019 of
Rs.59,02,970/- to accused. The complainant has proved all invoices. As
material have been supplied to accused and received by accused, accused
issued disputed 19 cheques, when those cheques were deposited those were
dishonoured for the reasons “funds insufficient”. The complainant has proved
the disputed cheques and cheque returned memos. The complainant has
proved the notice & invoices on the record. The complainant has proved its
case beyond all reasonable doubt. Hence she prayed for conviction of the
accused.
17. Advocate Bharati Kulkarni appearing for the accused filed
written argument as per Exh.59. As per written argument of the accused, there
should be legal enforceable debt or liability prima facie burden is on the
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complainant, the complainant is required to bring all documentary evidence on
record about his case, mere exhibiting the documents do not amount to its
proof as legal evidence, so also complainant has failed to prove above all
facts. It is further submitted by the advocate of the accused that complainant
has failed to prove notice, track consignment report, certificate under section
65-B of the Indian Evidence Act. The defence of the accused is that accused
did not receive any goods, PDC cheques given by accused were misused by
the complainant to grab money from accused. On all these grounds, she
submitted that accused has rebutted presumptions in favour of the
complainant. The accused has brought his defence up to extent of
preponderance of probability which is sufficient to discard the case of the
complainant. The complainant has failed to prove its case beyond all
reasonable doubts. So she prayed for acquittal of the accused.
18. In order to support his case, the complainant has examined by
filing his affidavit as per Exh.5 & he stated as per contents of the complaint.
The complainant has filed on record copies of invoices as per Exh.17 to
Exh.27. Those bear signature of the employees of the complainant. The
complainant has led evidence in respect of the said tax invoices. Complainant
has also proved disputed cheques Exh.28 to Exh.46 as those were signed by
accused. The complainant has brought substantial evidence about cheque
returned memos at Exh.47 & Exh.48 for all 19 cheques, for reasons funds
insufficient. The said Exh.47 & Exh.48 bear seal and signature of the Bank
Officer. So those can be read in evidence as per section 146 of the Negotiable
Instruments Act. The complainant has also led evidence as to fact of issuance
of notice & receipt of it by the accused. The accused did not pay the amount
inspite of receipt of notice. Therefore, complainant has filed complaint. The
documents filed by complainant corroborates their case.
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19. The defence of the accused shows that complainant has not filed
on record delivery challans, transport receipts. The invoices on record at
Exh.17 to Exh.28 are not signed by the complainant. The complainant has
also admitted in cross-examination that some invoices are signed by one
employee and some are signed by others. So far as these points are concerned,
complainant has not filed on record delivery challans & transport receipt.
Those invoices do not bear signature of the complainant. As the complainant
has not signed the said invoices, it does not mean that those were not prepared
at the computers which were controlled by complainant. Mere non-filing of
challans & transport receipt on the record cannot be ground to discard the case
of the complainant. The complainant has come with evidence that, he
delivered goods to the accused. Then heavy burden is on the accused to show
that he did not receive goods, however accused did not lead his evidence.
20. It is pertinent to note that as per settled provisions, presumptions
under section 139 & 118 of the Negotiable Instruments Act are in favour of the
complainant. So accused is only to rebut presumptions. Accused may raise
his defence to rebut the case of the complainant by taking cross-examination
of the complainant & he may take defence by examining himself. In this case,
accused took his defence through the cross-examination of the complainant.
As per the defence of the accused, notice is not received by accused.
Moreover, advocate of the accused has pointed out that notice bears date
16.02.2022 & report of postal charges shows that notice is sent to accused on
15.02.2022. This fact itself falsifies case of the complainant. So advocate of
accused prayed that complainant has failed to prove one of the ingredients of
section 138 of Negotiable Instruments Act. Hence, complaint is not tenable in
the eye of law. So far as submission of the advocate of the accused is
concerned, no doubt it is apparent from the statutory notice that it bears date
16.02.2022, if it is so then how notice is sent on 15.02.2022. To cure this
defect, complainant filed application under section 311 of Cr.P.C. for recalling
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complainant and examined him, he stated that date on notice i.e. 16.02.2022 is
written by mistake. No doubt as submitted by advocate of accused, there is
material inconsistence about date of notice & date of sending it. Generally
date of preparation of notice or date of notice should be first, then date of
sending notice will be next date or some times it may be the same date but not
as submitted by advocate of accused.
21. For the moment if it is held that, there is inconsistency in the
date of notice & date of sending notice, accused has not specifically denied to
have not received notice. Moreover, intimation of dishonour of the cheque is
material & notice should have been sent within prescribed period from the
date of dishonour of the cheque. In respect of sending notice within
prescribed period, nothing is asked to complainant during his cross-
examination. The said notice appears to have been sent within 20 days, when
there is time limit of 30 days. Some time there is possibility of occurring such
mistake of putting date. On that grounds it can't be said that notice is not valid
& is not duly served on accused. So also on perusal of the statement of the
accused as per section 313 of Cr.P.C., accused has stated that he received
statutory notice & as he was out of state, he could not file reply to it. All these
facts support the case of the complainant about issuance of notice & its service
on accused. Hence, submission of the advocate of the accused that accused
did not receive notice & there is inconsistency in the date of preparing notice
& date of sending notice is not helpful for the accused.
22. The main defence of the accused is that PDC i.e. 19 cheques
were given to complainant & those were misused by the complainant. If it is
defence of the accused so, then accused should at least show that for what
purpose he gave PDC cheques to the complainant. There are 19 cheques. A
lay man cannot give 19 cheques with his signatures to anyone without any
transaction or purpose. There should be some reasons for giving cheques but
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accused did not do the same. For the moment if it is held to be true that PDC
cheques given to complainant were used & transaction had not taken place
with complainant, then accused should have replied to the notice of
complainant challenging misuse of the said cheques. So also accused would
have made complaint with police station about misuse of the cheques but he
did not do so. It is also not defence of accused if disputed cheques were given
for other transaction than the alleged transaction in the complainant. The
defence of the accused about misuse of PDC by complainant appears to be not
probable one.
23. In respect of certificate under section 65 (b) of the Indian
Evidence Act, the accused has come with case that, complainant has produced
certificate under section 65 (b) of the Indian Evidence Act but it is not duly
proved & it is in respect of track consignment of post office of sending notice
but as stated in earlier paras in receipt of notice by accused, non proving
certificate is not useful for the accused. In respect of invoices, there is no
certificate of the complainant under section 65 (b) of the Indian Evidence Act.
Hence, she relied on M/s. Indus Airways Pvt. Ltd. & others Vs. M/s.
Magnum Aviation Pvt. Ltd. & others All M.R. 2014 (Cri.) page 1948, in
which Hon'ble Apex Court held that if certificate is not there as per section 65
(b) of the Indian Evidence Act & if it is not given by appropriate person, then
invoices raised on computer cannot be said to be legally proved. So far as
above submission of the advocate of the accused is concerned, in recent case
M. Abbas Haji Vs. T. N. Channakeshava dated 23.09.2019, it has been held
by Hon'ble Apex Court that in cases of Negotiable Instruments Act, it is for the
accused to explain as to how his cheques have entered in the hands of the
accused. In the case in hand, there is no substantial defence of the accused, as
to how the disputed cheques of accused were in the hands of complainant. So
also advocate of the complainant relied on Vodafone Essar Ltd. Vs. Raju
Sud dated 22.11.2011, in the said case it was civil suit, facts in the said case
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are total different than the case in hand. Hence, it is not helpful for the
complainant. The advocate of the complainant further relied on Prakash
Bansod Vs. Sanjay Agre, dated 12.05.2020, in which Hon'ble Bombay High
Court held that mere denial by accused is not sufficient, accused should bring
convincing evidence on record. In the case in hand, accused has not brought
convincing evidence on record. Moreover, complainant has relied on B. M.
Basavraj Vs. Shrinivas S. Datta dated 05.04.2016, in which Hon'ble Apex
Court held that complainant does not need to produce document of supply of
goods to show his liability. Even recent view in case of P. Rashiya Vs. Abdul
Nazir & others dated 12.08.2022, the Hon'ble Apex Court held that due to
presumption under section 139 of N. I. Act, once the signature on the disputed
cheques are not in dispute, the compalinant is not required to spell out in the
complaint nature of the transaction since the onus is on the accused to prove
the cheque was not issued towards debt & liability. All these cases are helpful
for the complainant.
24. The complainant has brought substantial evidence about the
supply of goods to accused 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.
As to point No. 6 :
25. 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.
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138 of Negotiable Instrument Act vide 255(2) of Code of Criminal Procedure.
So I stop here to hear the accused Nos.1 & 2 on the point of quantum of
punishment.
(A. S. Chonde)
Mumbai Metropolitan Magistrate,
Date : 16.02.2023 6th Court, Mazgaon (Sewri), Mumbai
26. Heard learned advocate for complainant and defence counsel.
Advocate for complainant has prayed to punish the accused to maximum
extent and also prayed to impose fine double the cheque amount and for
compensation. The accused No.1 submitted that, his father is 83 years old. He
has two children, out of them boy is abnormal and daughter is college going
student. If he is sent to jail, his family members will face starvation.
Therefore, he prayed for lenient view. The learned defence counsel submitted
on the footstep of accused and prayed for minimum fine and prayed for lenient
view.
27. 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 is of the year 2022 and transaction took place in the year
2019, near about three years have been lapsed. It would be proper to impose
sentence for one (01) year and compensation.
28. In the circumstance of the case and considering the source of
income of accused No.1 and his responsibilities I feel that sentence to undergo
simple imprisonment for the term of one year and direction to pay
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compensation of Rs.59,02,970/- 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 are convicted vide section 255 (2) of Cr.P.C. for the offence
punishable under section 138 or 138 read with 141 of the Negotiable
Instruments Act.
ii) Accused No.1 is sentenced to suffer simple imprisonment of one (01)
year.
iii) Accused are directed to pay jointly and severally to the complainant
compensation to the tune of Rs.59,02,970/- (Fifty nine lakhs two
thousand nine hundred seventy), in default the accused to undergo
Simple Imprisonment for three (03) months.
iv) The amount of compensation shall be paid to the complainant on due
verification after the appeal period is over.
v) Accused No.1 to surrender his bail bonds.
vi) Copy of this Judgment be supplied free of costs to the accused.
vii) Judgment is pronounced in open Court.
(A. S. Chonde)
Mumbai Metropolitan Magistrate,
Date : 16.02.2023 6th Court, Mazgaon (Sewri), Mumbai
upk/-
Typed on : 16.02.2023
Signed on : 16.02.2023
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