Final Order 2

Order Details: Copy of Judgment .
Pdf Text: C.C. NO. 5607893/SC/2024 ::1:: JUDGMENT
(Para 44(i) of Chapter VI of Criminal Manual)
MHMM120194
852024 IN THE COURT OF JUDICIAL
MAGISTRATE
FIRST CLASS, 56th COURT,
MAZGAON, MUMBAI
(Presided over by Shri. D. A. Argade)
Date of the Judgment 20/04/2026
C.C.No.5607893/SC/2024
Offence punishable under Section 138 of the
Negotiable Instrument Act, 1881
Complainant M/s. Western Traders
Nasir Loladia @ Nazir
Address : 34/ Bara Imam Road, Mumbai
Represented
by
Adv. Mujawar
Accused 1) Ykgn Forging
Address : Gala No.7a, 1st Lane, Sitafalwadi, Dr.
Macsgrenhas Road, Mazgaon, Mumbai
2) Mohd. Salman
Proprietor of Accused No.1
Address : Room No.3121, Dhanvi baugh, Dhanvi
Waliv, Palghar, Maharashtra
Represented
by
Adv. A. J. Rajbhar
(Para 44(ii) of Chapter VI of Criminal Manual)
Date of offence 07/06/2024
Date of FIR/Complaint 25/06/2024
Date of Charge sheet ---
Date of Framing of Charge / Plea 26/11/2024
Date of commencement of evidence 07/05/2025
Date on which judgment is reserved ---
Date of the Judgment 20/04/2026
Date of the Sentencing order, if any 20/04/2026
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Accused Details
Rank
of the
Accu
sed
Name
of
Accuse
d
Dat
e of
Arr
est
Date
of
Rele
ase
on
bail
Offenc
e
charge
d with
Wheth
er
acquitt
ed or
convic
ted
Sentence
imposed
Period of
Detention
undergone
during Trial
for purpose
of Section
428 Cr.P.C.
1 Ykgn
Forgin
g
Mohd.
Salman
--- --- U/s.138
of N.I.
Act
Convict
ed
compensa
tion
---
2 Mohd.
Salman
--- --- U/s.138
of N.I.
Act
Convict
ed
Imprisonm
ent &
compensat
ion
---
Para 44(iii) of Chapter VI of Criminal Manual)
LIST OF PROSECUTION / DEFENCE / COURT
WITNESSES
A. Prosecution:
Rank Name Nature of Evidence
(Eyewitnesses, Police Witnesses, Expert
Witnesses, Medical Witnesses, Panch
witnesses, other witnesses)
1 Nasir Laladia
@ Nazir
Representative of Complainant
B. Defence Witnesses, if any:
Rank Name Nature of Evidence
(Eyewitnesses, Police Witnesses, Expert
Witnesses, Medical Witnesses, Panch
witnesses, other witnesses)
--- --- ---
C. Court Witnesses, if any:
Rank Name Nature of Evidence
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(Eyewitnesses, Police Witnesses, Expert
Witnesses, Medical Witnesses, Panch witnesses,
other witnesses)
--- --- ---
LIST OF PROSECUTION / DEFENCE/ COURT EXHIBITS
A. Prosecution:
Sr.No. Exhibit No. Description
1 13 Invoice
2 14 Disputed Cheque
3 19 Cheque Return Memo
4 15 Demand Notice
5 16 Postal Receipts
6 17 Postal Envelops
B. Defence:
Sr.No. Exhibit
Number
Description
--- --- ---
C. Court Exhibits:
Sr.No. Exhibit
Number
Description
--- --- ---
D. Material Objects:
Sr.No. Material Object
Number
Description
--- --- ---
J U D G M E N T
(Delivered on 20/04/2026)
1. The accused are facing trial for the offence punishable under
Section 138 of the Negotiable Instrument Act, 1881 (in short ‘the
N.I. Act').
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2. The case of the complainant in nutshell is as under-
Accused No.1 is proprietary concern and accused No.2 is its
proprietor. The complainant sold and supplied the goods bolts and
nuts to the accused vide invoice of worth Rs.2,69,394/-. Out of
which, accused No.2 made part payment of Rs.1,50,000/-. An
amount of Rs.1,19,394/- was outstanding. In discharge of the said
liability, they issued the complainant cheque bearing No.006545
dated 30/01/2024 for Rs.1,19,394/-. The complainant presented
the same in its bank. On 22/04/2024, the cheque was dishonoured
for the reason funds insufficient. The bank issued cheque return
memo. On 20/05/2024, the complainant issued the accused a
demand notice by registered post. The postal envelops containing
the notice were returned with remark insufficient address o
24/05/2024. The notices were deemed to be served upon them on
24/05/2024. They failed to pay the amount of cheque within 15
days. Hence, the complainant filed the compliant.
3. On presentation of the complaint, process was issued against
the accused for the offence punishable under Section 138 of the
N.I. Act. Accused No.2 appeared for himself and for accused
No.1. The particulars of the offence were read over and explained
to him in vernacular. He pleaded not guilty for himself and for
accused No.1 and claimed to be tried.
4. Accused No.2 was not remaining present for himself and for
accused No. 1. They were avoiding to record their statement vide
Section 313 of the Code of Criminal Procedure, 1973 (in short
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‘the Cr.P.C.’). In view of ratio laid down by Hon’ble Bombay
High Court in the case of Prakash Chimanlal Sheth V/s. T.
Ramalingan Nadar and others reported in 2022 SCC Online
Bom 10161, the statements of the accused were dispensed with.
5. The following points arise for my determination and I
record their findings, with reasons, as under.
SR. NO. POINTS FINDINGS
1) Does the complainant prove that cheque
No.006545 dated 30/01/2024 for
Rs.1,19,394/- was drawn by the accused
for the discharge of any debt or legally
enforceable liability ? ….. Yes
2) Does the complainant prove that the
accused dishonoured the above cheque? ….. Yes
3) Does the complainant prove that it made
demand for the above cheque amount by
giving a notice in writing to the accused
within 30 days from the receipt of
information from the bank regarding the
return of the cheque unpaid ? ….. Yes
4) Does the complainant prove that the
accused failed to make the payment of
the cheque within 15 days from the
receipt of the notice? ….. Yes
5) What order? ….. As per
operative
order
R E A S O N S
6. In order to substantiate the allegations levelled against the
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accused, the complainant has examined its representative Nasir
Loladia @ Nazir as witness No.1 (CW1). Moreover, it has relied
on invoice, cheque, cheque return memo, office copy of demand
notice, receipt of post and postal envelops.
7. Now it would be apposite to examine some broad and
general submissions made by both parties. The learned advocate
for the complainant has submitted that the accused issued the
disputed cheque for payment of outstanding amount and the same
was dishonored. Per contra, no argument was advanced on behalf
of the accused.
8. In order to verify the authenticity of the argument of the
learned advocate for the complainant, the case of the complainant
and the oral and documentary evidence placed before the Court
will have to be scrutinized. It would be just to scrutinize the
evidence while discussing the points one by one.
AS TO POINT NO. 1 :-
9. In order to appreciate the controversial aspects, a reference
is required to be made to evidence of the CW1 Nasir Loladia @
Nazir. He has filed his examination-in-chief by way of an
evidence affidavit. He has deposed in his evidence affidavit that
accused No.1 is proprietary concern and accused No.2 is its
proprietor. He has further deposed in his evidence affidavit that
the complainant sold and supplied the goods such as bolts and
nuts to the accused vide invoice of worth Rs.2,69,394/-. He has
further deposed in his evidence affidavit that accused No.2 made
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part payment of Rs.1,50,000/- and the amount of Rs.1,19,394/-
was due. He has also deposed in his evidence affidavit that in
discharge of the said liability, the accused issued the complainant
disputed cheque but the same was dishonoured for the reason
funds insufficient. The accused failed to conduct his cross-
examination. Hence, his testimony remained unchallenged.
10. The disputed cheque at exhibit 14 was referred to in
evidence affidavit of CW1 Nasir. The said cheque shows the
name of accused No.1 as drawer and the name of the complainant
as payee. The signatures of the drawer appear thereon is the same
that of the signature of accused No.2 seen on plea at exhibit 11,
vakalatnama at exhibit 8 and PR Bond at exhibit 10. Therefore, it
is clear that the disputed cheque bears his signature for accused
No.1.
11. The invoice at exhibit 13 is seen to be referred to in
evidence affidavit of CW1 Nasir. The address of accused No.1
mentioned therein is the same that of address of accused No.1
mentioned in the complaint and the demand notice. It further
bears the signature of manager/proprietor of the complainant. It
also shows that the goods of worth Rs.2,69,394/- were supplied to
accused No.1. Hence, it is clear that the complainant sold and
supplied the goods of worth Rs.2,69,394/- to accused No.1.
12. It has come in testimony of CW1 Nasir that accused No.2
already made part payment Rs.1,50,000/-. Since the disputed
cheque bears signature of accused No.2 for accused No.1, the
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said cheque must have been issued by them to the complainant for
the goods purchased by them. Hence, it is clear that the said
transaction is legal.
13. The presumption under Section 139 of the N.I. Act places
the evidential burden on the accused for proving that the cheque
was not issued in discharge of their liability. Thus, burden was on
them to disprove the existence of any legally recoverable debt or
liability. But in vain. They have failed to disprove the existence of
any legally recoverable debt or liability. In view of this, the
disputed cheque issued by them to the complainant has legal
sanctity. Hence, the disputed cheque comes under purview of the
above legal transaction between them. Therefore, it is proved that
the disputed cheque was drawn by the accused for the discharge
of legally enforceable liability. Thus, the finding of point No. 1 is
recorded accordingly.
AS TO POINT NO. 2 :-
14. It is to be ascertained as to whether the accused dishonoured
the cheque. Black's Law Dictionary defines the term 'Dishonour'
as follows :-
''Dishonour – to refuse to accept or pay a draft or
to pay a promissory note when duly presented. An
instrument is dishonoured when a necessary or
optional presentation is duly made and due
acceptance or payment is refused, or cannot be
obtained within the prescribed time, or in case of
bank collection, the instrument is reasonably
returned by the midnight deadline; or presentation
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is excused and the instrument is not duly accepted
or paid.''
15. As seen from evidence affidavit of CW1 Nasir, the
complainant deposited the disputed cheque in Union Bank of
India, Duncan Road Branch, Mumbai. It is also seen in his
evidence affidavit that on 22/04/2024, the said cheque was
returned with memo by the bank unpaid with endorsement of
“funds insufficient”. The bank memo at exhibit 19 shows that the
cheque was returned with endorsement “funds insufficient”. It
means the cheque was returned unpaid. Therefore, it is proved
that the accused dishonoured the cheque. Thus, the finding of
point No.2 is recorded accordingly.
AS TO POINT NO. 3 :-
16. It is to be ascertained as to whether the complainant made
demand of the cheque amount by giving a notice in writing to the
accused within 30 days from the receipt of information from the
bank regarding the return of cheque unpaid. In evidence affidavit
of CW1 Nasir, he has deposed that the complainant issued the
accused a demand notice dated 20/05/024 by registered post for
demanding the amount of the cheque after dishonour. The office
copy of the demand notice at exhibit 15 shows that the
complainant demanded the accused the amount of the cheque.
Needless to say that the cheque was dishourned on 22/04/2024.
17. As seen from the postal envelops exhibit 17, the same were
returned with endorsement insufficient address on 24/05/2024.
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Section 27 of General Clauses Act, 1897 deals with meaning of
service by post. It establishes a legal presumption about service of
documents by post. It says that if a law requires or authorizes
service by post, then service is deemed effective once the letter is
properly addressed, prepaid, and sent by registered post unless a
contrary intention appears. The address of accused No.1
mentioned on postal envelop of the demand notice is the same
that of its address mentioned in the tax invoice. The address of
accused No.2 mentioned on postal envelop of the demand notice
is the same mentioned on his PR Bond at exhibit 10. Therefore,
the notice is deemed to be served upon the accused on
24/05/2024. Needless to say that the cheque was returned by the
bank of 22/04/2024. Therefore, it is proved that the demand
notice dated 20/05/2024 issued by the complainant was duly
served on the accused and the said notice was issued to them
within 30 days from the receipt of information from the bank
regarding the return of the cheque unpaid. Thus, the finding of
point No. 3 is recorded accordingly.
AS TO POINT NO. 4 :-
18. Now it is to be ascertained as to whether the accused failed
to make the payment of the amount of the cheque within 15 days
from the receipt of the notice. It is evident in testimony of CW1
Nasir that the accused did not pay the complainant the amount of
the cheque despite the receipt of the notice. It is already proved
that the demand notice dated 20/05/2024 was served upon them
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on 24/05/2024. However, they failed to make the payment of the
amount of the cheque within 15 days from such intimation.
Therefore, it is proved that they failed to make the payment of the
amount of the cheque within 15 days from receipt of notice. Thus,
the finding of point No. 4 is recorded accordingly.
AS TO POINT NO. 5 :-
19. In the above discussions and findings of point Nos. 1 to 4, I
have tried to separate the grains from the chaffs i.e. truth from
falsehood. The fundamental ingredients of the offence under
Section 138 of the N.I. Act are proved against accused Nos.1 and
2. Hence, this Court comes to conclusion that the offence
punishable under Section 138 of the N. I. Act is proved against
them beyond reasonable doubt. I, therefore, hold them guilty for
having committed an offence punishable under Section 138 of the
N.I. Act. This is an economical offence. Hence, I do not seem to
be justifiable to release the accused on probation of good conduct
as per the Probation of Offenders Act, 1958.
20. In order to pass a sentence to accused Nos.1 and 2 they can
be given an opportunity. But they are absent. They do not attend
the Court. In view of Section 143(3) of the N.I.Act, every trial
under this section shall be conducted as expeditiously as possible
and endeavour shall be made to conclude the trial within six
months from the date of filing of the complaint. There is no
provision under Chapter XX of the Cr.P.C. to hear the accused on
the point of sentence as found in Section 248(2) of Chapter IXX
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of the Cr.P.C. However, all the mitigating factors in favour of the
accused are considered.
21. The punishment provided for the offence under Section 138
of the N.I. Act is imprisonment for the term which may extend to
two years or with a fine which may extend to twice the amount of
cheque or with both. Accused Nos.1 and 2 did not pay the
outstanding amount to the complainant. To discharge the said
liability, they issued the disputed cheque. Moreover, they were
well aware of the consequences of issuing the cheque. If the
complainant had sold the goods to some other person, it would
have earned profit.
22. The punishment should be proportionate to the act. The
main purpose of Section 138 of the N. I. Act is not just to punish
the drawer of a dishonoured cheque i.e. the accused, but to see
that the complainant gets the money due to it. Since the dishonour
of the disputed cheque involved a financial loss to the
complainant, awarding a compensation to it under Section 357(3)
of the Cr.P.C. would serve the purpose of justice. Hence,
imposing a sentence of simple imprisonment for six months and a
compensation amount equal to the disputed cheque amount with
9% interest per annum from the date of the complaint till actual
realization as compensation would meet the ends of justice. In the
result, following order is passed.
ORDER
1) The accused are convicted of the offence
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punishable under Section 138 of the Negotiable
Instruments Act, 1881 vide Section 255(2) of the
Code of Criminal Procedure, 1973 and accused
No.2 is sentenced to suffer simple imprisonment for
six months.
2) The accused shall pay the complainant a
compensation of Rs.1,19,394/-(One Lakh Nineteen
Thousand Three Hundred Ninety Four only) along
with 9% simple interest per annum from the date of
filing of complaint till actual realization thereof
vide Section 357(3) of the Code of Criminal
Procedure, 1973 and in default, accused Nos.2
shall undergo simple imprisonment for three
months.
3) The bail bond of the accused, if any, stands
surrendered.
4) The copy of this judgment be given to the
accused free of cost.
(D. A. Argade)
Mazgaon Judicial Magistrate (First Class)
Date 20/04/2026 56th Court, Mazgaon, Mumbai
[
Dictated on 20/04/2026
Typed on 20/04/2026
Ready on 20/04/2026
Signed on 20/04/2026
Rgz.
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