Final Order 5

Order Details: Copy of Judgment
Pdf Text: Summary Case No.5800030/SS/2021
Judgment Exh.60
MHMM180067022021
Filed on : 10.11.2021
Registered on: 10.11.2021
Decided on : 12.06.2025
Duration : 03-Y 07-M 02-D
IN THE COURT OF JUDICIAL MAGISTRATE(FIRST CLASS),
58TH COURT, BANDRA, MUMBAI.
(Presided over by M. P. Saraf)
Exh.60
Judgment
(As per Section 355 of Cr.P.C.)
Particulars of offence:
A. The serial number of the
case
: Summary Case
No.5800030/SS/2021
(CNR NO.MHMM180067022021)
B. The date of commission of
the offence
: 20.10.2021.
C. The name of the
complainant (if any)
: Mr. Moti Partabrai Tolani
Age : 82 years, Occ. Business,
R/o. At 19-B/6, Navjivan Colony,
Mori Road, Mahim, Mumbai-16.
D. The names of the accused
persons, and their
parentage and residence
: Mrs. Rehana Hyder Gola
Age : 64 years, Occ. Business,
R/o. At 5-J, 5th Floor, Naaz Cinema
Bldg., Lamington Road, Mumbai –
400 004 and at 707, 7th Floor,
Yasmin Tower, Ghas Gali Agripada,
Mambai-400 011.
E. The offence complained of
or proved
: U/sec.138 of the Negotiable
Instrument Act, 1881.
F. The plea of the accused
and their examination (if
any)
: The accused pleaded not guilty.
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G. The final order : The accused is acquitted of the
offence punishable under section
138 of the Negotiable Instrument
Act, 1881.
H. The date of such order : 12.06.2025.
Mr. Nagesh Mishra Advocate for the complainant.
Mr. Samrudha Ludbe Advocate for the accused.
JUDGMENT
(Delivered on 12.06.2025)
BRIEF STATEMENT OF THE REASONS FOR THE DECISION:-
Accused is tried for an offence punishable under section
138 of the Negotiable Instrument Act, 1881.
2. The case of the complainant is as follows –
Accused and her husband Mr. Hyder Ali Rahat Ali Gola
were to produce a Hindi feature Film titled as ‘Crime Girls’. They
requested him to provide finance of Rs.3 lakhs. He gave Rs.3 lakhs by
two cheques dated 07.03.2020 to the accused. He financed said
amount on the basis of fixed profit of Rs.22,500/- for three months.
Accordingly, accused executed writing dated 07.03.2020, Executed an
Agreement dated 10.07.2021 in his favour. On 06.09.2021 accused
issued subject cheque for repayment of finance alias loan borrowed by
her. The cheque was dishonored and returned unpaid for the reason
‘Funds Insufficient’ vide bank memo dated 14.09.2021 which was
received by him on 15.09.2021. Accused was called upon to make
payment of the dishonored cheque vide demand notice dated
30.09.2021. Accused received demand notice on 05.10.2021. However,
accused neglected to make payment. Hence, this complaint.
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3. To prove the offence punishable under section 138
following points have to be discussed and proved.
a) Does accused gave cheque to discharge her legal
liability.
b) Does complainant issued demand notice under section
138(b) to the accused.
c) Does the accused failed to pay the cheque amount
within 15 days to the complainant after receipt of the
demand notice.
4. The complainant has to prove above essential ingredients
under section 138 of the Negotiable Instruments Act. Once ingredients
are proved, initial presumption under section 139 of the Negotiable
Instruments Act is to be considered in favour of complainant shifting
the onus to rebut the presumption by the accused.
5. There is a mandate of presumption of consideration in
terms of the provisions of the Act and the onus shifts to the accused on
proof of issuance of cheque to rebut the presumption that the cheque
was issued not in discharge of any legal debt or liability in terms of
Section 138 of the Act.
6. In the judgment of 'Bir Singh V/s.Mukesh Kumar' (2019) 4
SCC 197, Hon'ble Supreme Court held that,
“the presumption u/sec.139 of the Negotiable Instruments Act
is in favour of the complainant. It is the statutory presumption.
The burden of rebuttal is on the accused. If the ingredients are
proved, the Court is bound to draw the presumption in favour
of the complainant”.
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7. The scope of Section 139 of the Act is that when an
accused has to rebut the presumption, the standard of proof for doing
so is that of "preponderance or probabilities" which has been examined
by a three-Judges Bench of Hon'ble Supreme Court in Rangappa V/s.
Sri Mohan ((2010) 11 SCC 441 : AIR 2010 SC 1898), which reads as
under:
“This is of course in the nature of a rebuttable presumption and
it is open to the accused to raise a defence wherein the
existence of a legally enforceable debt or liability can be
contested. However, there can be no doubt that there is an
initial presumption which favours the complainant. Section 139
of the Act is an example of a reverse onus clause that has been
included in furtherance of the legislative objective of improving
the credibility of negotiable instruments. While Section 138 of
the Act specifies a strong criminal remedy in relation to the
dishonour of cheques, the rebuttable presumption under
Section 139 is a device to prevent undue delay in the course of
litigation. However, it must be remembered that the offence
made punishable by Section 138 can be better described as a
regulatory offence since the bouncing of a cheque is largely in
the nature of a civil wrong whose impact is usually confined to
the private parties involved in commercial transactions. In such
a scenario, the test of proportionality should guide the
construction and interpretation of reverse onus clauses and the
defendant-accused cannot be expected to discharge an unduly
high standard or proof. In the absence of compelling
justifications, reverse onus clauses usually impose an
evidentiary burden and not a persuasive burden. Keeping this in
view, it is a settled position that when an accused has to rebut
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the presumption under Section 139, the standard of proof for
doing so is that of 'preponderance of probabilities'. Therefore, if
the accused is able to raise a probable defence which creates
doubts about the existence of legally enforceable debt or
liability, the prosecution can fail. As clarified in the citations,
the accused can rely on the materials submitted by the
complainant in order to raise such a defence and it is
conceivable that in some cases the accused may not need to
adduce evidence of his/her own.”
8. To discharge the initial burden of proof cast upon the
complainant to prove issuing subject cheque voluntarily by the accused
towards repayment of alleged amount of finance, complainant has
examined himself at Exh.17 as CW-01. Besides oral evidence
complainant has produced the bank statement of ICICI Bank for the
period 01.01.2020 to 31.03.2020 at Exh.24, the writing in the form of
Promissory Note dated 07.03.2020 at Exh.25, Agreement dated
10.07.2021 at Exh.26 and disputed cheque at Exh.27 alongwith cheque
return memo Exh.28, office copy of demand notice dated 30.09.2021 at
Exh.29 alongwith postal receipts at Exhs.30 and 31, postal track
consignment report at Exh.32 and 33.
9. Oral evidence of the complainant appears inconsistent with
his case of financing amount of Rs.3 lakhs to the accused. In complaint
and affidavit in lieu of examination in chief complainant states that he
provided finance of Rs.3 lakhs by two cheques. On the contrary in cross
examination he stated that he has not financed but given money on the
basis of fixed profit. His evidence further states that the Agreement
Exh.26 dated 10.07.2021 was not executed on the date of advancing
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money. He admitted that before executing said Agreement, accused
was paying him regularly upto execution of Agreement. He had not
mentioned the amount received from accused during said period.
10. Accused has came with a defence of money lending
transaction and misuse of her blank signed cheques. Complainant has
produced account statement for the period 01.01.2020 to 30.03.2020
at Exh.24. The entry dated 09.03.2020 in the statement shows that
accused paid Rs.50,000/- by cheque No.389 to the accused. Subsequent
entry dated 11.03.2020 shows making payment of Rs.2,50,000/- by the
complainant vide cheque No.390 to the accused.
11. The accused has taken defence of making said payment of
Rs.3 lakhs to the complainant and returning the same later on on
09.03.2020 and 11.03.2020. However, complainant has denied such
transaction. Therefore, it is indigestible to accept the defence of the
accused as probable and trustworthy merely on the basis of said entries
in the statement of account of the complainant in absence of oral
evidence of accused.
12. At the same time not mentioning receiving particular
amount from the accused by the complainant till executing agreement
dated 10.07.2021 Exh.26 and admission of payment made by the
accused given in cross examination by the complainant raises doubt as
to the nature of the transaction as well as existence of real outstanding
amount of liability. Therefore, the recitals of Agreement Exh.26 as well
as averments made in the demand notice Exh.29, complaint Exh.01 get
the importance while drawing any inference and conclusion as to the
nature of the transaction.
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13. The contents of demand notice Exh.29 clearly speaks as to
providing finance of Rs.3 lakhs against fixed profit of Rs.22,500/- by
the complainant to the accused. The averments made in the complaint
also clearly speaks about providing finance against fixed profit by the
complainant. Therefore, on the basis of pleadings of the complainant
himself, it is crystal clear that the transaction was of financing loan to
the accused though he has denied said suggestion in cross examination
contrary to his own pleading taking U turn to save from the clutches of
law. Man may speak lie but the documents never. The recitals of
Agreement dated 10.07.2021 at Exh.26 also speaks for providing
finance by the complainant to the accused against profit.
14. As the transaction in between parties is of finance against
profit, the defence of the accused as to money lending transaction
appears probable and trustworthy. It is submitted on behalf of
complainant that accused has not entered into witness box and
adduced cogent evidence as to money lending by the complainant.
However, for rebutting the presumption under section 139 of the Act, it
is not necessary for the accused to step into witness box. The averments
made in the demand notice and complaint itself, falsifies the case of the
complainant as to legal transaction resulting into legal debt or legal
liability as required under section 138 of the Negotiable Instrument
Act, 1881.
15. In the case of
M/s. Kumar Exports Vs. M/s. Sharma
Carpets (Criminal Appeal No.2045 of 2008), Hon'ble Supreme Court
has held that,
“
The use of phrase “until the contrary is proved” in section
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118 of the Act and use of the words “unless the contrary is
proved” in section 139 of the Act read with definitions of
“may presume” and “shall presume” as given in Section 4
of the Evidence Act, makes it at once clear that
presumption to be raised under both the provisions are
rebuttable. When a presumption is rebuttable, it only
points out that the party on whom lies the duty of going
forward with evidence, on the fact presumed and when
that party has produced evidence fairly and reasonably
tending to show that the real fact is not as presumed, the
purpose of the presumption is over. The accused in a trial
under section 138 of the Act has two options. He can
either show that consideration and debt did not exist or
that under the particular circumstances of the case the non-
existence of consideration and debt is so probable that a
prudent man ought to suppose that no consideration and
debt existed. To rebut the statutory presumptions an
accused is not expected to prove his defence beyond
reasonable doubt as is expected of the complainant in a
criminal trial.”
16. Advocate for complainant vehemently relied upon the
subsequent conduct of executing consent terms on 09.12.2021. He
submitted that thereby accused has admitted the existence of legal
liability to pay Rs.3,67,500/- that is more than the amount of disputed
cheque. Needless to state that the cheque Exh.27 dated 06.09.2021
bears signature of the accused. The consent terms also bears signature
of the accused. All the signatures of the accused are same as of her
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signatures on plea Exh.16, Promissory Note cum Guarantee Bond at
Exh.25, Agreement Exh.26, disputed cheque Exh.27 if compared with
his signature on the document of consent terms Exh.34 dated
09.12.2021 and cheque Exh.35 date 03.03.2022. The complaint is filed
on 10.11.2021. The consent terms seems to be executed in between
complainant and accused on the date of taking cognizance of the
complaint that is 09.12.2021. The process is issued on 01.04.2022
against the accused. Therefore, the document of consent terms Exh.34
being prior to taking cognizance of the complaint, has subsidiary
evidential value. It can not be accepted as a gospel truth of the facts
between the parties to consider the transaction as legal transaction. On
the contrary, failure of consent terms and dishonor of said cheque gives
rise to draw an inference of having custody of more than one blank
signed cheque of the accused with the complainant. There is reason to
believe to draw such inference considering the difference of ink of
signature of the accused on the cheques Exh.27, 35 and hand writing
on both cheques.
17. For attracting penal liability, voluntary issuance of cheque
against particular legal liability or legal debt is sine qua non. Existence
of legal liability to honor the cheque on the date of cheque is
indispensable to hold the accused guilty of committing an offence
under section 138 of the Act.
18. In that context let us see whether law permits such
transactions to consider existence of legal liability or legal debt.
Therefore, it appears necessary to go through the definition of ‘business
of money lending’, ‘interest’, ‘loan’, ‘money lender’ etc.
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19. Section 2(3) of The Maharashtra Money Lending
(Regulation) Act, 2014 defines ‘Business of money lending’. It means
the business of advancing loans whether in cash or kind and whether or
not in connection with, or in addition to any other business.
20. Section 2(9) of The Maharashtra Money Lending
(Regulation) Act, 2014 defines what is an ‘interest’. Interest includes,
any sum by whatsoever name called, in excess of the principal paid or
payable to a money lender in consideration of, or otherwise in respect
of, a loan but does not include any sum lawfully charged by a money
lender for, or, on account of costs, charges or expenses in accordance
with the provisions of this Act or any other law for the time being in
force.
21. Section 2(13) of The Maharashtra Money Lending
(Regulation) Act, 2014 defines what is ‘loan’. Loan means an advance
at interest whether of money or in kind but does not include the
various exceptions given in section 13(a) to 13(m) of the Act.
22. Section 2(14) of The Maharashtra Money Lending
(Regulation) Act, 2014 defines who is ‘money lender’. Money lender
means an individual; or an undivided Hindu Family; or a Company
other than a Non Banking Financial Company regulated under Chapter
IIIB of the Reserve Bank of India Act, 1934(2 of 1934), an
unincorported body of individuals etc.
23. It is submitted on behalf of complainant that he is not
doing money lending business and do not possess any such licence. In
that context the words providing finance by the complainant against
fixed profit get importance and compels to look into the provisions of
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The Maharashtra Money Lending (Regulation) Act, 2014. The
definition of business of money lending under section 2(3) of the Act
defines business of advancing loans in cash or kind. Interest is defined
as whatsoever amount or any sum in excess of the principal paid or
payable. So far as the loan by way of finance is concerned, the same
does not fall within the exceptions under section 13 (a) to 13(m) of the
Act. Therefore, only inference can be drawn that the transaction of
finance against fixed profit is nothing but a money lending transaction
in between complainant and accused.
24. Now once it is proved as money lending transaction,
complainant is bound by the provisions of The Maharashtra Money
Lending (Regulation) Act, 2014, which mandatorily requires obtaining
requisite money lending licence for indulging into such business
activity. Section 13 of the Act prohibits the courts to pass a decree in
favour of money lender who does not possess a valid licence. Therefore,
considering the nature of transaction of advancing particular amount
against fixed profit for three months or any term, falls within the ambit
of business of money lending as defined under section 2 (3) of the Act.
The finance comes within the ambit of definition of loan at interest as
defined under section 2(13) of the Act even though the same is below
Rs.3 lakhs.
25. No doubt in view of section 2(13)(j), the advance of any
sum exceeding Rs.3 lakhs made on the basis of negotiable instrument
as defined in the Negotiable Instrument Act other than a Promissory
Note is excluded within the ambit of definition of loan. However, even
though in present transaction the money is paid by cheques, the
subsequent act of getting executed Promissory Note Exh.25 by the
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complainant has barred the transaction. Under section 2(13)(j) the
transaction of an advance other than a Promissory Note is an exception
to the definition of loan.
26. Therefore, there is reason to believe that the transaction of
providing finance against a fixed profit amount by the complainant is
nothing but advancing a loan on interest without holding valid money
lending licence. The transaction being barred under section 13 of the
Maharashtra Money Lending (Regulation) Act, 2014, whatever amount
even though due towards accused can not be said to be a legal debt or
legal liability within the ambit of explanation to section 138 of the
Negotiable Instrument Act.
27. The complainant himself has falsified his case on the basis
of his pleadings and various documents placed on record. It is true that
the entries in bank account statement shows giving money by the
complainant to the accused by cheque but the same is not sufficient to
accept that subject cheque was voluntarily issued for its repayment or
in discharge of legal liability or debt in existence on the date of said
cheque. The transaction can not fall within the ambit and scope of
section 138 to hold issuing cheque in discharge of legal debt or liability.
The accused has successfully rebutted the presumption of law under
section 139 of the Act by bringing the suspicious circumstances as to
the transaction on record. Complainant has failed to prove said crucial
aspect to held the accused guilty under section 138 of the Act.
28. The dishonor of the cheque for the reason ‘Funds
Insufficient’ in the account of accused is not in dispute. Evidence on
record shows that accused was issued statutory notice Exh.29 by
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registered post by the complainant. The Track Consignment Report of
India Post at Exh.32 is self sufficient to accept the contention of
complainant as to delivery of the notice to the accused. Accused has not
replied notice. Accused has not challenged correctness of address of
notice. Therefore, in view of presumption under section 27 of General
Clauses Act, there is reason to believe that accused has received the
notice but failed to reply the same. Not giving notice reply by the
accused may be one of the incriminating substance against her but once
the transaction is held illegal, drawing an adverse inference against
accused on the basis of negligent post conduct is of no use to declare
existence of legal liability much less it will take place of proof.
29. To sum up, complainant has measurably failed to prove
existence of legal liability or debt on the date of cheque and issuing
subject cheque towards such liability. There is reason to believe defence
of the accused as to misuse of her blank signed cheque issued towards
security of earlier transaction. The difference of ink of signature and
hand writing speaks for material alteration of a negotiable instrument
rendering the same void under section 87 of the Act. The transaction
being of an illegal money lending, penal liability would not attract as
contemplated under section 138 of the Act.
30. The complainant has failed to prove that accused has
committed the offence punishable under section 138 of Negotiable
Instruments Act, 1881. Thus, accused is entitled for acquital.
Accordingly, I proceed to pass following order.
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ORDER
1. The accused is acquitted of the offence punishable under
section 138 of the Negotiable Instruments Act, 1881 vide
section 255(1) of The Criminal Procedure Code and section
278 (1) of the Bhartiya Nagarik Suraksha Sanhita, 2023.
2. Bail bond of accused stands cancelled.
3. The accused to comply section 437(A) of Code of Criminal
Procedure and section 481 of the Bhartiya Nagarik Suraksha
Sanhita, 2023 and furnish surety for further period of six
months from today.
(Judgment dictated and pronounced in open Court).
( M. P. Saraf )
Judicial Magistrate(First Class),
Date : 12.06.2025 58th Court, Bandra, Mumbai.
J.O.Code: MH01362
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CERTIFICATE
I affirm that the contents of this P.D.F. file Judgment are same, word to word as per
the original Judgment.
Name of Stenographer : Mrs. Aditi Ravikiran Dalvi.
Court : Judicial Magistrate(First Class), 58th Court,
Bandra, Mumbai.
Dictated in open court on : 12.06.2025.
Transcribed and Typed on : 12.06.2025.
Judgment printed and Signed on : 12.06.2025.
Judgment Uploaded on : 13.06.2025.
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