Final Order 4

Order Details: Copy of Judgment
Pdf Text: MHMM180078932021 Received On : 10.08.2020
Registered on : 29.12.2021
Decided on : 02.05.2026
Duration : 05 Y 08 M 22 D
Part ‘A’
(Para 44(i) of Chapter VI of Criminal Manual)
IN THE COURT OF JUDICIAL MAGISTRATE, FIRST CLASS,
58TH COURT, BANDRA, MUMBAI
(Presided over by : Mahesh Prabhakar Saraf)
Summary Case No.5800144/SC/2021
JUDGMENT Exh.40
(Delivered on 02nd May, 2026)
Prosecution/
Complainant : Mr. Stephen Sebastian
Proprietor M/s. Tads Tours and Travels,
Age : Adult, Occ. Business,
R/o. 25/1335, M.H.B.Colony, Khernagar,
Bandra (E), Mumbai-400 051.
Represented by : Advocate Mrs. Rinky Agarwal.
Accused : Ghanshyam J. Gupta
Arnav Travels
Age : 41 years, Occ. Business,
R/o. Room No.07, Md Latif Chawl,
Golibar Road, Ambewadi Chowki,
Bandra (E), Mumbai-400 051.
Represented by : Advocate Mr. Vishwanath Nair.
Part ‘B’
(Para 44(ii) of Chapter VI of Criminal Manual)
Date of Offence : 06-03-2020
Date of filing complaint : 10-08-2020
Date of Registration of Complaint : 29-12-2021
Date of Recording Plea : 01-03-2023
Date of Commencement of evidence : 15-01-2025
Date on which Judgment is Reserved : 02-05-2026
Date of the Judgment : 02-05-2026
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Judgment Exh.40
Date of sentencing order, if any : 02-05-2026
Accused Details
Ran
k of
the
Acc
use
d
Name of
Accused
Date
of
Arre
st
Date of
Release
d on
bail
Offence
charged
with
Final order Sentence Period
of
detent
ion
under
gone
Mr.
Ghanshyam
J. Gupta
- 01.03.
2023
U/s. 138
of the N.I.
Act, 1881
Acquitted. - -
Part C
(Para 44(iii) of Chapter VI of Criminal Manual)
List of Prosecution/Defence/Court Witnesses
A) Prosecution/Complainant’s Witnesses -
CW NAME Nature of Evidence Exhibits
01 Stephen Sebastian Oral 14
B) Defence Witnesses -
DW NAME Nature of Evidence Exhibits
01 Ghanashyam Jagannath
Gupta
Oral 36-A
C) Court Witnesses, if any -
CW NAME Nature of Evidence Exhibits
01 - - -
List of Prosecution/Defence/Court Exhibits
A) Prosecution/Complainant -
Sr. No. Exhibit Number Description
1. Exhibit –16/CW01 Original Agreement for Sale
2. Exhibit – 17/CW01 Cheque No.000069
3. Exhibit – 18/CW01 Cheque Return Memo dated
26.02.2020
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4. Exhibit – 19/CW01 Copy of FIR
5. Exhibit – 20/CW01 Demand Notice dated 29.02.2020
6. Exhibit – 21/CW01 Postal Receipt
7. Exhibit – 22/CW01 Acknowledgment Card
8. Exhibit – 23/CW01 Notice reply to the Demand Notice
dated 16.03.2020
B) Defence -
Sr. No. Exhibit Number Description
1. Exhibit - /DW01 -
C) Court Exhibits -
Sr. No. Exhibit Number Description
1. Exhibit - /CW01 -
D) Material Object -
Sr. No. Material Object Number Description
1. - -
JUDGMENT
(Delivered on this 2nd May, 2026)
Accused is tried for an offence punishable under section
138 of the Negotiable Instrument Act, 1881, for dishonor of cheque
allegedly to be issued against balance consideration amount of vehicle
purchased from complainant.
2. The case of complainant in nut shell is as follows:
That the accused purchased Toyota Car of complainant for
an amount of Rs.4,45,000/-. He paid part amount of Rs.3 lakhs as
advance and issued cheque of Rs.1,45,000/-. Said cheque returned
unpaid for the reason ‘Funds Insufficient’ on 26.02.2020. Thereon,
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Judgment Exh.40
complainant called upon the accused to make payment of the
dishonored cheque issuing demand notice dated 29.02.2020. Accused
replied the demand notice and neglected to make payment within
statutory period. Hence, this complaint.
3. My Ld. Predecessor taken cognizance of the complaint and
issued process against accused persons under section 138 of Negotiable
Instruments Act. On appearance of the accused, particulars of offence
were stated to him in vernacular to which the accused pleaded not
guilty vide Plea Exh.13 and claimed to be tried. The case was tried as
summons trial.
4. The statement of accused under section 313 of Code of
Criminal Procedure was recorded at Exh.36 dated 13.08.2025. Accused
has taken defence of no legal liability as to the cheque amount, misuse
of blank signed cheque.
5. Heard advocate Mrs. Rinky Agarwal for the complainant
and advocate Mr. Vishwanath Nair for the accused.
6. On hearing both sides, following points arise for my
determination to which I have recorded my findings with reasons
thereto as follows-
Sr.No. POINTS FINDINGS
1. Whether the accused has issued disputed
cheque bearing No.000069 dated 18.02.2020
for Rs.1,45,000/- drawn on account of accused
maintained with Bank of Baroda, Khar(W)
branch, Mumbai in favour of the complainant
in discharge of legally enforceable liability or
other debt?
: No.
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2. Whether it is proved that cheque was
dishonored for the reason ‘Funds Insufficient’ ? : Yes.
3. Whether it is proved that the demand notice
dated 29.02.2020, issued u/sec.138(b) of the
Negotiable Instruments Act, to the accused is
legal and valid?
: No.
4. Whether it is proved that despite service of
demand notice, the accused failed to pay the
cheque amount within statutory period of 15
days after receiving notice and thereby
committed an offence punishable under section
138 of the Negotiable Instruments Act?
: No.
5. What order? : Accused is
acquitted.
REASONS
7. To substantiate averments made in the complaint,
complainant has examined himself as CW-01 at Exh.14 and relied upon
disputed cheque, cheque returned memo, demand notice etc. Accused
has examined himself as DW-01 at Exh.36-A. Sale of vehicle, price of
consideration not in dispute. Only question for consideration is whether
legally enforceable liability to pay cheque amount was in existence on
the date of cheque?
AS TO POINT NO.1:-
8. On hearing both sides, according to complainant remaining
amount of Rs.1,45,000/- was to be paid within 90 days from the date
of Agreement for Sale that is 1st August, 2019. Accused has not paid
said amount within 90 days as such the legal liability exist against
accused on the date of cheque that is on 18.02.2020. As against it
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accused has came with a case of making payment of Rs.55,000/- to the
complainant. According to accused the amount of liability of the
accused was lesser than the amount mentioned in the cheque on the
date of cheque.
9. Oral evidence of complainant shows that he is running
Tours and Travel business. He sold the car to the accused for an amount
of Rs.4,45,000/-. Out of said amount accused had paid Rs.3 lakhs and
an amount of Rs.1,45,000/- was outstanding towards accused. Said
amount was to be paid within 90 days from the date of Agreement by
the accused. It further discloses that he had received Rs.50,000/- from
the accused prior to date of presenting the cheque for realization.
10. Oral evidence of accused states that he had given the
cheque of Rs.1,45,000/- in advance to the complainant on the date of
Agreement. He could not manage entire payment of Rs.1,45,000/-
within period of three months. However, he gave Rs.50,000/- in cash to
the complainant at Upadhyay Hospital. He paid fine of Rs.5,800/-
pending against said vehicle. Thereafter, he gave Rs.30,000/- to the
wife of complainant and transferred Rs.10,000/- to the account of
daughter of complainant. It further states that only Rs.50,000/- is
outstanding against him.
11. While marshaling evidence in the nature of oath against
oath, the oral evidence of accused appears more trustworthy to accept
his defence as trustworthy. Man may speak lie but the documents never.
Further, complainant has admitted receiving Rs.50,000/- in cash from
accused before the date of presenting cheque for realization that is
26.02.2020. There is no endorsement under section 56 of the Act,
made on the cheque as to restricting liability against cheque only for
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Rs.95,000/-. Complainant has presented the cheque Exh.17 for
realization of entire amount of Rs.1,45,000/- which is more than the
existing legal liability on the date of cheque.
12. Advocate for accused in support of his submission as to not
attributing criminal liability under section 138 of the Negotiable
Instrument Act, has relied upon Judgment of Hon’ble Supreme Court in
the case
Dashrathbhai Trikambhai Patel Vs. Hitesh Mahindrabhai Patel
and another in Criminal Appeal No.1497 of 2022 delivered on 11th
October, 2022.
13. I have gone through the ratio laid down in the Judgment.
Supreme Court has held that,
“Whenever a part payment of the debt is
made after the cheque was drawn but before the cheque is encashed,
such payment must be endorsed on the cheque under section 56 of the
Act. The cheque can not be presented for encashment without
recording the part payment. If the unendorsed cheque is dishonored on
presentation, the offence under section 138 would not be attracted
since the cheque does not represent a legally enforceable debt at the
time of encashment.”
14. In the case in hand admittedly, complainant has not
presented the cheque recording the part payment received from
accused and making specific endorsement required under section 56 of
the Act on the instrument. In legal parlance, the enforceable debt or
liability against accused was of lesser amount than the amount
mentioned in cheque Exh.17. There was no legally enforceable liability
to pay entire cheque amount of Rs.1,45,000/- to the complainant by
the accused on the date of presenting cheque for realization. Therefore,
the cheque did not represent the legally enforceable debt at the time of
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encashment, to attract criminal liability under section 138 of the Act.
The ratio laid down in the case cited supra squarely applies to the facts
in the case in hand.
15. For the reasons recorded above, it is crystal clear that the
cheque was issued for payment of remaining amount but accused had
made part payment before the date of encashment of cheque.
Therefore, there was no legal liability in existence on the date of
cheque. Hence, I answer point No.1 in the negative.
AS TO POINT NO.2 :
16. Accused has not disputed the reason of dishonor of cheque.
Complainant has produced the cheque return memo at Exh.18. In view
of presumption under section 146 of the Negotiable Instrument Act, I
answer the point No.2 in the affirmative.
AS TO POINT NO.3 :
17. Accused has replied demand notice Exh.20. In notice reply
he has categorically stated about payment made by him to the
complainant and remaining balance amount. Contents of notice reply
given by the accused are duly proved in his evidence making his
defence probable and trustworthy. In fact, there is no dispute on the
count of receiving demand notice by the accused. Section 138(b) of the
Negotiable Instrument Act, mandates the demand of amount of legal
debt. The word ‘Demand for the payment of said amount of money’ in
section 138(b) refers to the demand of legal debt in discharge of which
the cheque came to be issued. It presupposes legal necessity of making
indorsement for part of some due as expected under section 56 of the
Act. Therefore, the demand notice with claim of higher amount than
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the liability can not be said to be legal and valid notice. Hence, I
answer point No.3 in the negative.
AS TO POINT NOS.4 AND 5 :
18. Drawer of a cheque is deemed to have committed the
offence of cheque dishonor, if the following ingredients are fulfilled:
(i) A cheque is drawn for the payment of any amount of money
to another person;
(ii) The cheque is drawn for the discharge of the ‘whole or part’
of any debt or other liability, ‘Debt or other liability’ means
legally enforceable debt or other liability; and
(iii) The cheque is returned by the bank unpaid because of
insufficient funds or any other reason.
However, unless the stipulations in the proviso are fulfilled the offence
is not deemed to be committed. The conditions in the proviso are as
follows:
(i) The cheque must be presented in the bank within six months
from the date on which it was drawn or within the period of
its validity;
(ii) The holder of the cheque must make a demand for the
payment of the ‘said amount of money’ by giving a notice in
writing to the drawer of the cheque within thirty days from
the receipt of the notice from the bank that the cheque was
returned dishonored, and
(iii) The drawer of the cheque fails to make the payment of the
‘said amount of money’ within fifteen days from the receipt of
the notice.
19. Complainant has failed to prove existence of legal liability
as of the cheque amount on the date of cheque against accused. The
demand notice is not legal and valid within the meaning of section
138(b) of the Negotiable Instrument Act. Even if the cheque is
dishonored on presentation, the same being presented without
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endorsing the amount received from the accused, the offence under
section 138 would not attract. The cheque does not represent legally
enforceable debt on the date of presentation. The cheque presented for
higher amount than the legal liability without endorsement would not
attribute criminal liability under section 138 of the Act, against the
accused. Hence, I answer point No.4 in the negative.
20. In view of above findings and evidence on record accused
is entitled to an acquittal of the offence charged against him. Hence, I
pass following order.
ORDER
1. 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. 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 : 02.05.2026. 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 : 02.05.2026.
Transcribed and Typed on : 02.05.2026.
Judgment printed and Signed on : 02.05.2026.
Judgment Uploaded on : 02.05.2026.
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