Final Order 1

Order Details: Copy  of Judgment
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C. C. No. 267/SS/2018
CNR No. : MHMM19-000441-2018
Received On : 12/01/2018
Registered On : 12/01/2018
Decided On : 24/02/2026
Duration :Y-08, M-01, D-12
IN THE COURT OF METROPOLITAN MAGISTRATE, ANDHERI (Court
No. 48), MUMBAI.
( Presided over by Y. P. Pujari )
C. C. No 267/SS/2018
Exh. 60
M/s. Cellpage Ventures Pvt. Ltd.
Through its Authorized representative,
Mr. Narendra Rawat.
Office at – 604, Vishwa Nanak,
ICT Link Road, Chakala,
Andheri East, Mumbai – 400099. -- Complainant
Versus
Mr. Panchalal Devji Patel.
Proprietor of M/s. Unique Enterprises
Residing at Room No. 5,
Amina Bai Chawl, Kaju Tekdi-Parshiwadi,
Ghatkopar West, Mumbai – 400086
office at -
54/56, Ramwadi, Ground Floor,
Near Maruti Courier,
Kalbadevi Road, Mumbai – 400 002. -- Accused
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CNR No. : MHMM19-000441-2018
OFFENCE PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE
INSTRUMENTS ACT
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Appearance:- Adv. Mr. Pawan Chauhan/Priya Mishra for the
complainant.
Adv. Mr. N. K. Jagtap/Neeta Shah for the accused.
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JUDGMENT
(Delivered on 24th of February 2026)
The accused is facing trial for an offence punishable under
Section 138 of the Negotiable Instruments Act (Hereinafter referred as
“the Act” for short) for dishonor of a cheque for Rs. 36,44,383/-.
The brief facts of complainant's case are as under:
02. It is averred by the complainant that, present complaint is
filed through authorized representative of M/s. Cellpage Ventures Pvt.
Ltd. The complainant company is engaged in the business of supplying
various kinds and size of notebook to their clients all over India.
Accused is a proprietorship firm operated in the name and style of M/s.
Unique Enterprises. The accused had purchased various kinds of
notebook from the complainant on credit basis.
03. It is his further submission that, in discharge of outstanding
legal liability, the accused has issued a cheque bearing No. 383501
dated 06/10/2017 for an amount of Rs. 36,44,383/- drawn on Indian
Overseas Bank, Kalbadevi Road, Mumbai branch in favour of
complainant. Thereafter, the complainant deposited the above said
cheque for encashment in his bank namely Yes Bank, Andheri (East)
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branch, Mumbai. The same was returned unpaid from drawee bank
with endorsement 'Funds Insufficient'. Accordingly, the Yes Bank issued
memo dated 15/11/2017. Thereafter, he contacted the accused and
requested to pay cheque amount but the accused intentionally not paid
said amount. Thereafter, he issued demand notice dated 06/12/2017 to
accused. The notice was duly served on the accused but accused failed
to pay cheque amount within stipulated period. Hence, the complainant
constrained to file present complaint.
04. After recording statement of the complainant and perusing
all documents produced on record, process came to be issued against
the accused for the above offence. In response to summons, the
accused appeared. Particulars of offence recorded below Exh. 13 which
were read over and explained to the accused in vernacular, to which he
pleaded not guilty and claimed to be tried.
05. Accused has conducted the cross-examination of the
complainant in which he has raised following defences:-
a) The present complainant has no authority to file the
complaint and to depose in the case.
b) The complainant did not prove the transaction.
c) The complainant did not supply nor delivered the
goods to him.
d) He is not liable to pay the cheque amount.
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06. The complainant closed his evidence and matter was
posted for statement of accused U/s. 313 of Code of Criminal
Procedure. (Hereinafter referred as 'the Code' for short). The accused
was aware about the stage of matter. But in-spite of that, he could not
secure his presence for recording his statement. Admittedly, the scope of
Section 313 of the Code, is very wide. It is not a mere empty formality.
The object of recording of Section 313 of the Code, is to put all
incriminating evidence to the accused so as to provide him an
opportunity to explain such incriminating circumstances appearing
against his in the evidence of prosecution/complainant. However, in-
spite of giving ample opportunity, the accused himself has not availed
his right to explain the incriminating circumstances by remaining
present. As per direction of Hon'ble Apex Court given in case of
Indian
Bank Association and others V/s. Union of India and others (Writ
Petition (Civil) No. 18/2013 Decided on 21/04/2014), the matter is
required to be kept for defence evidence after plea of accused and the
Court must ensure that examination-in-chief, cross-examination and re-
examination of the complainant must be conducted within three months
of assigning the case. In such circumstance, if we keep this matter
pending without progress and more particularly, when such
circumstances arose due to intentional act of accused, it will be against
the right of speedy trial of complainant. Ultimately it will defeat the
object of aforesaid directions of Hon'ble Apex Court regarding speedy
disposal of matter, which is filed for an offence punishable under
Section 138 of the Act. Further as per the decision of the Hon'ble
Bombay High Court in the case of Prakash Chimanlal Sheth V/s. T.
Ramalingam Nadar @ Ramalingam [decided in Criminal Application
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No.490 of 2020 dated 14/09/2022] wherein in Para-35 the Hon'ble
High Court has observed as under :
35. Considering the fact that the proceedings under Section 138
of N.I. Act are required to be concluded expeditiously in the
light of guidelines issued by the Courts from time to time for
speedy disposal of the cases, the scope of Sections 141, 142, 143
and 145 of the N.I. Act, it was not necessary for the trial Court
to wait for Accused to make his appearance. The facts of the
present case denote that the Accused was exempted from
appearing and thereafter they continued to disappear from
appearing before the Court. Warrants were issued. The warrants
could not be executed. The Accused even failed to appear before
this Court. In this circumstance, the Court is empowered to
proceed with the case without recording the statement of the
Accused under Section 313 of Cr. P.C. The decision relied upon
by learned APP
Reena Hazarika V/s. State of Assam (supra)
relates to scope of Section 313 of the Code. It is observed that
the Section 313 of the Code confers valuable right upon accused
to establish his innocence. The mere use of word 'may' cannot be
held to confer a discretionary power on the Court to consider or
not to consider such defence, since it constitutes a valuable right
of an accused for access to justice. However, in the present case,
accused have not bothered to remain present before the Court.
The complainant is victim. He is running from pillar to post for
prosecuting the accused. This is a fit case to exercise discretion
and proceed with case by dispensing with statement under
Section 313 of the Code. The accused has no regard for
directions of Court. The trial Court had already passed order of
no cross. Hence, the impugned order of trial Court is required to
be set aside with direction to dispense with statement of accused
under Section 313 of the Code and proceed with the case.
Further, I have perused the decision of Hon’ble Bombay High Court in
the case of Navneet Singh Gogia and 2. Simran Kaur Gogia V/s. 1. The
State of Maharashtra and 2. Sushma B. Chandak, CRIMINAL REVISION
APPLICATION NO.70 OF 2023 WITH INTERIM APPLICATION NO. 1696
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OF 2023, decided on 21/01/2025. It has held that,
“47. After considering the above observation in all the judgments, I
am inclined to take a view, in a case before this Court when it is
found out that the accused is not attending the trial, nor sought for
dispensing the personal attendance and not represented by the
advocate, the trial Magistrate is justified in proceeding in absence of
the accused and without recording 313 statement also. However,
when such power can be exercised is a question of fact. Trial Court
can consider :- a) for how many occasions accused has remained
absent b) steps taken by the complainant to secure presence of the
accused. c) reason why presence could not be secured. d) whether
all modes permissible as per law were exhausted. After ascertaining
all factors, then only such power can be exercised. Above are few of
the factors.”
In the matter in hand, the Non-bailable warrants were
issued against the accused and also issued proclamation against the
accused. The police has filed the report of proclamation. Complainant
has taken every efforts to secure the presence of accused and thereafter
the statement of accused U/s. 313 of Code of Criminal Procedure came
to be dispensed with.
07. Heard Ld. Advocate for complainant. Ample opportunities
were given to the accused, but none appeared to argue on behalf of
accused.
08. From perusal of complaint and record, following points
arise for my determination. I have recorded my finding and reasons
thereon as under:
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Sr. No. Points Findings.
1. Does the complainant prove that cheque No.
383501 (Exh.22) was drawn by accused for
legally recoverable debt or other liability?
Yes.
2.
Does the complainant prove that the said
cheque returned unpaid for the reason “Funds
Insufficient”?
Yes.
3.
Does the complainant prove that he had issued
demand notice to the accused within
limitation demanding cheque amount?
Yes.
4.
Does complainant prove that the accused
failed to pay cheque amount to complainant
within statutory limit?
Yes.
5.
Whether the accused has committed an
offence punishable under Section 138 of the
Negotiable Instruments Act ?
Yes.
6. What order? The accused
is convicted.
9. In order to prove the case, the authorized representative of
complainant has filed his evidence affidavit as (C.W.1) at Exh. 20. The
complainant has examined one bank witness namely Prince Prakash
D’souza as a (C.W. 2) at Exh. 40. He has also placed his reliance upon
following documents:
Description of documents Exh. No.
Certified copy of minutes of meeting Exh. 21
Disputed cheque Exh. 22
Cheque returned memo Exh. 50
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Demand notice Exh. 23
Postal receipts Exh. 24 and 25
Returned envelopes Exh. 26 and 27
Excise invoices Exh. 28 collectively
Debit note Exh. 29 and 30
Ledger account Exh. 31
REASONS
As to Point No.1:-
10. In order to prove the allegation leveled against the
accused, the authorized representative of complainant has filed his
evidence affidavit (C.W.1) at Exh. 20. As per his evidence, present
complaint is filed through authorized representative of M/s. Cellpage
Ventures Pvt. Ltd. The complainant company is engaged in the business
of supplying various kinds and size of notebook to their clients in all
over India. Accused is a proprietorship firm operated in the name and
style of M/s. Unique Enterprises. The accused had purchased various
kinds of notebook from him on credit basis.
11. It has further come in the evidence of this witness that, in
discharge of outstanding legal liability, the accused has issued a cheque
bearing No. 383501 dated 06/10/2017 for an amount of Rs.
36,44,383/- drawn on Indian Overseas Bank, Kalbadevi Road, Mumbai
branch in favour of complainant. Thereafter, he deposited the above
said cheque for encashment in his bank namely Yes Bank, Andheri
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(East) branch, Mumbai. The same was returned unpaid from drawee
bank with endorsement 'Funds Insufficient'.
12. The accused has conducted the cross-examination of the
witnesses. In his cross-examination, the accused has raised defences
that,
a) The present complainant has no authority to file the
complaint and to depose in the case.
b) The complainant did not prove the transaction.
c) The complainant did not supply nor delivered the
goods to him.
d) He is not liable to pay the cheque amount.
13. Before adverting towards the merit of case, it is necessary
to deal with some legal principles regarding presumptions contemplated
in Section 118 and 139 of the Act and standards of proof for its
establishment or also for rebuttal. The Hon'ble Supreme Court of India
in
T. Vasantha Kumar v/s. Vijaya Kumari (2015) 8 SCC 378 has held
that, “the presumption mandated by Section 139 includes a
presumption that there exists a legally enforceable debt or liability. 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 respondent
complainant”.
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14. The Hon’ble Supreme Court of India in the case Rangappa
v/s Mohan reported in AIR 2010 SC 1898, has held that, “the
presumption mandated by Section 139 of the Act does indeed include
the existence of legally enforceable debt or liability.
” In the present
case, the accused has not sent reply to the demand notice of the
complainant. The accused has conducted the cross-examination of the
complainant. It seems that, the accused has not denied the issuance of
cheque nor denied his signature on the cheque. Accused has admitted
the signature on the cheque as it is not denied by the accused.
Therefore, it can be gathered that, accused has not challenged the
signature from cheque (Exh. 22). This shows that, the signature of
accused from cheque (Exh. 22) is not in dispute. Therefore, the
presumptions under Section 118 and 139 of the Act are raised in favor
of complainant.
15. The Hon'ble Supreme Court of India in case of
M.S.
Narayan Menon @ Mani V/s. State of Kerala and another (Appeal (Cri.)
1012 of 1999 decided on 04/07/2006) has laid down the rules
regarding the standards of proof for establishment of case as well as of
rebuttal of defence in the case filed under Section 138 of the Act. The
Hon'ble Supreme Court of India has observed that
“It is not necessary for the defendant to
disprove the existence of consideration by way of direct
evidence. The standard of proof evidently is pre-
ponderance of probabilities. Inference of pre-ponderance of
probabilities can be drawn not only from the materials on
records but also by reference to the circumstances upon
which he relies. Presumption drawn under a statute has
only an evidentiary value. Presumptions are raised in terms
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of the Evidence Act. Presumption drawn in respect of one
fact may be an evidence even for the purpose of drawing
presumption under another.”
16. The Hon'ble Supreme Court of India in case of Sumeti VIJ
V/s. M/s. Paramount Tech Fab, Criminal Appeal No(s) 292 of 2021,
(Arising out of SLP (Crl.) No (s). 8498 of 2019), in which the decision
of Rohitbhai Jivanlal Patel V/s. State of Gujarat and Another, 4 (2019)
18 SCC 106 is discussed and wherein it has laid down the procedure as
to how the accused can rebut the presumption under Section118 and
139 of the Act,
“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. The accused may adduce
direct evidence to prove that the note in question was not
supported by consideration and that there was no debt or
liability to be discharged by him. However, the court need
not insist in every case that the accused should disprove the
non-existence of consideration and debt by leading direct
evidence because the existence of negative evidence is
neither possible nor contemplated. At the same time, it is
clear that bare denial of the passing of the consideration
and existence of debt, apparently would not serve the
purpose of the accused. Something which is probable has to
be brought on record for getting the burden of proof shifted
to the complainant. To disprove the presumptions, the
accused should bring on record such facts and
circumstances, upon consideration of which, the court may
either believe that the consideration and debt did not exist
or their non-existence was so probable that a prudent man
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would under the circumstances of the case, act upon the
plea that they did not exist. Apart from adducing direct
evidence to prove that the note in question was not
supported by consideration or that he had not incurred any
debt or liability, the accused may also rely upon
circumstantial evidence and if the circumstances so relied
upon are compelling, the burden may likewise shift again
on to the complainant. The accused may also rely upon
presumptions of fact, for instance, those mentioned in
Section 114 of the Evidence Act to rebut the presumptions
arising under Sections 118 and 139 of the Act. The accused
has also an option to prove the non-existence of
consideration and debt or liability either by letting in
evidence or in some clear and exceptional cases, from the
case set out by the complainant, that is, the averments in
the complaint, the case set out in the statutory notice and
evidence adduced by the complainant during the trial. Once
such rebuttal evidence is adduced and accepted by the
court, having regard to all the circumstances of the case
and the preponderance of probabilities, the evidential
burden shifts back to the complainant and, thereafter, the
presumptions under Sections 118 and 139 of the Act will
not again come to the complainant's rescue”.
17. The Hon'ble Bombay High Court in the case of
Vishnu Vs.
State of Maharashtra (Cri. Rev. Application No. 176/2015 decided on
24/01/2019) observed that,
“There cannot be any manner of dispute with
the proposition that once the presumption arising under
Section 118 read with Section 139 of the Act is raised, it can
be rebutted by the accused on preponderance of probability
at the trial. This can be done on the basis of cross-
examination of the complainant and his witnesses, if any,
and/or by leading independent defence evidence.”
18
. As accused has not challenged his signature on the cheque
(Exh. 22), the presumptions under Section 118 and 139 of the Act are
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raised in favor of complainant. Therefore, in view of the observations
given in case of Rangappa V/s. Sri Mohan (Cited Supra), the accused
has to raise a probable defence which creates doubts about the
existence of a legally enforceable debt or liability and the prosecution
can fail. It also makes clear that, mere denial is not sufficient to rebut
the presumption which is raised in favor of complainant. As observed in
the case of
Vishnu Vs. State of Maharashtra (cited supra), accused has
many modes to bring on record his defence e.g. by replying upon
notice, complaint, complainant's evidence and also by mode of cross
examination, her own testimony or of other witnesses, if cross examined
and also through statement of accused recorded under section 313 of
the Code. In the present case, the accused has conducted the cross-
examination of complainant wherein he raised a defence that:-
a) The present complainant has no authority to file the
complaint and to depose in the case.
b) The complainant did not prove the transaction.
c) The complainant did not supply nor delivered the
goods to him.
d) He is not liable to pay the cheque amount.
19. So far as the first defence of the accused is concerned, as
per the cross-examination of the complainant, the accused has taken a
defence that, the present complainant has no authority to represent the
complaint and to lead the evidence on behalf of complainant. On the
contrary, Ld. Advocate for the complainant submitted that, the authority
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letter is issued in favour of complainant. I have perused the decision of
Hon’ble Supreme Court of India in the case of A.C. Narayanan V/s.
State of Maharashtra and another, AIR 2014 S.C. 630. In this decision it
has been held that:-
“26) While holding that there is no serious conflict between the decisions in
MMTC (supra) and Janki Vashdeo Bhojwani (supra), we clarify the position and
answer the questions in the following manner:
(i) Filing of complaint petition under Section 138 of N.I Act through power of
attorney is perfectly legal and competent.
(ii) The Power of Attorney holder can depose and verify on oath before the Court
in order to prove the contents of the complaint. However, the power of attorney
holder must have witnessed the transaction as an agent of the payee/holder in
due course or possess due knowledge regarding the said transactions.
(iii) It is required by the complainant to make specific assertion as to the
knowledge of the power of attorney holder in the said transaction explicitly in
the complaint and the power of attorney holder who has no knowledge regarding
the transactions cannot be examined as a witness in the case.
(iv) In the light of section 145 of N.I Act, it is open to the Magistrate to rely upon
the verification in the form of affidavit filed by the complainant in support of the
complaint under section 138 of the N.I Act and the Magistrate is neither
mandatorily obliged to call upon the complainant to remain present before the
Court, nor to examine the complainant of his witness upon oath for taking the
decision whether or not to issue process on the complaint under Section 138 of
the N.I. Act.
(v) The functions under the general power of attorney cannot be delegated to
another person without specific clause permitting the same in the power of
attorney. Nevertheless, the general power of attorney itself can be cancelled and
be given to another person.
In the case in hand, the complainant has filed certified copies of
minutes of meeting at Exh. 21. Perusal of the minutes of meeting filed
at Exh. 21 it seems that, the authority has given to the present
complainant to file the present complaint and to depose. Therefore, it
cannot seem that, the present complainant has no authority to file the
complaint and depose in the present complaint.
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20. So far as the second defence of the accused is concerned, as
per the cross-examination of the complainant, the accused has taken a
defence that, the complainant did not file any document to show that,
the accused had placed purchase order to him. I have perused the
cross-examination of the complainant wherein the complainant has
admitted that, accused had not placed purchased order in writing.
Complainant has voluntarily deposed that, he used to purchase orders
from telephone call. The suggestion was put to the complainant that
accused did not place any order through telephonic call but the
complainant has denied the suggestion. In the case in hand, the
complainant has filed invoices at Exh. 28, debit note at Exh. 29 and 30
and ledger account at Exh. 31 to show the outstanding amount. Except
denial the accused has not produced any probable defence to dispute
these documents.
21. The accused came with another defence that, the goods
were not delivered to him. In the case in hand, the complainant had
issued demand notice to the accused but it seems from the record that
the accused did not reply to the demand notice. I have perused the
decision of Hon’ble Supreme Court of India in the case of Sanjabij Tari
V/s. Kishore S. Borcar & Anr., Criminal Appeal No. 1755 of 2010,
decided on 25/09/2025. It has held that,
“29. Furthermore, the fact that the accused has failed to reply to the
statutory notice under Section 138 of the NI Act leads to an inference
that there is merit in the Appellant-Complainant’s version. This Court in
Tedhi Singh vs. Narayan Dass Mahant, (2022) 6 SCC 735 has held that
the accused has the initial burden to set up the defence in his reply to the
demand notice that the complainant did not have the financial capacity
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to advance the loan. The relevant portion of the” said judgment is
reproduced hereinbelow:-
“10. … The proceedings under Section 138 of the NI Act is not a civil
suit. At the time, when the complainant gives his evidence, unless a
case is set up in the reply notice to the statutory notice sent, that the
complainant did not have the wherewithal, it cannot be expected of
the complainant to initially lead evidence to show that he had the
financial capacity. To that extent, the courts in our view were right in
holding on those lines. However, the accused has the right to
demonstrate that the complainant in a particular case did not have
the capacity and therefore, the case of the accused is acceptable
which he can do by producing independent materials, namely, by
examining his witnesses and producing documents. It is also open to
him to establish the very same aspect by pointing to the materials
produced by the complainant himself. He can further, more
importantly, achieve this result through the cross-examination of the
witnesses of the complainant. Ultimately, it becomes the duty of the
courts to consider carefully and appreciate the totality of the evidence
and then come to a conclusion whether in the given case, the accused
has shown that the case of the complainant is in peril for the reason
that the accused has established a probable defence. (emphasis
supplied)
30. This Court in MMTC Ltd. and Another vs. Medchl Chemicals &
Pharma (P) Ltd. and Another, (2002) 1 SCC 234 has specifically held
that when a statutory notice is not replied, it has to be presumed that
the cheque was issued towards the discharge of liability.”
Admittedly in the case in hand, accused did not reply to the demand
notice. The accused did not avail the opportunity to put his defence at
its initial stage. Further, I have perused the decision of Hon’ble
Supreme Court of India in P. Rasiya V/s. Abdul Nazer and Anr. Criminal
appeal Nos. 1233-1235 of 2022 (Arising out of SLP (Cri) no. 7430-7432
of 2022). It has been observed in para no. 7 that,
“ 7. Feeling aggrieved and dissatisfied with the judgment and orders
passed by the Appellate Court affirming the conviction of the accused
under Section 138 of the N.I. Act, the accused preferred three
different Revision Applications before the High Court. By the impugned
common judgment and order, the High Court has reversed the
concurrent findings recorded by both the courts below and has
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acquitted the accused on the ground that, in the complaint, the
Complainant has not specifically stated the nature of transactions and
the source of fund. However, the High Court has failed to note the
presumption under Section 139 of the N.I. Act. As per Section 139 of
the N.I. Act, it shall be presumed, unless the contrary is proved, that the
holder of a cheque received the cheque of the nature referred to in
Section 138 for discharge, in whole or in part, of any debt or other
liability. Therefore, once the initial burden is discharged by the
Complainant that the cheque was issued by the accused and the
signature and the issuance of the cheque is not disputed by the accused,
in that case, the onus will shift upon the accused to prove the contrary
that the cheque was not for any debt or other liability. The presumption
under Section 139 of the N.I. Act is a statutory presumption and
thereafter, once it is presumed that the cheque is issued in whole or in
part of any debt or other liability which is in favour of the
Complainant/holder of the cheque, in that case, it is for the accused to
prove the contrary. The aforesaid has not been dealt with and
considered by the High Court. The High Court has also failed to
appreciate that the High Court was exercising the revisional jurisdiction
and there were concurrent findings of fact recorded by the courts
below.”
In the case in hand, the complainant has filed the invoices at
Exh. 28, debit note at Exh. 29 and 30 and ledger account at Exh. 31.
These documents itself shows that, the goods were delivered to the
accused.
22. I have perused the decision of Hon’ble Supreme Court of
India in Rangappa’s Case (Cited supra) and perusal of it makes clear
that, once the accused has admitted his signature on the cheque and
issuance of cheque then presumption U/s. 118 and 139 of N. I. Act
arises in favour of complainant. I have also perused the decision of
Hon’ble Supreme Court of India in the case of Sanjabij Tari’s case (Cited
Supra). It has held that,
“This Court also takes judicial notice of the fact that some District
Courts and some High Courts are not giving effect to the
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presumptions incorporated in Sections 118 and 139 of NI Act and
are treating the proceedings under the NI Act as another civil
recovery proceedings and are directing the complainant to prove the
antecedent debt or liability. This Court is of the view that such an
approach is not only prolonging the trial but is also contrary to the
mandate of Parliament, namely, that the drawer and the bank must
honour the cheque, otherwise, trust in cheques would be irreparably
damaged.”
In the case in hand also, the complainant has filed the
invoices at Exh. 28, debit note at Exh. 29 and 30 and ledger account at
Exh. 31. This shows that, the complainant has proved the transaction.
23. As I discussed above the accused has not brought on record any
material by way of cross-examination or in the statement of 313 of the
Code. Therefore, it becomes clear that the accused has utterly failed to
rebut the presumption raised under Section 118 & 139 of the Act.
Therefore, I hold that the complainant has duly proved that accused has
issued the subject cheque from his account in favour of the complainant
towards the legally enforceable debt. Hence, point No. 1 is answered in
the “affirmative”.
As to Point No. 2:-
24. As per contentions and evidence of complainant, the
cheque no. 383501 (Exh. 22) was presented for encashment in Yes Bank
Ltd., Andheri (E) branch. However, the cheque was returned with
remark as ‘Funds Insufficient’. In support of said contentions, the
complainant has examined one bank witness namely Mr. Prince Prakash
D’Souza (C.W. 2) at Exh. 40. As per his evidence, he has produced
Bank account statement of complainant at Exh. 44 and as per said
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bank account statement, the cheque was dishonoured for the reason
“Funds Insufficient”. He also produced on record account statement of
complainant for the period of 01/11/2017 to 30/11/2017 at Exh. 49.
As per said account statement, the disputed cheque was returned
unpaid on 15/11/2017 . As per his evidence, memo is issued by his
bank as per Exh. 50.
25. Nothing is brought on record by the accused to rebut the
presumption in respect of bank account statement (Exh. 49) and cheque
return memo (Exh. 50). After perusal of said statement and memo, it is
seen that the cheque No. 383501 (Exh. 22) was dishonored for reason
'Funds Insufficient'. However, nothing has brought by the accused on
record to show his bonafide as well as also to show that at the relevant
time, the amount mentioned in the cheque was pending in his account.
Hence, no hurdle to held that the cheque was dishonored with reason
'Funds Insufficient'. Consequently, point No. 2 is answered in the
“affirmative”.
As to Point Nos. 3 and 4 :-
26. As per evidence of complainant (C.W.1), after dishonor of
cheque (Exh. 22), he issued demand notice dated 06/12/2017
(Exh.23). The complainant has filed postal receipts at Exh. 24 and 25
to show that, the notice was issued on the correct address of the
accused. In support of said contention, the complainant produced
demand notice dated 06/12/2017 (Exh. 23) and postal receipts (Exh.
24 and 25). Upon perusal of demand notice (Exh. 23), postal receipts
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(Exh. 24 and 25), it is seen that, the complainant issued demand notice
on 06/12/2017 to the accused and same was sent to the accused. The
demand notice was sent on the following address :-
To,
1. M/s. Unique Enterprises
54/56, Ramwadi, Ground Floor,
Near Maruti Courier,
Kalbadevi Road, Mumbai – 400 002.
2. Mr. Panchalal Devji Patel.
Proprietor of Soham Distributors.
Residing at Room No. 5,
Amina Bai Chawl, Kaju Tekdi-Parshiwadi,
Ghatkopar West, Mumbai – 400086
27. In the cross-examination, the accused has put suggestion
that the notice was not sent on the correct address but the accused has
not put any suggestion that what was the correct address of the
accused. Therefore, mere denial or suggestion is not sufficient to prove
that the notice was sent on incorrect address. As per Section 27 of
General Clauses Act, there is presumption that once notice is sent by
Register post on the correct address, then it is presumed to be delivered.
Therefore, there is no hurdle to held that complainant sent demand
notice on the correct address of accused. Here, it is necessary to
mention the observations given by Hon'ble Supreme Court of India in
case of C. C. Alavi Haji V/s. Palapetty Muhammeed and anr reported in
All MR (Cri.) 2007. Wherein it is observed by Hon'ble Supreme Court of
India that,
“15. Insofar as the question of disclosure of necessary particulars
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with regard to the issue of notice in terms of proviso (b) of Section
138 of the Act, in order to enable the Court to draw presumption
or inference either under Section 27 of the G.C. Act or Section 114
of the Evidence Act, is concerned, there is no material difference
between the two provisions. In our opinion, therefore, when the
notice is sent by registered post by correctly addressing the drawer
of the cheque, the mandatory requirement of issue of notice in
terms of Clause (b) of proviso to Section 138 of the Act stands
complied with. It is needless to emphasise that the complaint must
contain basic facts regarding the mode and manner of the issuance
of notice to the drawer of the cheque. It is well settled that at the
time of taking cognizance of the complaint under Section 138 of
the Act, the Court is required to be prima facie satisfied that a case
under the said Section is made out and the aforenoted mandatory
statutory procedural requirements have been complied with. It is
then for the drawer to rebut the presumption about the service of
notice and show that he had no knowledge that the notice was
brought to his address or that the address mentioned on the cover
was incorrect or that the letter was never tendered or that the
report of the postman was incorrect. In our opinion, this
interpretation of the provision would effectuate the object and
purpose for which proviso to Section 138 was enacted, namely, to
avoid unnecessary hardship to an honest drawer of a cheque and
to provide him an opportunity to make amends.
17. It is also to be borne in mind that the requirement of giving of
notice is a clear departure from the rule of Criminal Law, where
there is no stipulation of giving of a notice before filing a
complaint. Any drawer who claims that he did not receive the
notice sent by post, can, within 15 days of receipt of summons
from the court in respect of the complaint under Section 138 of the
Act, make payment of the cheque amount and submit to the Court
that he had made payment within 15 days of receipt of summons
(by receiving a copy of complaint with the summons) and,
therefore, the complaint is liable to be rejected. A person who does
not pay within 15 days of receipt of the summons from the Court
along with the copy of the complaint under Section 138 of the Act,
cannot obviously contend that there was no proper service of
notice as required under Section 138, by ignoring statutory
presumption to the contrary under Section 27 of the G.C. Act and
Section 114 of the Evidence Act. In our view, any other
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interpretation of the proviso would defeat the very object of the
legislation. As observed in Bhaskarans case (supra), if the giving of
notice in the context of Clause (b) of the proviso was the same as
the receipt of notice a trickster cheque drawer would get the
premium to avoid receiving the notice by adopting different
strategies and escape from legal consequences of Section 138 of
the Act.”
In the matter in hand also, as discussed earlier, it is duly
established that the complainant sent demand notice on the correct
address of accused. As observed by Hon’ble Supreme Court of India in
the case of
C. C. Alavi Haji V/s. Palapetty Muhammeed and anr. (cited
supra), when the notice is sent by registered post by correctly
addressing the drawer of the cheque, the mandatory requirement of
issue of notice in terms of Clause (b) of proviso to Section 138 of the
Act stands complied with. Therefore, in matter in hand, the compliance
of Section 138(b) of the Act stands complied with by the complainant.
28. As already discussed in earlier points, it becomes clear that
the subject cheque (Exh. 22) was dishonored on 15/11/2017 for the
reason of ‘Funds Insufficient’. It is seen from the record that, the notice
(Exh. 23) was posted on 06/12/2017 to the accused and so, it is seen to
be sent within 30 days of dishonor of cheque. As discussed earlier,
notice was duly served upon the accused. It is not defence of the
accused that he repaid the cheque amount within 15 days of notice and
summons of this proceeding. So, point Nos. 3 and 4 are answered in the
“affirmative”.
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As to Point No.5 :
29. In view of the above discussion, it reveals that the essential
ingredients of the offence punishable u/s 138 of the Act are proved by
the complainant. As already discussed in earlier points, it becomes clear
from memo (Exh.50) that the cheque (Exh. 22) was dishonored on
15/11/2017. The notice (Exh. 23) was sent on 06/12/2017 and so, it is
seen to be issued within 30 days of dishonor of cheque (Exh. 22).
Therefore, the accused has to pay cheque amount within fifteen days
from 07/12/2017 but accused failed to pay it. Therefore, the cause of
action for this complaint was arose on 23/12/2017. The complainant
has to file complaint with 30 days from the day of cause of action. The
complaint was filed on 12/01/2018. Therefore, the complaint is seen to
be filed within limitation. Hence, in view of entire evidence of the
complainant and failure of the accused to rebut presumptions given
under Section 118 and 139 of the Act, it becomes clear that the accused
has committed an offence punishable u/s 138 of the Act. Consequently,
point No. 5 is answered in the “affirmative”.
AS TO POINT NO.6
30. Taking into consideration answer of points Nos. 1 to 5, it
becomes clear that, the complainant has duly proved his claim with
cogent evidence against the accused. The offence P/u/s. 138 of the
Negotiable Instruments Act is established against the accused. After
considering the conduct of the accused and nature of offence, I do not
find any special reasons or justifications to extend the benefit of
probation to him vide Section 3 to 5 of the Probation of Offenders Act,
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1958. Therefore, the accused is called upon to state on the point of
sentence.
Mumbai (Y. P. Pujari )
Date:- 24/02/2026 Metropolitan Magistrate
48th Court, Andheri, Mumbai.
Hearing on the point of sentence:
31. Accused and his advocate are absent. Further, the
complainant and his advocate are present. Ld. advocate for the
complainant submitted that, maximum punishment may be awarded.
32. Further it would not be illegal to pass the Judgment of
conviction in absence of accused as Sec. 353 (6) and Sec. 418 (2) of
Code of Criminal Procedure empowers the court to pronounce
Judgment even of conviction in absence of accused and to issue
conviction warrant if court find it to be just and proper. Hence, coupling
the provisions laid down under section 353(6) and 418(2) of Code of
Criminal Procedure with the guidelines to dispose of the old cases
expeditiously. I have also perused the decision of Hon’ble Bombay High
Court in the case of Navneet Singh Gogia’s case ( Cited Supra). Perusal
of above referred decision and cited provisions, I found it to be just and
proper to pass the Judgment of conviction in absence of accused where
the accused is bent upon to cause delay rather exercising his rights for
defence. Thus, I do not find any reason to keep the case pending when
accused himself is not willing to defend himself or even to appear
before court. Considering the age of case and the chances given to the
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accused I find it to be justifiable and proper not to wait further and
pronounce the Judgment in absence of accused.
33. The object of the Act is to enhance the credibility of the
negotiable instruments. The cheque involved in the case in hand is of
Rs. 36,44,383/-. In the present matter, on 13/11/2017 the disputed
cheque was presented to the drawee bank. If it would have had
encashed regularly, complainant could have received the amount in the
month of November 2017. That amount is admittedly lying with the
accused. The Hon’ble Supreme Court of India in the case of
R.Vijayan V.
Baby and anthers AIR 2012 SC 528, has discussed and expressed
several aspects to determine the amount of compensation and interest
on the cheque amount. Para Nos. 14 to 18 of the above judgment needs
to be reproduced here and those are as under:
“As the provisions of Chapter XVII of the Act strongly
lean towards grant of reimbursement of the loss by way of
compensation, the courts should, unless there are special
circumstances, in all cases of conviction, uniformly exercise
the power to levy fine upto twice the cheque amount
(keeping in view the cheque amount and the simple interest
thereon at 9% per annum as the reasonable quantum of loss)
and direct payment of such amount as compensation.
Direction to pay compensation by way of restitution in
regard to the loss on account of dishonour of the cheque
should be practical and realistic, which would mean not only
the payment of the cheque amount but interest thereon at a
reasonable rate. Uniformity and consistency in deciding
similar cases by different courts, not only increase the
credibility of cheque as a negotiable instrument, but also the
credibility of courts of justice.”
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34. After going through above guidelines issued by Hon'ble
Supreme Court of India, it needs to maintain uniformity by awarding 9
% per annum interest on the cheques amount by way of compensation
to the complainant. If interest on cheque amount (Rs. 36,44,383,/-) at
the rate of 9 % p.a. is calculated for the period of 97 months i.e. from
the filing of present complaint (12/01/2018 to 24/02/2026), it comes
to Rs. 26,51,289/-. Thus, the amount of Rs. 62,95,672/- is necessary
to give to the complainant as a compensation.
35. The object of the Act is to enhance the credibility of the
negotiable instruments. There is no criminal antecedent of accused
came on record. Thus, after considering said circumstances, amount of
cheques, nature and manner of the offence, in my opinion, sentence to
suffer simple imprisonment for one year will be proper and justified.
36. Hon'ble Supreme Court of India in the case of
Sugandhi
Sureshkumar Vs. Jagdishan, reported in AIR 2002 SC 681, held that in
case of offences under section 138 of the Act a Magistrate can alleviate
the grievance of the complainant by making resort to Section 357 (3) of
Criminal Procedure Code. In this case Hon’ble Supreme Court of India
also held that the Court may enforce order of compensation by
imposing sentence in default. Resultantly, following order is passed:
ORDER
1. Accused Mr. Panchalal Devji Patel- Proprietor of M/s.
Unique Enterprises, Age : Adult, is convicted under
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Section 255 (2) of the Code of Criminal Procedure,
1973 for an offence punishable under Section 138 of
the Negotiable Instruments Act, 1881 and sentenced
to suffer simple Imprisonment for one year.
2. Accused is directed to pay compensation Rs.
62,95,672/- (Rs. Sixty Two Lacs Ninety Five
Thousand Six Hundred Seventy Two Only) to the
complainant within three months from today, in
default to suffer Simple Imprisonment for nine
months.
3. Accused to surrender to his bail bond.
4. Muddemal being an original cheque and bank memo,
be returned to the complainant after appeal period is
over.
5. No question of Set-off under Section 428 of the Code
of Criminal Procedure, 1973 as the accused has not
spent any period in the custody during the trial.
6. Today i.e. on the date of judgment accused remained
absent, hence issue standing Non-bailable warrant against
the accused for his arrest through concerned police station
for execution of sentence in view of Section 418 (2) of
Cr.P.C.
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7. The copy of this Judgment shall be send to the convicted
accused, free of cost, in view of section 363(1) of the Code
of Criminal Procedure, 1973.
8. Dictated and pronounced in open court.
Mumbai (Y. P. Pujari )
Date:- 24/02/2026 Metropolitan Magistrate
48th Court, Andheri, Mumbai.
Dictated On : 24/02/2026
Typed On : 24/02/2026
Signed On : 24/02/2026
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