Final Order 1

Order Details: Copy  of Judgment
Pdf Text: 1 C. C. No. 717/SS/2018
Filed on : 09/02/2018
Registered on : 09/02/2018
Decided on : 29/05/2023
Duration : 05Y. 03M. 20D.
IN THE COURT OF METROPOLITAN MAGISTRATE
48TH COURT ANDHERI MUMBAI
(Presided over by K. G. Sawant)
Case No. 717/SS/2018
CNR: MHMM190018212018
Exh. No.
Kokuyo Camlin Limited (KCL)
Through its authorized signatory and
Legal Representative
Mr. Jayant Pralhad Deshpande, Aged : 47 years,
48/2, Hilton House, Central Road,
M.I.D.C., Andheri (E), Mumbai – 400 093. …Complainant
Versus
1. M/s. Veer Metals,
B/301, Amberjyot, Retibunder Cross Road,
Devichanpada, Gaondevi,
Dombivli (W),Thane – 421202.
Also At:
C/o – P and G Fabricators,
C2, Adiwasi Pada, Road No. 21,
Wagle Industrial Estate,
Thane (W), Pin Code 400604.
2. Mr. Chetan Panchal,
proprietor of M/s Veer Metals,
B/301, Amberjyot, Retibunder Cross Road,
Devichanpada, Gaondevi,
Dombivli (W),Thane – 421202.
Also At:
C/o – P and G Fabricators,
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2 C. C. No. 717/SS/2018
C2, Adiwasi Pada, Road No. 21,
Wagle Industrial Estate,
Thane (W), Pin Code 400604. ...Accused
Offence punishable U/s. 138 of
Negotiable Instruments Act
Advocate Shri. Sachin D. Rege/ Ms. Padma Singh for the complainant
Advocate Shri. P.C. Mishra along with Adv. S. N. Imam for accused.
JUDGMENT	JUDGMENT
(Delivered on 29/05/2023)
Accused is mired in the trial, for having committed an
offence punishable U/s. 138 of the Negotiable Instruments Act, 1881.
(Hereinafter it is referred as 'N. I. Act' in short.)
Bonsai facts of the complaint are as under :
2] Complainant is a company incorporated under the companies Act
1956 engaged in the business of manufacturing, packing, selling and
distributing stationery products. Present complaint is filed by the
complainant through its authorized representative, Mr. Jayant
Deshpande. Accused no. 1 is the sole proprietorship firm engaged in
the business of manufacturing and supply of special purposes machines.
Accused no. 2 is the proprietor of accused no. 1 firm and also signatory
of disputed cheque. Around February 2016 complainant company
entered into agreement with accused no. 1 for supply of PLC control
permanent marker half sleeves insertion and positioning Special
Purpose Machine (permanent marker machine).
3] As per said agreement, accused agreed to supply said machine for
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total consideration of Rs. 11,25,000/. Out of which, 50% of total
amount was payable in advance. Said machine was to be delivered by
the accused to the complainant within 14 weeks from the date of
receipt of advance payment and in the event accused was unable to
deliver and installed the machine, the complainant company was
entitled to the compensation as mentioned in the agreement. According
to complainant, as per agreement they paid an amount of Rs.
6,32,800/ to the accused no. 1 in the month of February 2016.
4] In July 2016 complainant company entered into an agreement
with accused no. 1 for supply of paper tray machine for total
consideration of Rs. 5,12,000/. In respect of said machine also, 50%
amount was payable in advance and it was to be delivered within 10
weeks from the date of advance payment. For paper tray machine also,
complainant company paid an amount of Rs. 2,30,400/ by way of
advance payment to the accused in the month of July 2016. However,
accused failed and neglected to deliver the machine to the complainant.
Finally, complainant company issued demand notice dated 14/08/2017
calling upon accused to deliver the machine or refund of an amount of
Rs. 6,32,800/ and 2,30,400/ along with interest @ 0.5% per week
from 8 October 2016.
5] Thereafter in partial discharge of his liability, accused no. 1
issued the cheque bearing no. 087258 dated 30/11/2017 for an amount
of Rs. 2,30,400/ drawn from his account maintained with Dombivali
Nagari Sahakari Bank Ltd., Anand Nagar, Dombivali (W). He also
issued cheque bearing no. 087259 dated 15/02/2018 for an amount of
Rs. 6,32,800/. Complainant presented the cheque bearing no. 087258
for clearance, however it was returned unpaid with remark “Funds
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Insufficient” vide memo dated 04/12/2017. On December 30, 2017
complainant issued statutory demand notice to the accused calling upon
him to pay the cheque amount of Rs. 2,30,400/. Notice was duly
served upon accused on 01/01/2018. Inspite of service of notice,
accused did not pay cheque amount. As amount claimed in notice, was
not paid by the accused, complainant left with no other option than to
knock the door of the court seeking justice and ipso Jure case came
before this court, which was filed on 09/02/2018.
6] After issuance of process, accused appeared and thereafter
substance of accusation was read over to the accused to which accused
pleaded not guilty and opt for trial.
7] In order to prove guilt of accused, complainant examined its
representative namely Jayant Deshpande (C.W. 1) by filing his affidavit
in lieu of examinationinchief at Exh. 17 and additional affidavit at
Exh. 47, vide section 145 of the Negotiable Instrument Act. Besides oral
evidence, complainant has relied upon following documentary evidence
that includes:
Description of documents Exh. No.
Copy of board resolution Exh. 19
Original agreement Exh. 20
Proforma Invoice Exh. 21
Purchase order Exh. 22
Bank statement ArticleA
Original Cheque Exh. 23
Cheque returned memo Exh. 24
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Office copy of notice Exh. 25
Postal receipts Exh. 26 to 29
Postal acknowledgement Exh. 30 and 31
Returned envelope from the post Exh. 32 and 33
Sealed envelope opened in presence of both
parties and notice from envelope
Exh. 34 and 34A
8] After completion of complainant's evidence, statement of accused
vide Section 313 of Cr.P.C. was recorded at Exh. 54, wherein accused
has taken defence of falsely implication. Accused in support of his
defence neither examined himself nor any witness. Accused has
admitted acceptance of amount from the complainant. However,
according to accused, he was not at fault for not completing the said
transaction. It is the defence of accused that, both machines were ready
but complainant wanted these machines in 50% of its actual price.
9] Complainant has filed their written notes of argument at Exh. 55,
while Ld. Advocate for accused has filed their written notes of argument
at Exh. 55A. It is necessary to note here that, accused has issued two
different cheques i.e. one for an amount Rs. 6,32,800/ and another for
an amount of Rs. 2,30,400/. This complaint is for cheque for an
amount of Rs. 2,30,400/ while another complaint bearing C.C. No.
1957/SS/2018 is for dishonored of cheque for an amount of Rs.
6,32,800/. Ld. Advocate for accused has conducted common cross
examination of complainant's witness Mr. Jayant Deshpande for these
two cases. It is also necessary to note here that, emails and some other
documents are produced on record by the complainant in C.C. No.
717/SS/2018 only and same are to be read for both matters.
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10] Heard Ld. Advocate for both parties at length. Perused written
notes of argument filed on behalf of both parties. In view of accusation
and argument of both parties, following points arise for my
determination and I have recorded my findings thereon as follows:
Sr.
No.
Points Findings
1. Does complainant prove that disputed
cheque was issued by the accused, in favour
of complainant for discharging legal
enforceable liability?
…. In the
affirmative
2. Does complainant prove that cheque was
returned unpaid for reason “Funds
Insufficient”?
…. In the
affirmative
3. Does complainant further prove that he had
issued statutory demand notice to the
accused within limitation demanding
cheques amount ?
…. In the
affirmative
4. Does complainant further prove that inspite
of service of notice accused has failed to pay
cheque amount to complainant within
statutory limit?
…. In the
affirmative
5. Whether complaint is filed within period of
limitation? .. In the
affirmative
6. What order ?
.. Accused is
convicted
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REASONS
Admitted/undisputed fact
11] Before going further it is necessary to mention
admitted/undisputed facts of this case.
Admittedly disputed cheque has drawn from the
account of accused no.1 and it bears signature of
accused no. 2. It is also admitted fact that, complainant
had placed order with the accused for manufacturing of two
machines and he has paid 50% of machines price in advance to the
accused.
AS TO POINT NO. 1
12] The accused are roped in the offence punishable u/s. 138
of the N.I. Act. Upon perusal of relevant provision it is manifest that to
constitute offence punishable U/s. 138 of N.I. Act following ingredients
are to be fulfilled which are mandatory in nature.
 A person must have drawn a cheque on an account maintained by
him in a bank for the payment of certain amount of money to
another person from out of that account for the discharge in whole
or in part, of any debt or other liability.
 That the cheque has been presented to the bank within a period of
Three months from the date, on which it is drawn or within period
of its validity, whichever is earlier.
 That the cheque is returned by the bank unpaid, either because the
amount of money standing to the credit of the account, is
insufficient to honour the cheque or that exceeds and amount
arranged to be paid from that account by an agreement made with
the bank.
 The payee or the holder in due course of the cheque makes a
demand for the payment of said amount of money by giving a
notice in writing, to the drawer of the cheque, within 30 days of
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the receipt of the information by him from the bank regarding
dishonor of the cheque as unpaid.
 The drawer of the said cheque fails to make payment of said
amount of money to the payee or holder in due course of the
cheque within 15 days from the receipt of the said notice.
 The payee or holder in due course lodged written complaint in the
court within 30 days thereafter.
 The drawer of the said cheque failed to rebut the presumption u/s.
118 and 139 of the N.I. Act.
13] Before going further, it is necessary to mention here that, as per
Section 139 of N.I. Act, there is a presumption in favour of holder of
cheque. So also as per Section 118 of the Said Act, there is a
presumption that said cheque was issued for certain consideration. For
ready reference Section 118 and 139 of the said act are quoted below:
Sec. 118Presumptions as to negotiable instruments. Until the
contrary is proved, the following presumptions shall be made:
a) of consideration. that every negotiable instrument was
made or drawn for consideration, and that every such
instrument, when it has been accepted, indorsed, negotiated or
transferred, was accepted, indorsed, negotiated or transferred
for consideration;
b) as to date. that every negotiable instrument bearing a date
was made or drawn on such date;
c) as to time of acceptance. that every accepted bill of
exchange was accepted within a responsible time after its date
and before its maturity;
d) as to time of transfer . that every transfer of a negotiable
instrument was made before its maturity;
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e) as to order of indorsements. that the indorsements
appearing upon a negotiable instrument were made in the
order in which they appear thereon;
f) as to stamp. that a lost promissory note, bill of exchange or
cheque was duly stamped;
g) that holder is a holder in due course. that the holder of a
negotiable instrument is a holder in due course:
Provided that, where the instrument has been obtained from its
lawful owner, or from any person in lawful custody thereof, by
means of an offence or fraud, or has been obtained from the
maker or acceptor thereof by means of an offence or fraud, or
for unlawful consideration, the burden of proving that the
holder is a holder in due course lies upon him.
Section 139. Presumption in favour of holder. 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 the discharge, in whole or in part, of any debt or other
liability.
14] Being cumulative, it is only when all above mentioned
ingredients are satisfied then the person who had drawn the cheque can
be deemed to have been committed an offence u/s .138 of the Act. For
the purpose of section 138, debt or other liability means a legally
enforceable debt or other liability. To understand the spirt of provisions
contemplated vide section 138 to 141 of Negotiable Instrument Act,
Section 139 of the said act plays significant role. In view of express
provision of section 139 of N.I. Act a presumption shall be drawn that
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the holder of cheque, received the cheque, of the nature referred to in
Section 138 for the discharge of any debt or other liability unless
contrary is proved. Thus, it gives power to court to presume unless
contrary is proved that the holder of cheque received the cheque for
discharge in whole or in part of any debt or other liability. The word
“shall presume” as per Section 4 of Indian Evidence Act means
whenever it is directed by this act, that the court shall presume a fact, it
shall regard such fact as a proved unless and until it is disproved. Thus,
the burden of proof as to cheque has not been issued as a legal debt or
liability is always on accused and it is for him to rebut said
presumption. A useful guidance on the said point can be taken from the
verdict delivered by Hon'ble Supreme Court in the case of Goa Plast
Pvt. Ltd. V/s .Chico D'souza (2004 SCC (cri) 499) wherein the court
has considered the object behind section 138 and 139 of the N.I. Act
and held that the entire burden is on accused to show that cheque was
not issued for any debt or liability as mentioned in the complaint.
Hon'ble Court has further held that presumption u/s. 139 is a rebuttable
and it can be rebutted on the basis of evidence brought by the
complainant or by leading his own evidence. The standard of proof for
rebutting the presumption is preponderance of probabilities which is a
standard applicable to the accused whenever accused is required to
prove a fact.
15] In order to prove its case, complainant examined its
representative Mr. Jayant Deshpande (C.W.1) by filing his affidavit of
examinationinchief at Exh. 14, wherein he has reiterated his case from
the complaint. His evidence shows that, in the month of July 2016
complainant company had paid an amount of Rs. 2,30,400/ to the
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accused against the making of paper tray machine. His evidence further
shows that, time fix for delivery of machine was upto 29th September
2016. His evidence further shows that accused could not prepare
machine within time given and hence complainant company demanded
back advance amount by issuance of notice. His evidence further shows
that, in order to partial discharge of his liability, accused issue disputed
cheque for an amount of Rs. 2,30,400/ in favour of complainant.
16] Ld. Advocate for accused conducted crossexamination of
complainant's witness at length. From perusal of said cross
examination, it appears that, accused has not denied transaction
between him and complainant, however, he tried to take defence that,
machines were ready within time as agreed between the parties, but no
one from complainant company came forward to take trial of machines.
It is the defence of accused that, complainant failed to pay the balance
amount of 50% and collect the machines from him. Thus, it is tried to
argue on the part of accused that, due to complainant's fault, said
transaction could not complete.
17] During crossexamination, both parties have produced on record
email correspondence taken place between them, which shows that,
inspite of sufficient time given, accused could not prepare and deliver
the machines to the complainant. It appears that, vide email dated
05/05/2017 accused has communicated to the complainant that, trial of
sleeving machine will be conducted on 10th May followed by that the
tray making will be on 15th of May. It is further mentioned in the said
email that they have planned to arrange the meeting of 20th May.
Relying on said email Ld. Advocate for accused has argued that, no one
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on behalf of complainant company turn up to take the trial of the said
machine on or after 20th May 2017. On the other hand, Ld. Advocate
for complainant drew my attention towards the emails dated
06/06/2017, 27/06/2017, 05/07/2017, 21/9/2017 and 10/11/2017.
It appears that, in email dated 06/06/2017 complainant company has
communicated to the accused that, they are withdrawing from this
project and requested to return all the advances. It appears that,
thereafter again on 21/06/2017 one Vaishali Sawant on behalf of
complainant company, wrote email to the accused stating that yet they
have not received advance payment. Further on 23/06/2017, Mr. Atul
Panchal on behalf of accused sent reply stating that, reverting back on
Monday 26/06/2017. It appears that, on 27/06/2017 Mr. Atul on
behalf of Veer Metals sent email to the complainant stating that, they
are bound to return advance payment to the complainant within two
months. It is stated in the email that due to his health issues the SPM
got delayed. In para no. 4 and 5 of said email, it is stated that,
“4) Moreover we would like to take 2 more month in addition to
these 2 months i.e. within 4 months we will return the advance and
for these additional 2 months, nominal bank interest will be paid
separately.
5) We would also like to wish you inform that in next 2 months if we
could offer you the machine (fully functional and satisfactory to you)
will your person be available for demo/trials?
Sorry for the inconvenience caused due to my health issues.”
18] From the contents of para no. 5 of said email it becomes clear
that, in the month of June 2017 also machines were not kept ready by
the accused in order to give delivery to the complainant. Vide email
dated 21/09/2017 complainant has demanded cheque from the
accused. Thus, all these correspondences between complainant and
accused clearly shows that, accused has failed to prepare the machines
within time as agreed between the parties.
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19] During crossexamination, Ld. Advocate for accused has denied
email dated 27/06/2017 and contents from the said email. However, it
is necessary to note here, earlier from same email I.D. accused has sent
emails to the complainant and same are relied upon by the accused.
Accused has produced on record earlier emails and same are marked as
Exh. 42. Therefore, contention of accused that, no such email dated
27/06/2017 was sent by the accused to the complainant company is not
acceptable. In such circumstances argument of Ld. Advocate for
accused that, machines were ready but complainant failed to take the
trial of the said machine and hence accused is not liable to repay
advances to the complainant is not acceptable.
20] It is also defence of accused that, there is no proper authorization
in favour of Mr. Jayant Deshpande to file this complaint and lead
evidence on behalf of complainant company. It appears that, initially
complainant had not produced on record copy of minutes, however
later on complainant company has produced on record copy of minutes
dated 25/01/2018 showing that, complainant company has authorized
Mr. Jayant Deshpande to file complaint and lead evidence on behalf of
complainant company. Complainant had brought original minute book
in the court and copy produced on record has been verified by the
judicial clear of this court with original minutes books. Therefore, it
becomes clear that, there is proper authorization in favour Mr. Jayant
Deshpande to file this complaint.
21] In view of above discussion it becomes clear that, in view of
agreement between the parties, complainant company had paid an
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amount of Rs. 2,30,400/ to the accused by way of advance against the
supply of paper tray machine, however accused did not supply said
machine to the complainant. Therefore, disputed cheque was issued b
the accused for repayment of advance amount to the complainant.
Thus, it becomes clear that, disputed cheque was issued by the accused
in favour of complainant for discharging legally enforceable liability. In
result point no. 1 is answered in the affirmative.
AS TO POINT NO. 2 TO 5
22] Disputed cheque was dishonoured vide memo dated 04/12/2017.
Complainant has produced on record cheque returned memo issued by
the HDFC Bank. Said memo bears seal of the bank and signature of
bank officer therefore as per Section 146 of the Negotiable Instrument
Act, it is to be presumed that, cheque was dishonoured for the reasons
mentioned in memo i.e. for the reason “Insufficient Fund” in the
account of drawer.
23] It is a matter of record that, complainant had sent demand notice
to the accused on 30/12/2017. A. D. cards produced on record shows
that, notices were duly served upon accused . It is also matter of record
that, accused neither replied nor complied with the demand notice. It is
also matter of record that, complainant has filed this complaint within
limitation. In result, point nos. 2 to 5 are answered in the affirmative.
AS TO POINT NO.6
24] 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
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find any special reasons or justifications to extend the benefit of
probation to them vide Section 3 to 5 of the Probation of Offenders Act,
1958. Therefore, the accused is called upon to state on the point of
sentence.
(K. G. Sawant)
Date : 29/05/2023 Metropolitan Magistrate,
48th Court, Andheri, Mumbai.
Hearing on the point of sentence:
25] I explained to accused that, he is held guilty for the offence of the
dishonor of cheque and that the N.I. Act has provided punishment to
the offence of imprisonment upto two years and fine upto twice of the
cheque amount. Thereafter, I asked the accused to clarify her stand on
the nature and quantum of the sentence, if any.
26] Upon asking on the point of sentence, accused submitted that he
is the only earning person in his family. He further submitted that, his
two daughters and old aged mother are dependent on his income.
Hence prayed for leniency. Ld. Advocate S. N. Imam for accused has
also prayed to show leniency to the accused. On the other hand, Ld.
advocate Padma Singh for complainant has prayed to impose maximum
punishment and she also prayed to grant maximum compensation to
the complainant.
27] Heard both parties and their Ld. Advocates at length on the point
of sentence. So far as granting compensation is concerned, Hon'ble
Supreme Court in the case of M/s. Kalamani Text and another v/s. P.
Balsubramanian, decided in Special Leave Petition(Cri) No.
1876/2018 dated 10/02/2021 has given certain guidelines and for
ready reference relevant paras from said judgment are quoted below :
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“As regard to the claim of compensation raised on behalf of the respondent,
we are conscious of the settled principles that the object of Chapter XVII of
the NIA is not only punitive but also compensatory and restitutive. The
provisions of NIA envision a single window for criminal liability for dishonour
of cheque as well as civil liability for realization of the cheque amount. It is
also well settled that there needs to be a consistent approach towards
awarding compensation and unless there exist special circumstances, the
Courts should uniformly levy fine up to twice the cheque amount along with
simple interest at the rate of 9% per annum.”
28] Present Matter is pending since 2018. Considering nature of
offence, period since which case is pending, considering purpose of
legislature behind enactment of Section 138 of N.I. Act and guidelines
laid down by Hon'ble Supreme Court in relation to compensation
Suitable and appropriate compensation alongwith penal action against
the accused would suffice the purpose and also meets the ends of
justice. In result, I proceed to pass following order :
ORDER
i. The accused No. 2 Mr. Chetan Panchal Proprietor of accused No.
1 M/s. Veer Metals is hereby convicted for the offence punishable under
section 138 of the Negotiable Instrument Act, 1881 vide section 255(2)
of the Code of Criminal Procedure, 1973.
ii. Accused is hereby sentenced to suffer simple imprisonment for
period of three months and further he shall pay compensation of Rs.
3,50,000/ (Rs. Three Lacs Fifty Thousand Only) to the complainant,
vide Section 357(3) of the Code of Criminal Procedure, Accused shall
pay above amount of compensation within two months from today, in
default of payment of compensation, accused shall suffer simple
imprisonment for the period of 15 days.
iii. The amount of compensation realized from the accused, shall be
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paid to the complainant, subject to expiry of the appeal period or the
orders of Honourable Appellate Court (if any).
iv. Accused to surrender his bail bonds.
v. No question of setoff under section 428 of the Code of Criminal
Procedure, 1973, as the accused has not spent any period in the custody
during the trial.
vi. The copy of this Judgment be provided free of cost to the
accused, immediately after it is prepared, in view of section 363(1) of
the Code of Criminal Procedure, 1973.
vii. Accused is informed about having his right to prefer appeal
against this judgment within a statutory period before Hon'ble Sessions
Court.
viii. Dictated and pronounced in open court.
Mumbai (K. G. Sawant)
Dt. 29/05/2023 Metropolitan Magistrate
48th Court, Andheri, Mumbai.
Dictated On : 29/05/2023
Typed On : 29/05/2023
Signed On : 29/05/2023
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