Final Order 1

Order Details: Copy  of Judgment
Pdf Text: 1 C. C. No. 768/SS/2018
Filed on : 15/02/2018
Registered on : 15/02/2018
Decided on : 18/03/2023
Duration : 05Y. 01M. 03D.
IN THE COURT OF METROPOLITAN MAGISTRATE
48TH COURT ANDHERI MUMBAI
(Presided over by K. G. Sawant)
Case No. 768/SS/2018
CNR: MHMM190020622018
Exh. No.
Dukraft Paper Distributor Pvt. Ltd.
A company registered under the provisions
of the Companies Act and having their registered
office at 107/A, 1st Floor Citi mall,
Andheri Link Road, Andheri (W),
Mumbai – 400053 through their director
Anuj Ramavtar Agarwal. …Complainant
Versus
Mr. Salim Khan.
Proprietor of New Paper Box addressed at
(I) Azmi Compound, Gala No. 1,
Durga Mandir Galli, Kherani Road,
Saki Naka, Andheri (E), Mumbai – 400072
(ii) Gilbert Compound, Gala No. 24
Durga Mandir Galli, Kherani Road,
Saki Naka, Andheri (E), Mumbai – 400072 ...Accused
Offence punishable U/s. 138 of
Negotiable Instruments Act
Advocate Atul Bhatt for the complainant
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Advocate Aniket Yadav/Reenu Yadav for accused.
JUDGMENT	JUDGMENT
(Delivered on 18/03/2023)
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 registered under companies Act 1956.
Complainant has filed this complaint through its authorized
representative Mr. Anuj Agarwal. It is the case of complainant that,
accused had purchased goods from the complainant company and in
order to pay amount against those goods, he had issued cheque bearing
nos. 000714 and 000715 dated 15/09/2017 and 15/10/2017 for an
amount of Rs. 50000/ each, drawn from account of New Paper Box, a
proprietary concern of which accused is the proprietor.
3] Complainant presented said cheques for clearance with its
banker namely HDFC bank, Andheri (w) branch, however vide bank
memo dated 14/02/2017 cheques were returned unpaid for reason
“Exceeds arrangements”.
4] It is further case of complainant that, after dishonoure of
cheques, complainant issued statutory demand notice to accused on
01/01/2018, calling upon them to pay the cheque amount, within
stipulated time. Accused refused to accept the notice and hence it was
returned with postal remark “Refused” dated 06/01/2018. As amount
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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.
5] 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.
6] In order to prove guilt of accused, complainant examined its
representative namely Anuj Agarwal (C.W.1) by filing his affidavit in
lieu of examinationinchief at Exh. 19, 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.
Original challan Exh. 22
Tax invoice Exh. 23
Disputed cheques Exh. 24 and 25
Cheque returned memos Exh. 26 and 27
Office copy of notice Exh. 28
Postal receipts Exh. 29 and 30
Returned envelope Exh. 31 and 32
Minutes of meeting Exh. 33
Master date of complainant company along
with certificate U/s. 65 (B) of Evidence Act.
Exh. 34 to 36
Copy of gazette along with certificate u/s. 65
(B) of Evidence Act.
Exh. 37
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7] After completion of complainant's evidence, statement of accused
vide Section 313 of Cr.P.C. was recorded at Exh. 40, wherein accused
has taken defence of falsely implication. Accused in support of his
defence neither examined herself nor any witness.
8] Complainant has filed his written notes of argument at Exh. 43,
while Ld. Advocate for accused has filed his written notes of argument
at Exh. 46.
9] 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 “Exceeds
arrangements”?
…. In the
affirmative
3. Does complainant further prove that he had
issued statutory demand notice to the
accused within limitation demanding cheque
amount ?
…. In the
affirmative
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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.
REASONS
Admitted/undisputed fact
10] Before going further it is necessary to mention
admitted/undisputed facts of this case.
Admittedly disputed cheque is drawn from the
account of accused and it bears his signature.
AS TO POINT NO. 1
11] The accused is 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.
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 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
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.
12] 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;
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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;
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.
13] Being cumulative, it is only when all above mentioned
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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
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
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prove a fact.
14] In order to prove his case, complainant examined its
representative namely Anuj (C.W.1) by filing his affidavit of
examinationinchief at Exh. 19, by which he has reiterated his case
from the complaint. His evidence shows that, he is an authorized
representative of complainant company. His evidence further shows
that, accused is proprietor of his firm by name New Paper Box. His
evidence further shows that, complainant company had sent goods to
the accused by raising invoices and in order to pay amount against
those invoices, disputed cheques for total amount of Rs. 1,00,000/
were issued by the accused.
15] Ld. Advocate for accused took the crossexamination of this
witness at considerable length. Accused has not denied issuance of
cheques in favor of complainant and his signature on those cheques.
According to accused, disputed cheques were issued by him in favor of
complainant by way of security only. However, by misusing these
cheques, false complaint is filed by the complainant.
16] Through crossexamination, Ld. Adv. For accused has denied
transaction with the complainant. It is his argument that, no goods were
received by the accused as mentioned in the invoices. He also argued
that, complainant has failed to show delivery of goods and cheques
were issued for security purpose only. It is necessary to note here that,
once accused come before court with the case that, disputed cheques
were issued, for security purpose only, in that case, it is for the accused
to explain against which transaction cheques were issued by him for
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security purpose. It is unbelievable and not acceptable that, cheques are
issued to any person by way of security, without having any transaction
with that person. It is not the case of accused that, either for future
transaction or in a routine course of business, these cheques were issued
for a security purpose, in favor of complainant. Therefore, contention of
accused that, cheques were issued for security purpose is not acceptable
and same is not duly proved.
17] Complainant has produced on record tax invoice at Exh.
23, dated 11/03/2017, which shows that, in view of oral order dated
06/03/2017, placed by the accused, complainant company had supplied
paper and paper board worth Rs. 3,01,786/ to the accused.
Complainant has produced on record, delivery challan at Exh. 22. Said
challan bears seal of accused firm as a new paper box. Accused has
denied his signature on the delivery challan. However, he did not
produce anything on record to show that, seal put on delivery is not of
his company. Thus, delivery challan clearly shows that, goods were
delivered to the accused. It is necessary to note here that, demand
notice sent to the accused is received back with remark refused. It is
also matter or record that, disputed cheques are dishonored for the
reason “Exceeds arrangement”. Accused never issued any letter to the
complainant stating that, these cheques are issued for security purpose
only and not for any liability. He never issued letter to the bank to stop
payment of these cheques. In short, there is no sufficient material
available on record to rebut the presumption U/sec. 139 of N. I. Act.
Oral and documentary evidence filed on record by the complainant
clearly shows that, disputed cheques were issued by the accused against
the payment of goods supplied by complainant to him. Thus, it becomes
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clear that, disputed cheques were issued for discharging legal
enforceable liability. In the result, point no. 1 is answered in the
affirmative.
AS TO POINT NO. 2 TO 5
18] In order to prove that, cheques were returned unpaid for
reason “Exceed arrangement” complainant has relied upon oral
evidence of its representative, in addition to documentary evidence i.e.
cheque return memo filed at Exh. 26 and 27, issued by the bank, which
shows that disputed cheques were dishonored for reason “Exceeds
arrangement”. As per section 146 of N.I. Act, court shall in respect of
every proceeding under this chapter, on production of bank slip or
memo having thereon official mark denoting that cheque has been
dishonored, presume the fact of dishonor of such cheque, unless and
until such fact is disproved. Accused did not bring any evidence to
show that cheques were not dishonoured. Hence, it remains proved
that disputed cheques were dishonoured for the reason “Exceeds
arrangement”.
19] In order to show that statutory demand notice was issued
to accused within statutory period, complainant has filed on record
office copy of notice dated 01/01/2018 at Exh. 28. Complainant has
produced on record postal receipts at Exh. 29 and 30 and returned
envelopes from the post at Exh. 31 and 32. Remark on envelope shows
that, accused has refused to accept the notice and hence, same were
returned to the sender. It is not the case of accused that, address shown
on demand notice is incorrect address. Therefore, in view of section 27
of General Clauses Act r/w sec. 114 of Evidence Act, and in view of
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pronouncement of Hon'ble Supreme Court in the case of C.C. Alavi Haji
V/s. Palapetty Muhammed decided in criminal appeal no. 767/2007
dated 18/05/2007 it is to be presumed that, demand notice was duly
served upon accused. Admittedly, accused did not pay cheque amount
to the complainant even after service of notice. It is a matter of record
that notice was sent within limitation and complaint filed on
15/02/2018 is also within limitation. In result point no. 2 to 5 are
answered in the affirmative.
AS TO POINT NO.6
20] Taking into consideration answer of points Nos. 1 to 5, it
becomes clear that, the complainant has duly proved its 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 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 :18/03/2023 Metropolitan Magistrate,
48th Court, Andheri, Mumbai.
Hearing on the point of sentence:
21] Inspite of repeatedly called neither accused nor his
advocate appeared in this matter. Record shows that accused is
avoiding to remain present in the matter without any justifiable
reasons. Therefore, I am constrained and compelled to proceed with
the judgment in absence of accused. By his conduct accused has waived
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off his chance to submit on the point of sentence. The offence
punishable U/s. 138 of N.I. Act is required to be tried summarily. For
such trials procedure contemplated in Code of Criminal Procedure for
the trial of summons case as a specified in Chapter XX of code is to be
adopted. This case is also tried as per the procedure prescribed for the
trial of summons case vide Chapter XX of Cr.P.C.
22] I have carefully gone through the provisions of Chapter XX
and Section 255 of the Code of Criminal Procedure. Unlike warrant
trial procedure, it is nowhere expressed under Chapter XX that accused
must be heard on the point of sentence before pronouncing it. Hence as
a mandate, it can't be invoked in summons cases. In fact in present
case, inspite of any speaking provisions, accused was given chance to
appear and submit on the point of sentence, but it was accused who
waved off his chance to open mouth on the point of sentence.
Therefore, this court proceeds further in the absence of accused. On
point of sentence Ld. Advocate for complainant has submitted that
maximum sentence of imprisonment and fine amount be imposed on
accused. He also prayed for compensation.
23] Admittedly, In this matter, cheques are issued in the year 2017.
Almost five years have been passed from the date of issuance of cheque.
Considering nature of offence, conduct of the accused, the period from
which matter is pending in my opinion following order will meet the
ends of justice:
ORDER
i. The accused Mr. Salim KhanProprietor of New Paper Box is
hereby convicted for the offence punishable under section 138 of the
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Negotiable Instrument Act, 1881 vide section 255(2) of the Code of
Criminal Procedure, 1973.
ii. Accused is sentenced to suffer simple imprisonment for period of
Six months and shall pay compensation of Rs. 2,00,000/ (Rs. Two
Lacs) to the complainant vide Section 357(3) of the Code of Criminal
Procedure, in default of payment of compensation, accused shall suffer
further simple imprisonment for the period of one month.
iii. The amount of compensation realized from the accused, shall be
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. Today i.e. on the date of judgment accused remained absent,
hence issue standing Nonbailable 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.
vii. The copy of this Judgment shall be send to the convicted accused,
free of cost, immediately after it is prepared, in view of section 363(1)
of the Code of Criminal Procedure, 1973.
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viii. Dictated and pronounced in open court.
Mumbai (K. G. Sawant)
Dt. 18/03/2023 Metropolitan Magistrate
48th Court, Andheri, Mumbai.
Dictated On : 18/03/2023
Typed On : 18/03/2023
Signed On : 18/03/2023
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