Final Order 1

Order Details: Copy  of Judgment
Pdf Text: 1 C. C. No. 1836/SS/2018
Filed on : 16/04/2018
Registered on : 16/04/2018
Decided on : 15/06/2023
Duration : 05Y. 01M. 29D.
IN THE COURT OF METROPOLITAN MAGISTRATE
48TH COURT ANDHERI MUMBAI
(Presided over by K. G. Sawant)
Case No. 1836/SS/2018
CNR: MHMM190051462018
Exh. No.
Mr. Prabhakar Ramchandra Javkar.
Age : 57 years, Occu : Business
Residing at A4, Mahavir Estate, Behind Tilak Nagar
Gate, AndheriGhatkopar Link Road,
Sakinaka, Mumbai – 400072. …Complainant
Versus
Mr. Bipin Damji Shah.
Age : Adult, Occu: Business and Film Producers,
R/o. A1105, Marathon Cosmos,
Near Nirmal Lifestyle Mall,
LBS Marg, Mulund (W),
Mumbai – 400080. ...Accused
Offence punishable U/s. 138 of
Negotiable Instruments Act
Advocate Y. K. Chaudhary for the complainant
Advocate R. R. Pandey for accused.
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JUDGMENT	JUDGMENT
(Delivered on 15/06/2023)
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] It is the case of complainant that accused is producer of
Marathi Film “Ranga Paanga” and invited the complainant for the
premier of the said film. Somewhere in October 2017, accused
approached to complainant and prayed for financial assistance of Rs.
10,00,000/ in order to produce new Marathi Movie. He promised to
return the said amount shortly. Believing on the words of accused,
complainant paid an amount of Rs. 7,50,000/ to the accused in
presence of witnesses. In the month of December 2017 accused handed
over two post dated cheques bearing no. 000572 dated 21/12/2017 for
an amount of Rs.3,00,000/ and cheque no. 028461 dated 20/02/2018
for an amount of Rs. 2,50,000/, drawn from his account, in favour of
complainant. On instruction of accused, on 01/03/2018 complainant
presented cheque No. 028461 for clearance with his banker, however
vide memo dated 03/03/2018, said cheque returned unpaid for reason
“Funds Insufficient”. Similarly, another cheque was presented by the
complainant for clearance on 16/03/2018, however same was also
returned unpaid vide memo dated 16/03/2018 for reason “Funds
Insufficient”.
3] After dishonoure of cheques, complainant issued statutory
demand notice to accused on 23/03/2018 by RPAD calling upon
accused to pay the cheque amount, within stipulated time. Notice was
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duly served upon accused on 24/03/2018, however accused did not pay
the cheque amount but replied to the demand notice, vide reply dated
06/04/2018. 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 16/04/2018.
4] 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.
5] In order to prove guilt of accused, complainant examined himself
(C.W. 1) by filing his affidavit in lieu of examinationinchief at Exh. 16,
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.
Two original cheques Exh. 24 and 25
Two cheque returned memos Exh. 26 and 27
Office copy of demand notice Exh. 28
Postal receipts Exh. 29
Reply by accused Exh. 30
6] After completion of complainant's evidence, statement of accused
vide Section 313 of Cr.P.C. was recorded at Exh.37, wherein accused
has taken defence of falsely implication. Accused in support of his
defence examined himself at Exh. 41.
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7] Complainant has filed his written notes of argument at Exh. 49,
while Ld. Advocate for accused has filed his written notes of argument
at Exh. 50.
8] 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
cheques were issued by the accused, in
favour of complainant for discharging legal
enforceable liability?
…. In the
affirmative
2. Does complainant prove that cheques were
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 cheque
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
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6. What order ?
.. Accused is
convicted.
REASONS
Admitted/undisputed fact
9] Before going further it is necessary to mention
admitted/undisputed facts of this case.
Admittedly disputed cheques are drawn from the
account of accused and it bears his signature.
AS TO POINT NO. 1
10] 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.
 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.
11] 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.
12] 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.
13] In order to prove his case, complainant examined himself
(C.W.1) by filing his affidavit of examinationinchief at Exh. 16,
wherein he has reiterated his case from the complaint. His evidence
shows that, he had given loan of Rs. 7,50,000/ to the accused and in
order to repay said amount, disputed cheques for an amount of Rs.
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5,50,000/ were issued by the accused in his favour.
14] Ld. Advocate for accused has conducted crossexamination
of complainant at length, wherein it has come on record that, an
amount of RS. 2,50,000/ was given to accused through cheque while
remaining amount Rs. 5,00,000/ was given in cash. Said amount is
not shown by complainant in his I.T. returns. During cross
examination, accused has accepted receipt of Rs. 2,50,000/ from the
complainant, however he has denied acceptance of Rs 5,00,000/ from
the complainant through cheque. He has denied suggestions from the
accused that at the time of giving loan of Rs. 2,50,000/ to the accused,
he had accepted cheque for an amount of Rs. 3,00,000/ along with
interest. Complainant has admitted that accused has repaid an amount
of Rs. 1,00,000/ but according to him, it was not repaid against the
cheque amount but it was against the payment of entire loan of Rs.
7,50,000/. It was further suggested to the complainant that, after
receiving Rs. 1,00,000/ from the accused, he again demanded cheque
of Rs. 2,00,000/ from the accused against the security of remaining
loan of Rs. 1,50,000/ along with interest on it. However, same is
denied by the complainant.
15] From perusal of entire crossexamination of complainant
conducted on the part of accused it appears that, accused has admitted
acceptance of Rs. 2,50,000/ from the complainant. He has also
admitted issuance of one cheque for an amount of Rs. 3,00,000/ in
favour of complainant, however he has denied acceptance of Rs.
7,50,000/. Accused has not explained about the issuance of another
cheque for an amount of Rs. 2,50,000/ in favour of complainant. In
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fact, suggestion was given on the part of accused that after payment of
Rs. 1,00,000/, complainant demanded cheque of Rs. 2,00,000/ as a
security for balance loan of Rs. 1,50,000/. If complainant had
demanded cheque of Rs. 2,00,000/, then why cheque for an amount of
Rs. 2,50,000/ was issued by the accused. It is true that, accused has
sent reply to the demand notice stating therein that, disputed cheques
were issued for security purpose only and he has received loan of Rs.
2,50,000/ only from the complainant. However, accused did not
produce anything on record to support his contention. Admittedly,
complainant has not sent rejoinder to the demand notice, however
merely nonfiling of rejoinder denying the contents from reply notice is
not enough to say contention raised by the accused in reply notice are
true and correct. It was for the accused to lead evidence to prove those
contents. Accused has entered in the witness box and examined
himself. During crossexamination, he explained that first cheque of Rs.
3,00,000/ was issued as a security for loan of Rs. 2,50,000/ and after
payment of Rs. 1,00,000/ to the accused, there was an outstanding
amount against him was Rs. 2,00,000/ only and hence he issued
another cheque of Rs. 2,50,000/ for security of balance of amount of
Rs. 2,00,000/. Admittedly, earlier cheque for an amount of Rs.
3,00,000/ was lying with the complainant, then no prudent person
would issue another cheque for an amount of Rs. 2,50,000/ without
getting back earlier cheque. Therefore, defence raised by the accused is
not seems to be probable and acceptable. Accused has failed to show
that disputed cheques were issued by him in favour of complainant for
security purpose only.
16] Accused in his written notes of argument has referred
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judgment of Hon'ble Bombay High Court from the case of Vasudev
Ahuja V/s. Vilas Kamble, 2006, ALL M.R. (CRI) 3203 to say that said
amount was not shown by the complainant in income tax return and
hence complaint is liable to be dismissed. He also referred judgment of
Hon'ble Bombay High Court from the case of Vinay Parulekar V/s.
Pramod Meshram, 2008 CriLJ 2405 to say that when such huge
amount is given by way of loan, burden is on complainant to prove such
transaction.
17] In the case at hand, accused had admitted transaction with
complainant but just disputed about the amount. There is nothing to
show that said amount was given on interest basis and hence provision
of money lending acts are not applicable to this proceeding. So far as
nonshowing of said amount in the I.T. return is concerned, Hon'ble
Bombay Court in the case of Krishna P. Morajkar V/s. Joe Ferrao
(Goa Bench) wherein Hon'ble Bombay High Court has observed as
under:
“37. Ld. Counsel for the defendants could not show any statutory
provision under Income Tax Act 1961 or any other law which stipulates
that a loan transaction not recorded in the Incometax return or a loan
transaction which is in violation of Section 69A, 69B or Section 269SS of
the Income Tax Act would be void.
38. I accordingly hold that the suit is not barred under Sections 69A, 69
B or Sections 269SS of the Income Tax Act.”
18] Thus from perusal of entire evidence on record and from
oral and written argument of both parties, it appears that, accused has
failed to rebut the presumption u/s.139 of N.I. Act. It has proved
through the oral and documentary evidence produced by the
complainant that disputed cheques were issued by the accused in favour
of complainant for repayment of loan amount i.e. for discharging legally
enforceable liability. In result, I answered to the point no. 1 is
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affirmative.
AS TO POINT NO. 2 TO 5
19] In order to prove that, cheques were dishonoured,
complainant has produced on record cheque returned memo at Exh. 26
and Exh. 27. Said memos bear seal of the bank and signature of bank
officer, which shows that cheques were dishonoured vide memo dated
01/03/2018 and 16/03/2018. As both memos bears seal of the bank,
as per Section 146 of N.I. Act it is to be presumed that, cheques were
dishonoured for the reasons “Funds Insufficient” in the account of
drawer has mentioned in these memos. Accused has failed to rebut
presumption U/s. 146 of N.I. Act.
20] It is a matter of record that, demand notice was sent on
23/03/2018. Complainant has produced on record postal receipt. It
shows that, notice was sent on 23/03/2018. In statement recorded U/s.
313 of Cr.P.C. accused has admitted receipt of demand notice and
according to him he had sent reply to it. Admittedly, reply sent by the
accused is also produced on record at Exh. 30. Thus, it becomes clear
that demand notice was duly served upon the accused. It is a admitted
fact that, after service of notice or till today accused has not paid
cheque amount to the complainant as demanded in the notice. In result
point nos. 2 to 5 are answered in the affirmative.
AS TO POINT NO.6
21] 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 : 15/06/2023 Metropolitan Magistrate,
48th Court, Andheri, Mumbai.
Hearing on the point of sentence:
22] 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 his stand on the nature and quantum of the sentence, if any.
23] Upon asking on the point of sentence, accused submitted
that I had obtained loan from accused for short period and had he given
sufficient time to me I would have been paid said amount. Balance
amount against me was Rs. 1,50,000/ only and I am ready to pay it.
Hence prayed for leniency. On the other hand, Ld. Advocate for
complainant, prayed for maximum punishment as per law and
compensation with interest.
24] Heard both parties and their Ld. Advocates at length on the
point of sentence. 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
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ends of justice. In result, I proceed to pass following order :
ORDER
i. The accused Mr. Bipin Damji Shah 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 Six months and to pay compensation of Rs. 6,00,000/ (Rs.
Six Lacs) 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 further simple imprisonment for the period of 15
days.
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. 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.
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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. 15/06/2023 Metropolitan Magistrate
48th Court, Andheri, Mumbai.
Dictated On : 15/06/2023
Typed On : 15/06/2023
Signed On : 15/06/2023
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