Final Order 1

Order Details: Copy  of Judgment
Pdf Text: 1/14 C. C. No. 2205/SS/2018
Filed on : 21/05/2018
Registered on : 21/05/2018
Decided on : 08/06/2022
Duration : 04Y. 00M. 18D.
IN THE COURT OF METROPOLITAN MAGISTRATE
48TH COURT ANDHERI MUMBAI
(Presided over by K. G. Sawant)
Case No. 2205/SS/2018
CNR: : MHMM190056002018
Exh. No.
Mrs. Gurmesh Kaur.
Through her Constituted Attorney
Mrs. Jasveen Kapoor
residing at 103, Sea Bird, JuhuVersova Link Road,
Andheri (W), Mumbai – 400053. ...Complainant
V/s.
Mr. Joseph George.
Residing at B20,
Indra Darshan Apartments,
Four Bungalows,
Andheri (W), Mumbai – 400053. ...Accused
Offence punishable U/s. 138 of
Negotiable Instruments Act
Advocate Shri. Ramdas Chavan for the complainant.
Advocate Shri. Bhagwan Mishra for the accused.
JUDGMENT	JUDGMENT
(Delivered on 08/06/2022)
Accused is mired in the trial, for having committed an
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offence punishable U/s. 138 of the Negotiable Instruments Act, 1881.
(Hereinafter it is referred as 'N.I.Act' in short.)
Case of the complainant in nutshell is as under :
2] This complaint is filed by complainant through her power of
attorney holder Mrs. Jasveen Kapoor. It is the case of complainant that,
complainant and accused are well acquainted with each other and they
are staying in the same locality. Accused was facing the financial
problem and therefore in the year 2012 he approached to complainant
requesting for friendly loan of Rs. 7,00,000/ for expansion of his
business at Cochin (Kerala) in partnership with his friend. Considering
need of accused complainant lent an amount of Rs. 7,00,000/ to the
accused through two different cheques for an amount of Rs. 5,00,000/
and 2,00,000/ dated 15/05/2012. Accused had promised to return the
said amount within period of 21 months i.e. before 15/02/2014.
Accused had issued post dated cheques for an amount of Rs. 7,00,000/
in favour of complainant and he also given a undertaking signed by his
mother, he himself and witnesses. However, thereafter accused asked
complainant to not to deposit these cheques for clearance for the reason
that he is not in a position to repay this amount and saying so he issued
fresh cheques for an amount of Rs. 7,00,000/ in favour of complainant
dated 20/02/2015. In the same manner, he replaced the cheques again
on 23 occasions and finally issued two cheques bearing no. 108643 and
108644 for an amount of Rs. 5,00,000/ and 2,00,000/ respectively
dated 30/03/2018 drawn from his account maintained with Dena Bank,
Manish Nagar, Mumbai.
3] It is further case of complainant that, as per instruction of
accused she presented said cheques for clearance on 03/04/2018 with
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her banker namely State Bank of India, Versova Branch, Andheri (W) ,
Mumbai. However, said cheques returned unpaid vide returned memo
dated 04/04/2018 for reason “Funds Insufficient”.
4] Thereafter, complainant issued legal demand notice to the
accused dated 17/04/2018, calling upon accused to pay cheque amount
within 15 days from the date of service of notice on him. The said
notice was duly served upon accused. Inspite of service of notice
accused did not pay cheque amount to complainant but he sent reply
dated 01/05/2018 which was received by the complainant on
02/05/2018. As due amount is not arranged, complainant left with no
other option, than to knock the doors of the court seeking justice and
ipso Jure case came before this court.
5] The cognizance of offence u/s. 138 of Negotiable Instrument Act
was taken and accused was summoned. Post issuance of process,
presence of accused was secured before the court and he was submitted
to bail. Substance of accusation was read over to accused, to which he
pleaded not guilty and opt for trial. Considering nature of offence, this
case is a tried as a summons trial case.
6] In order to prove guilt of accused, complainant examined her
power of attorney holder namely Mrs. Jasveen Kapoor by filing her
affidavit in lieu of examinationinchief at Exh. 17 as per section 145 of
the Negotiable Instrument Act. Besides oral evidence, complainant has
relied upon following documentary evidence that includes:
Sr. No. Description of documents Exh. No.
1. Original disputed cheques Exh. 21 and 22
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2. Cheque returned memos Exh. 23 and 24
3. Office copy of demand notice Exh. 25
4. Receipt issued by courier service Exh. 26
5. Reply sent by accused Exh. 27
6. Power of attorney given by
complainant
Exh. 28
7] After closer of complainant's evidence, statement of accused vide
section 313 of Cr.P.C. was recorded vide Exh. 60, wherein accused has
taken defence of falsely implication. In support of his defence accused
has filed on record documentary evidence that includes various receipts
issued by the complainant acknowledging receipt of interest from the
accused and various promissory notes as well as earlier cheques issued
for security purpose.
8] Heard Ld. Advocate for both parties at length. Perused written
notes of argument filed on behalf of complainant at Exh. 62 and written
notes of argument filed on behalf of accused at Exh. 63.
9] 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
Negative
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2. Does complainant prove that cheques were
returned unpaid for reason “Funds
Insufficient?
…. In the
affirmative
3. Does complainant further prove that she 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
6. What order ?
…. Accused is
acquitted
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
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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
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
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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;
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
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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
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
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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.
14] In order to prove her case, complainant has examined her power
of attorney holder namely Jasveen Kapoor by filing her affidavit of
examinationinchief at Exh 17, wherein she has reiterated her case
from the complaint. Her evidence shows that she had given fianancial
assistance of Rs. 7,00,000/ to the accused and for repayment of said
amount disputed cheques were issued by the accused.
15] Ld. Advocate for accused took crossexamination of said witness
at considerable length and during crossexamination referred some
documents. From the perusal of crossexamination, written notes of
argument filed by Ld. Advocate for accused, it appears that it is the
main defence of accused that transaction between complainant and
accused is a illegal money lending transaction. Ld. Advocate for
accused has argued that complainant was not having valid money
lending license and still she had given amount to the accused on
interest basis. In order to prove his contention, he has relied upon
admissions given by the power of attorney holder of t he complainant in
her crossexamination.
16] In crossexamination complainant has admitted that she as well
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as her family members have received amount from the accused against
the interest and issued receipts to that effect in favour of accused.
Those 46 receipts are filed on record along with list of document at Exh.
34. On these receipts complainants have acknowledged receipt of
interest to the extent of Rs. 8000/ and Rs. 9333/ per month. It
appears that for each month three separate receipts were issued. First
receipt is for Rs. 13500/ issued by Sandip Kapoor, second receipt is
issued by Gurmesh Kaur for an amount of Rs. 9333/ and PoA holder
Jasveen Kapoor has issued receipt for an amount of Rs. 8000/ for the
month of December 2013. In the same manner and approximately for
same amount, various receipts have been issued by the complainant and
other family members in favour of accused from 2012 to 2016. It
appears that for every year, different promissory note were also
executed by the accused in favour of complainant. In cross
examination, complainant has clearly admitted that, she had accepted
interest from the accused and issued a receipt to that effect to the
accused. She stated that since they had given amount to the accused,
accused had paid interest on it. Further she admitted that she is not
having any money lending license .
17] Thus, from admissions given by the complainant and case put by
the accused through crossexamination, it appears that admittedly
complainant had advanced loan of Rs. 7,00,000/ to the accused and
against that accused had given interest to the complainant for each
month. So, it becomes clear that, loan was advanced by the
complainant to the accused on interest basis though she was not having
valid money lending license to that effect. According to advocate for
accused, amount given on interest basis without having money lending
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license is not legally recoverable debt and therefore cheque issued for
payment of such amount cannot be said to have been issued for
discharging legal enforceable liability. In support of his argument he
relied upon judgment passed by Hon'ble Bombay High Court in the case
of Anil Baburao Kataria V/s. Purshottam Prabhakar Kavane, 2010
Cri. LJ 1217 wherein in para no. 9 and 10, Hon'ble High Court has
observed as under :
“09. Here, I may refer to the provisions of the Bombay MoneyLenders
Act, 1946. Section 5 of the said Act lays down that no money lender
shall carry on business of money lending except in the area for which he
has been granted a license and except in accordance with the terms and
conditions of such license. It is not the case of present applicant
complainant that he has any money lending license. Section 10 of the
Act lays down that no court shall pass a decree in favour of a money
lender in any suit to which said Act applies unless the court is satisfied
that at the time when the loan or any part thereof, to which the suit
relates was advanced, the moneylender held a valid license, and if the
court is satisfied that the moneylender did not hold a valid license, it
shall dismiss the suit. In other words, carrying on money lending
business without license debars a person from doing money lending and
recovering the amount through court. As per explanation to Section
138 of the Negotiable Instruments Act "debt or other liability"means a
legally enforceable debt or other liability. So, a loan advanced by a
money lender who is doing business of money lending without license is
not a debt or other liability and provisions of Section 138 of the Act
will not apply to such transaction. In the light of above, it cannot be said
that in the present case, that the cheque issued by the Respondent in
favour of the applicant was for the liability enforceable in law.
10. I may also refer to Section 32B(b) of the said Act,which lays down
that whoever carries on the business of moneylending at any place
without holding a valid license authorizing him to carry on such business
at such place, shall, on conviction, be punished for the first offence with
imprisonment of either description which may extend to one year or with
fine which may extend to rupees one thousand and five hundred or with
both and for the second or subsequent offence, in addition to, or in lieu
of, the penalty specified in clause (i) with imprisonment which shall not
be less than two years, where such person is not a company, and with
fine which shall not be less than rupees five thousand, where such person
is a company. ”
Thus in the above judgment Hon'ble Bombay High Court has clearly
held that loan advanced by money lender, who is engaged in the
business of money lending without having valid money lending license
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is not debt or other liability and provisions of section 138 of the act will
not apply to such transaction. Admittedly, in the case at hand accused
was neither any financial institutions or bank or any other institutions
having right to accept deposits from the public at large on interest basis.
In the case at hand complainant is accepting the interest from accused
continuously for the period of more than 4 to 5 years on monthly basis
and issued receipts to that effect. She has also accepted cheque from
the accused in advanced and also got executed undertaking from him
which clearly shows that, complainant was doing business of money
lending. If there was single incident of money lending, then it can be
neglected and cannot be termed as a business, but in the case at hand
she was accepting the interest from accused by issuing receipts on
regularly basis like a business. She also got executed documents from
him. All these things shows that, she was engaged in the business of
money lending without having any valid license to do the said business.
Therefore, cheque issued by the accused in favour of complainant was
not for the legal recoverable amount, but it was for the payment of
illegal transaction. Therefore, point no. 1 is answered in the negative.
AS TO POINT NO. 2 TO 5
18] In order to prove that cheque was returned unpaid for
reason “Funds Insufficient”, complainant has relied upon his own oral
evidence in addition to documentary evidence that includes cheque
return memo filed on record. Said memo clearly shows that cheque was
returned unpaid for a reason “Funds Insufficient”. Said memo bears
seal of the bank and signature of bank officer.
19] 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,
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presume the fact of dishonor of such cheque, unless and until such fact
is disproved. Accused has not adduced any evidence to prove that said
cheque was not dishonored as mentioned in memo. Therefore, from
oral and documentary evidence on record, it remains proved that
disputed cheques were dishonoured for reason mentioned in memos.
20] In order to show that statutory demand notice was issued to
accused within statutory period, complainant has filed on record office
copy of notice, postal receipt, reply sent by accused etc. Accused has
not denied service of notice on him. In fact, he has sent reply to the
notice of complainant. It appears that cheque were dishonoured on
04/04/2018, notice was sent on 17/04/2018. Complaint is filed on
21/05/2018. Thus, all these things shows that demand notice was sent
within statutory period as well as complaint was also filed within period
of limitation. Admittedly, accused has not paid cheque amount to the
complainant. 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, though complainant has proved that disputed
cheques were issued from the account of accused but she failed to prove
that, it was issued for discharging any legal enforceable liability.
Therefore, on that count accused is entitled for acquittal. In result I
proceed to pass following order :
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ORDER
1] The accused Mr. Joseph George is hereby acquitted vide
Section 255(1) of Criminal Procedure code for an offence
punishable under Section 138 of the Negotiable Instruments Act.
2] Bail bond of accused stands cancelled.
3] Accused shall execute P.R. Bond of Rs. 15,000/ ,to appear
before the Higher Court as and when such court issues notice in
respect of any appeal or petition filed against this judgment, vide
section 437 (A) of the Code of Criminal Procedure. Said bail
bonds shall be in force for Six Months.
(Judgment is dictated and pronounced in open court.)
Mumbai (K. G. Sawant)
Dt.08/06/2022 Metropolitan Magistrate
48th Court, Andheri, Mumbai.
Dictated On : 08/06/2022
Typed On : 08/06/2022
Signed On : 08/06/2022
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