Final Order 1

Order Details: Copy  of Judgment
Pdf Text: 1/14 C. C. No. 2211/SS/2018
Filed on : 22/05/2018
Registered on : 22/05/2018
Decided on : 08/06/2022
Duration : 04Y. 00M. 17D.
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. 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
offence punishable U/s. 138 of the Negotiable Instruments Act, 1881.
(Hereinafter it is referred as 'N.I.Act' in short.)
-- 1 of 14 --
2/14 C. C. No. 2211/SS/2018
Case of the complainant in nutshell is as under :
2] 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. 8,00,000/ for expansion of his business at Cochin (Kerala) in
partnership with his friend. Considering need of accused, complainant
lent an amount of Rs. 8,00,000/ to the accused by way of cash.
Accused had promised to return the said amount shortly. In order to
repay this amount, accused had issued post dated cheques for an
amount of Rs. 3,00,000/ and 5,00,000/ dated 20/10/2013 and
15/02/2014 in favour of complainant. 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. 8,00,000/ 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 dated
20/03/2016 for an amount of Rs. 3,00,000/ and 5,00,000/, however
same were dishonoured for a reason “Account Closed” vide memo dated
23/03/2016. Thereafter, again accused issued two cheques bearing
no. 080842 and 080843 dated 20/03/2017 for an amount of Rs.
5,00,000/ and Rs. 3,00,000/ respectively drawn from his account
maintained with Dena Bank, Manish Nagar, Mumbai. This time also on
request of accused, these cheques were not presented for clearance and
finally accused issued two more cheques bearing no. 108645 and
108646 dated 30/03/2018 for an amount of Rs. 3,00,000/ and
5,00,000/ drawn from his account maintained with Dena Bank.
-- 2 of 14 --
3/14 C. C. No. 2211/SS/2018
3] It is further case of complainant that, as per instruction of
accused she presented said cheques for clearance on 03/04/2018 with
her banker namely HDFC Bank, Juhu Versova Link Road 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 18/04/2018, 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 on 27/04/2018. 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 herself
by filing her affidavit in lieu of examinationinchief at Exh. 15A as per
section 145 of the Negotiable Instrument Act. Besides oral evidence,
complainant has relied upon following documentary evidence that
includes:
-- 3 of 14 --
4/14 C. C. No. 2211/SS/2018
Sr. No. Description of documents Exh. No.
1. Original disputed cheques Exh. 18 and 19
2. 2 Cheques returned memos Exh. 20 and 21
3. Office copy of demand notice Exh. 22
4. Reply sent by accused Exh. 23
5. Envelope of reply Exh. 24
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. It is necessary to note here t hat, complainant has
filed her say and admitted all the documents filed by the accused.
8] Heard Ld. Advocate for both parties at length. Perused written
notes of argument filed on behalf of complainant at Exh. 88 and written
notes of argument filed on behalf of accused at Exh. 89.
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
cheques were issued by the accused, in
…. In the
Negative
-- 4 of 14 --
5/14 C. C. No. 2211/SS/2018
favour of complainant for discharging legal
enforceable liability?
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
-- 5 of 14 --
6/14 C. C. No. 2211/SS/2018
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
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
-- 6 of 14 --
7/14 C. C. No. 2211/SS/2018
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;
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.
-- 7 of 14 --
8/14 C. C. No. 2211/SS/2018
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
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
-- 8 of 14 --
9/14 C. C. No. 2211/SS/2018
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.
14] In order to prove her case, complainant has examined herself by
filing her affidavit of examinationinchief at Exh 15A, wherein she has
reiterated her case from the complaint. Her evidence shows that she
had given financial assistance of Rs. 8,00,000/ 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. It is further argument of complainant that, accused has
not shown her income source. She had advanced loan to the accused in
cash and said entire loan amount is unaccounted cash. In order to
-- 9 of 14 --
10/14 C. C. No. 2211/SS/2018
prove his contention, he has relied upon admissions given by
complainant in her crossexamination.
16] In crossexamination complainant has admitted that, she has
received amount from the accused against the interest and issued
receipts to that effect in favour of accused. Those receipts and
promissory notes are filed on record at Exh. 25 to 80. On these receipts
complainant has acknowledged receipt of interest from the accused 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
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. So also she has admitted all the documents filed by the
accused on record. 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. 8,00,000/ 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
-- 10 of 14 --
11/14 C. C. No. 2211/SS/2018
complainant to the accused on interest basis though she was not having
valid money lending license to that effect. According to Ld. advocate
for accused, amount given on interest basis, without having money
lending 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
-- 11 of 14 --
12/14 C. C. No. 2211/SS/2018
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
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.
-- 12 of 14 --
13/14 C. C. No. 2211/SS/2018
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,
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 18/04/2018. Complaint is filed on
22/05/2018. 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 :
-- 13 of 14 --
14/14 C. C. No. 2211/SS/2018
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
-- 14 of 14 --