Final Order 1

Order Details: Copy  of Judgment
Pdf Text: 1 C. C. No. 1753/SS/2018
Filed on : 11/04/2018
Registered on : 11/04/2018
Decided on : 03/01/2024
Duration : 05Y. 08M. 22D.
IN THE COURT OF METROPOLITAN MAGISTRATE
48TH COURT ANDHERI MUMBAI
(Presided over by K. G. Sawant)
Case No. 1753/SS/2018
CNR: MHMM190115072018
Exh. No.
Petronas Lubricants (India) Pvt. Ltd.
(formerly known as Petronas Marketing (India)
Pvt. Ltd.). A Private Limited Company, duly
incorporated under the companies Act
and having their registered office
earlier at 349, business point, 204205,
Western Express Highway, Andheri (E),
Mumbai 400 069 and Now at Unit No. 603,
“C” wing, Corporate Avenue,
Opp. Solitaire Corporate Park, Chakala, Andheri
(E), Mumbai 400 093, through its authorized
officer Mr. Arvind Narayan Shingal Age, 39 years, …Complainant
Versus
1. M/s. Ajay Oil Agency,
A partnership firm, carrying on business at :
(I) Near Old Bus Stand, Lalji Mandir Road,
Mangrol 362225 Gujrat
(ii) Society Area, Sari No. 4,
NawagamRajkot 360001 Gujrat
2. Mr. Paresh M. Vithlani,
Partner of M/s. Ajay Oil Agency,
A partnership firm, carrying on business at :
-- 1 of 17 --
2 C. C. No. 1753/SS/2018
(I) Near Old Bus Stand, Lalji Mandir Road,
Mangrol 362225 Gujrat
(ii) Society Area, Sari No. 4,
NawagamRajkot 360001 Gujrat ...Accused
Offence punishable U/s. 138 of
Negotiable Instruments Act
Advocate Mr. M.S. Dhavale for the complainant
Advocate Mr. R. P. Mishra for accused.
JUDGMENT	JUDGMENT
(Delivered on 03/01/2024)
Accused are 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 Private Limited company, filed this complaint
through its authorized representative namely Arvind Narayan Shingal.
Complainant is engaged in the business of Lubricating oil goods. It is
the case of complainant that, accused no. 1 is a partnership firm of
which accused no. 2 is the partner and he is responsible for business of
accused no. 1. As per order placed by accused from time to time, the
complainant had sold and supplied lubricating oil goods to the accused
to various invoices. Accordingly, in order to discharge his liability,
accused issued cheque bearing no. 902380 dated 05/02/2018 for an
amount of Rs. 17,77,303/ drawn on Bank of India, Mangrol branch,
Dist.: Junagadh, which was duly signed by accused no. 2.
-- 2 of 17 --
3 C. C. No. 1753/SS/2018
3] As per instruction of accused, said cheque was presented for
clearance by the complainant with its banker namely HDFC Bank, Vile
Parle (E), Mumbai. However, vide memo dated 13/02/2018, said
cheque returned unpaid with remark “Account closed”.
4] After dishonoure of cheque, complainant issued statutory demand
notice to the accused on 27/02/2018 through RPAD, calling upon them
to pay the cheque amount, within stipulated time. Notice was duly
served upon accused but accused failed to make the payment. 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
11/04/2018.
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
authorized person Mr. Arvind Shingal (C.W. 1) by filing his affidavit in
lieu of examinationinchief at Exh. 15, 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.
Certified copy of resolution Exh. 20
Letter of authority Exh. 21
7 Tax invoices Exh. 22 to 28
6 Transport receipts Exh. 29 to 34
-- 3 of 17 --
4 C. C. No. 1753/SS/2018
Ledger account along with certificate under
section 65(b) of Evidence Act
Exh. 35
Certificate issued by C.A. Exh. 36
Original disputed cheque Exh. 37
Cheque returned memo Exh. 38
Office copy of demand notice Exh. 39
Postal receipts Exh. 40 to 43
A.D. cards Exh.44 to 47
Reply from accused Exh. 48
Rejoinder to reply Exh. 49
Postal receipt and AD card Exh. 50 and 51
7] After completion of complainant's evidence, statement of accused
vide Section 313 of Cr.P.C. was recorded at Exh. 65, wherein accused
has taken defence of falsely implication. Accused in support of his
defence neither examined himself nor any witness.
8] Complainant and accused have filed their written notes of
argument and also argued orally.
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:
-- 4 of 17 --
5 C. C. No. 1753/SS/2018
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 “Account closed
”?
….
In the
Affirmative
3. Does complainant further prove that
complainant company 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 are
Convicted
REASONS
Admitted/undisputed fact
10] Before going further it is necessary to mention
admitted/undisputed facts of this case.
-- 5 of 17 --
6 C. C. No. 1753/SS/2018
Admittedly disputed cheque has drawn from the
account of accused No. 1 and it bears signature of
accused no. 2 as a partner of accused no.1.
AS TO POINT NO. 1
11] 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
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.
-- 6 of 17 --
7 C. C. No. 1753/SS/2018
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;
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
-- 7 of 17 --
8 C. C. No. 1753/SS/2018
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
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,
-- 8 of 17 --
9 C. C. No. 1753/SS/2018
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.
14] In order to prove their case, complainant examined its
representative Arvind Shingal (C.W.1) by filing his affidavit of
examinationinchief at Exh. 15, wherein he has reiterated his case from
the complaint. His evidence shows that, under various invoices
complainant company has provided lubricating oil goods to the accused.
His evidence further shows that in order to discharge said liability,
disputed cheque was issued by the accused. He has produced on
record documentary evidence i.e. tax invoice, Lorry receipts etc. to
show that goods were sold out to the accused and same were delivered
to him.
15] Ld. Advocate for accused conducted crossexamination of
complainant at length. Through crossexamination, accused has taken a
defence that, no purchase order was placed by the accused with the
-- 9 of 17 --
10 C. C. No. 1753/SS/2018
complainant. It is also defence of accused that in between 20152018,
accused has made many payments through the RTGS and NEFT to the
complainant. It is also defence of accused that, complainant company
was liable to pay some incentives to the accused and avoid payment
against incentives, they presented cheques for clearance, which were
given for security purpose only. According to accused, said cheque was
issued in the year 2015 by way of security only. Thus, accused has
taken a defence that, he was not liable to pay cheque amount to the
complainant company.
16] As discussed earlier, complainant has produced on record tax
invoices at Exh. 22 to 28, out of which invoices at Exh. 22 to 24 bears
seal of the accused company. Lorry receipt filed at Exh. 29 and 30
bears seal of the accused company. Accused has not explained as to
how seal of accused no. 1, came on these documents. Accused has not
denied transaction with the complainant, but what his case is that, he
has made payment to the complainant. If it is the case of accused that,
he has paid most of the amount, in that case, it was for the accused to
show that, payment was made by him and thus, cheque amount was not
outstanding against the accused. However, accused neither entered in
the witness box nor produced any documentary evidence on record to
show that payment was made by him and thus either there was no any
outstanding amount against him or at least cheque amount was not
outstanding. In short, accused did not bring any material to rebut
presumption u/s. 139 of N.I.Act.
17] In the written notes of argument, accused has a taken defence
that, complainant has not proved authorization given to Mr. Shinghal to
file this complaint and lead evidence. From perusal of cross
-- 10 of 17 --
11 C. C. No. 1753/SS/2018
examination of complainant it appears that, accused has not put any
question on the point of authorization of Mr. Shinghal. In fact, he has
not denied, authority of Mr. Shinghal to file this complaint and lead
evidence. According to accused, resolution at Exh. 20 is not duly
proved. It is necessary to note here that, in crossexamination accused
has not challenged the resolution or letter of authority filed at Exh. 21,
therefore it cannot be said that, authorization of complainant is not
duly proved. Hence, argument on that point raised by Ld. Advocate for
accused is not acceptable. In support of his argument, Ld. Advocate for
accused has relied upon judgment passed by Hon'ble Bombay High
Court in the case of Ashish Shah V/s. M/s. Sheth Developers Pvt. Ltd.
Wherein in para no. 15, Hon'ble Bombay High Court has observed as
under:
“15. Next comes the document No.1 the certified true copy of the
resolution dated 16.2.2009, whereby the complainant company had
allegedly resolved to give consent of the Board of Directors to execute
power of attorney in favour of Ashwin Sheth, Managing Director
and/or Sharad Doshi, Executive Assistant to the Managing Director to
institute or defend any suit or criminal proceedings. The learned trial
Court observed in the impugned order that there is no clearcut
provision about issuance of certified copy of extract of minutes book
but if subsec. (2) of Section 196 of the Companies Act is read, it may
be stated that certified copy of the minutes can be given. The learned
trial Court observed that the witness Sharad Doshi in his affidavit had
deposed about the said document and thereby he has proved the
genuineness of the document. Under Section 195 of the Companies Act,
where minutes of the proceedings of any general meeting of the
company have been kept in accordance with the 17 WP4011.sxw
provisions of section 193, then, until the contrary is proved, the
meeting shall be deemed to have been duly called and held, and all
proceedings thereat to have duly taken place. Section 194 of the
Companies Act provides that the minutes of meetings kept in
accordance with the provisions of section 193 shall be evidence of the
proceedings recorded therein. However, no provision in the Companies
Act is brought to my notice which provides that the certified copy or
extract of the minutes would be admissible in evidence without proof of
the original. Section 65(f) of the Evidence Act provides that secondary
evidence may be given of the existence, condition and contents of the
document when the original is the document of which a certified copy
is permitted by the Evidence Act or by any other law in force in India to
-- 11 of 17 --
12 C. C. No. 1753/SS/2018
be given in evidence. As no provision from the Companies Act is
brought to my notice under which the certified copy of the minutes of
the meetings of the board of directors is admissible in evidence without
proof of the original, it must be said that the copy of the minutes
cannot be admitted in evidence directly unless the original is proved or
the copy is admitted by opposite party. Therefore, even though that
document is given exhibit number, it cannot be treated to have been
proved, unless the complainant leads appropriate evidence to prove the
minutes.”
18] On the same point, Ld. Advocate for accused has also relied upon
judgment passed by Hon'ble Bombay High Court in the case of Candy
Spirit Pvt. Ltd. V/s. Reeves Mia 2012, ALL M.R. (Cri) 403 wherein
in para no .14 Hon'ble High Court has observed as under :
“14. The complainant was the payee in this case and was juristic person. It
had passed no resolution in favour of the said Shri Gomes either to file the
complaint or to depose in favour of the complainant. The case being
criminal in nature it was for the said Shri Gomes to prove that he had
authority from the company either to file the complaint or to depose in
support of the complainant. The accused has a profound right to remain
silent in a criminal trial and that fundamental principle need be followed
even in cases under Section 138 of the Negotiable Instruments Act. The
accused had clearly suggested to the complainant that he had no right to
file the complaint. At least at that stage the said Shri Viegas ought to have
made an effort to produce a resolution, if there was one, or get the acts
done by him ratified by a resolution of the company. That he accepted two
payments made by the accused on behalf of the company would not cure
the fundamental defect of there being no resolution authorising him to file
a complaint or depose in support of the complaint. In the absence of any
resolution by the complainant company in favour of Shri Viegas either to
file a complaint and/or depose on behalf of the complainant, the accused
could not have been convicted. Shri Viegas who claimed that he was the
authorised representative was expected to produce such authority and the
Court was not expected to believe him, in the absence of such
authorisation, even if the accused had not contested his statement. ”
19] He also relied upon, judgment passed by Hon'ble Supreme Court
in the case of A.C. Narayanan V/s. State of Maharashtra 2013 ,ALL
M.R. (Cri.)4048 (S.C.) wherein in para No. 25 has observed as under:
“Similar substantial questions were raised in the appeal arising out of
S.L.P (Crl.) No. 2724 of 2008, which stand answered as above. Apart
from the above questions, one distinct query was raised as to whether a
person authorized by a Company or Statute or Institution can delegate
powers to their subordinate/others for filing a criminal complaint? The
-- 12 of 17 --
13 C. C. No. 1753/SS/2018
issue raised is in reference to validity of subdelegation of functions of the
power of attorney. We have already clarified to the extent that the
attorney holder can sign and file a complaint on behalf of the
complainantpayee. However, whether the power of attorney holder will
have the power to further delegate the functions to another person will
completely depend on the terms of the general power of attorney. As a
result, the authority to sub delegate the functions must be explicitly
mentioned in the general power of attorney. Otherwise, the sub
delegation will be inconsistent with the general power of attorney and
thereby will be invalid in law. Nevertheless, the general power of attorney
itself can be canceled and be given to another person.”
20] In the case at hand, resolution produced on record by the
complainant has been verified from the original and endorsement to
that effect has been put by the J.C. of this court. Besides that, accused
never challenged said document or authorization of Mr. Shingal, during
crossexamination and hence it cannot be said that, there was no proper
authorization in favour of Mr. Shingal to file this complaint. In the case
at hand, there is no question of sub delegation of power on the basis of
power of attorney, since authorization has been given to Mr. Shingal on
the basis of resolution filed at Exh. 20, through which Mr. Anirwan Roy
CEO of the company was authorized to appoint any employee of the
company and accordingly through letter of authority he appointed Mr.
Shingal to represent the complainant company in the court. In such
circumstances, judgment relied upon by Ld. Advocate for accused, on
this point are not helpful to his case.
21] In view of above discussion, I came to the conclusion that,
accused has failed to rebut the presumption U/s. 139 of N.I. Act.
Accused has also failed to show that, disputed cheque was issued for
security purpose only and in fact he was not liable to pay any amount to
the complainant company. Accused has failed to prove that, he has
already repaid entire amount to the complainant company against the
-- 13 of 17 --
14 C. C. No. 1753/SS/2018
purchase of goods. Thus, it remains proved that, disputed cheque has
been issued by the accused in favour of complainant for discharging
legally enforceable liability. In result point no. 1 has answered in the
affirmative.
AS TO POINT NO. 2 TO 5
22] In order to prove that, cheque was returned unpaid,
complainant has produced on record cheque returned memo at Exh. 38.
said memo bears seal of the bank and signature of bank officer. As per
said memo, cheque was returned unpaid for a reason “Account
blocked”. Therefore, in view of Section 146 of N.I. Act, it is to be
presumed that, cheque was dishonoured vide memo dated 13/02/2018
for a reason “Account blocked”.
23] It is a matter of record that, complainant has sent notice to the
accused on 27/02/2018 i.e. within limitation. Notice was served upon
accused and accused has sent reply to this notice on 09/03/2018.
Admittedly, accused has not paid cheque amount to complainant after
service of notice. Complainant has sent rejoinder to the reply notice
and filed this complaint on 11/04/2018 i.e. 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
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,
-- 14 of 17 --
15 C. C. No. 1753/SS/2018
1958. Therefore, the accused is called upon to state on the point of
sentence. Sd/
(K. G. Sawant)
Date : 03/01/2024 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, Ld. Advocate for
accused stated that, accused is not habitual offender and his business
has also closed. Hence prayed to take lenient view.
27] On the other hand, Ld. Advocate Mr. M. S. Dhavale for
complainant submitted that, more than 5 years has been passed and
hence prayed to impose a maximum punishment on the accused and
also prayed to award compensation to complainant.
28] Heard Ld. Advocate for both parties at length and perused the
case record, it appears that, there was business transaction between
complainant and accused since 2012. It appears that, earlier accused
has cleared all the payment and from reply also it appears that, there
were some issues regarding incentives. Therefore, this is not a fit case
to take a harsh view against the accused but he is entitled for leniency.
Considering nature of litigation, purpose of legislature behind
enactment of Section 138 of N.I. Act, conduct of the accused during
-- 15 of 17 --
16 C. C. No. 1753/SS/2018
trial and in view of above discussion, I am of the view that following
sentence would meet the ends of the justice. In result, I proceed to pass
following order:
ORDER
i. The accused No. 2 Mr. Paresh M. Vithlani, partner of accused no.
1 M/s. Ajay Oil Agency is hereby convicted for the offence punishable
under section 138 r/w. 141 of the Negotiable Instrument Act, 1881 vide
section 255(2) of the Code of Criminal Procedure, 1973.
ii. Accused No. 2 is sentenced to suffer simple imprisonment for
period of One month and accused no. 1 and 2 shall pay, jointly and
severally, compensation of Rs. 20,00,000/ (Rs. Twenty Lacs 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 No. 2 shall
suffer further simple imprisonment for the period of One week.
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 No. 2 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
-- 16 of 17 --
17 C. C. No. 1753/SS/2018
accused, immediately after it is prepared, in view of section 363(1) of
the Code of Criminal Procedure, 1973.
vii. Dictated and pronounced in open court.
Sd/
Mumbai (K. G. Sawant)
Dt. 03/01/2024 Metropolitan Magistrate
48th Court, Andheri, Mumbai.
Dictated On : 03/01/2024
Typed On : 03/01/2024
Signed On : 03/01/2024
-- 17 of 17 --