Final Order 1

Order Details: Copy  of Judgment
Pdf Text: 1
C. C. No. 4155/SS/2018
CNR No. : MHMM19-011607-2018
Received On : 12/10/2018
Registered On : 12/10/2018
Decided On : 10/01/2025
Duration :Y-06, M-02, D-28
IN THE COURT OF METROPOLITAN MAGISTRATE, ANDHERI (Court
No. 48), MUMBAI.
( Presided over by Y. P. Pujari )
C. C. No 4155/SS/2018
Exh. 102
Cona Industries Pvt. Ltd.
a Proprietary concerned
Through Power of Attorney Holder
Umesh Rajaram Bait, Age : 45 years,
Having address at – 302, Bhrahans Business Park,
Off Mahakali Caves Road, Andheri (East),
Mumbai – 400093. -- Complainant
Versus
1. R. K. Agencys.
Having address at : 5-1-216,
Yadav sangham Bhavan,
Jambhag, Hyderabad, Telangana – 500 095.
2. Harasan Singh
Proprietor of R. K. Agencys.
Having address at : 5-1-216.
Yadav Sangham Bhavan,
Jambhag, Hyderabad, Telangana – 500 095. -- Accused
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OFFENCE PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE
INSTRUMENTS ACT
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Appearance:- Adv. Mr. Ajay Vishwakarma/ Mr. Jitendra Yadav for the
complainant.
Adv. Mr. Santosh Yadav for the accused.
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JUDGMENT
(Delivered on 10th of January 2025)
The accused is facing trial for an offence punishable under
Section 138 of the Negotiable Instruments Act (Hereinafter referred as
“the Act” for short) for dishonor of a cheque for Rs. 8,34,196/-.
The brief facts of complainant's case are as under:
02. It is averred by the complainant that, complainant Cona
Industry is a proprietary concern. It is engaged in the business of
Manufacturing of Switches and other electrical goods. The accused No.
1 is a proprietary concern and accused no. 2 is a proprietor and
responsible for the day-to-day business affairs of the accused no. 1.
Accused is a dealer and approached to the complainant for purchase of
goods/material. As per the order of accused, the complainant has time
to time supplied the goods/material to the accused. The invoice was
raised by the complainant.
03. It is his further submission that, in discharge of outstanding
legal liability towards supply of goods/material, accused issued a
cheque bearing No. 088468 dated 29/08/2018 for Rs. 8,34,196/-
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drawn on Union Bank of India, Gowliguda, Hyderabad – 500 012 in
favour of complainant. Thereafter, the complainant deposited the above
said cheque for encashment in his HDFC Bank Ltd., Ahura Centre
Branch, Andheri (East), Mumbai. The same was returned unpaid from
drawee bank with endorsement 'Funds Insufficient'. Accordingly, the
HDFC Bank issued memo dated 31/08/2018. Thereafter, he contacted
the accused and requested to pay cheque amount but the accused
intentionally not paid said amount. Thereafter, he issued demand notice
dated 06/09/2018 to accused. The notice was duly served on the
accused but accused failed to pay cheque amount within stipulated
period. Hence, the complainant constrained to file present complaint.
04. After recording statement of the complainant and perusing
all documents produced on record, process came to be issued against
the accused for the above offence. In response to summons, the
accused appeared. Particulars of offence recorded below Exh. 17 which
were read over and explained to the accused in vernacular, to which he
pleaded not guilty and claimed to be tried.
05. Accused has conducted the cross-examination of the
complainant in which he has raised following defences:-
a) The witness has no personal knowledge about the case of
the transaction.
b) The complainant had not given intimation to the accused
before depositing of cheque for encashment.
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c) Cona Electricals has not given power to Cona
Industries to recover the earlier debt/outstanding
amount.
d) The blank signed cheque was given to Cona Electrical
for security.
e) Accused is not liable to pay cheque amount as he
paid all the due amount.
06. The complainant closed his evidence and matter was
posted for statement of accused U/s. 313 of Code of Criminal
Procedure. (Hereinafter referred as 'the Code' for short). The accused
was aware about the stage of matter. But in-spite of that, he could not
secure his presence for recording his statement. Admittedly, the scope of
Section 313 of the Code, is very wide. It is not a mere empty formality.
The object of recording of Section 313 of the Code, is to put all
incriminating evidence to the accused so as to provide him an
opportunity to explain such incriminating circumstances appearing
against his in the evidence of prosecution/complainant. However, in-
spite of giving ample opportunity, the accused himself has not availed
his right to explain the incriminating circumstances by remaining
present. As per direction of Hon'ble Apex Court given in case of
Indian
Bank Association and others V/s. Union of India and others (Writ
Petition (Civil) No. 18/2013 Decided on 21/04/2014), the matter is
required to be kept for defence evidence after plea of accused and the
Court must ensure that examination-in-chief, cross-examination and re-
examination of the complainant must be conducted within three months
of assigning the case. In such circumstance, if we keep this matter
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pending without progress and more particularly, when such
circumstances arose due to intentional act of accused, it will be against
the right of speedy trial of complainant. Ultimately it will defeat the
object of aforesaid directions of Hon'ble Apex Court regarding speedy
disposal of matter, which is filed for an offence punishable under
Section 138 of the Act. Further as per the decision of the Hon'ble
Bombay High Court in the case of Prakash Chimanlal Sheth V/s. T.
Ramalingam Nadar @ Ramalingam [decided in Criminal Application
No.490 of 2020 dated 14/09/2022] wherein in Para-35 the Hon'ble
High Court has observed as under :
35. Considering the fact that the proceedings under Section 138
of N.I. Act are required to be concluded expeditiously in the
light of guidelines issued by the Courts from time to time for
speedy disposal of the cases, the scope of Sections 141, 142, 143
and 145 of the N.I. Act, it was not necessary for the trial Court
to wait for Accused to make his appearance. The facts of the
present case denote that the Accused was exempted from
appearing and thereafter they continued to disappear from
appearing before the Court. Warrants were issued. The warrants
could not be executed. The Accused even failed to appear before
this Court. In this circumstance, the Court is empowered to
proceed with the case without recording the statement of the
Accused under Section 313 of Cr. P.C. The decision relied upon
by learned APP
Reena Hazarika V/s. State of Assam (supra)
relates to scope of Section 313 of the Code. It is observed that
the Section 313 of the Code confers valuable right upon accused
to establish his innocence. The mere use of word 'may' cannot be
held to confer a discretionary power on the Court to consider or
not to consider such defence, since it constitutes a valuable right
of an accused for access to justice. However, in the present case,
accused have not bothered to remain present before the Court.
The complainant is victim. He is running from pillar to post for
prosecuting the accused. This is a fit case to exercise discretion
and proceed with case by dispensing with statement under
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Section 313 of the Code. The accused has no regard for
directions of Court. The trial Court had already passed order of
no cross. Hence, the impugned order of trial Court is required to
be set aside with direction to dispense with statement of accused
under Section 313 of the Code and proceed with the case.
In the matter in hand, in-spite of giving ample opportunity, accused
himself has not availed his right to explain the incriminating
circumstance by remaining present in the present proceeding. Hence,
considering the nature of matter and object of aforesaid guidelines, this
Court has dispensed with the statement of accused of Section 313 of
Code by passing order below Exh. 01 on 31/01/2024.
07. Heard Ld. Advocate Mr. Ajay Vishwakarma for complainant
and also perused and considered the written notes of argument filed by
complainant at Exh. 100. Ample opportunities were given to the
accused, but none appeared to argue on behalf of accused.
08. From perusal of complaint and record, following points
arise for my determination. I have recorded my finding and reasons
thereon as under:
Sr. No. Points Findings.
1. Does the complainant prove that cheque No.
088468 (Exh. 65) was drawn by accused for
legally recoverable debt or other liability?
Yes.
2.
Does the complainant prove that the said
cheque returned unpaid for the reason “Funds
Insufficient”?
Yes.
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3.
Does the complainant prove that he had issued
demand notice to the accused within
limitation demanding cheque amount?
Yes.
4.
Does complainant prove that the accused
failed to pay cheque amount to complainant
within statutory limit?
Yes.
5.
Whether the accused has committed an
offence punishable under Section 138 of the
Negotiable Instruments Act ?
Yes.
6. What order? The accused
is convicted.
9. In order to prove the case, the authorized representative of
complainant has filed his evidence affidavit as (C.W.1) at Exh. 20. He
also placed his reliance upon following documents:
Description of documents Exh. No.
Verified copy of power of attorney Exh. 26
Business transfer agreement Exh. 27 and 28
Certificate of incorporation Exh. 29
Verified certified copy of resolution with
minutes of meeting.
Exh. 30
Copy of invoice and lorry receipt along with
certificate U/s. 65 (B) of Indian Evidence
Act.
Exh. 31 to 63
Ledger statement Exh. 64
Original cheque Exh. 65
Cheque returned memo Exh. 66
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Demand notice Exh. 67
Postal receipts Exh. 68 and 69
A. D. cards Exh. 70 and 71
REASONS
As to Point No.1:-
10. In order to prove the allegation leveled against the
accused, the authorized representative of complainant has filed his
evidence affidavit (C.W.1) at Exh. 20. As per his evidence, complainant
Cona Industry is a proprietary concern. It is engaged in the business of
Manufacturing of Switches and other electrical goods. The accused No.
1 is a proprietary concern and accused no. 2 is a proprietor and
responsible for the day-to-day business affairs of the accused no. 1.
Accused is a dealer and approached to the complainant to purchase of
goods/material. As per the order of accused, the complainant has time
to time supplied the goods/material to the accused. The invoice was
raised by the complainant.
11. As per his evidence, in discharge of outstanding legal
liability towards supply of goods/material, accused issued a cheque
bearing No. 088468 dated 29/08/2018 for Rs. 8,34,196/- drawn on
Union Bank of India, Gowliguda, Hyderabad – 500 012 in favour of
complainant. Thereafter, the complainant deposited the above said
cheque for encashment in his HDFC Bank Ltd., Ahura Centre Branch,
Andheri (East), Mumbai. The same was returned unpaid from drawee
bank with endorsement 'Funds Insufficient'.
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12. The accused has conducted the cross-examination of the
witnesses. In his cross-examination, the accused has raised defences
that,
a) The witness has no personal knowledge about the
case of the transaction.
b) The complainant had not given intimation to the
accused before depositing of cheque for encashment.
c) Cona Electricals has not given power to Cona
Industries to recover the earlier debt/outstanding
amount.
d) The blank signed cheque was given to Cona Electrical
for security.
e) Accused is not liable to pay cheque amount as he
paid all the due amount.
13. Before adverting towards the merit of case, it is necessary
to deal with some legal principles regarding presumptions contemplated
in Section 118 and 139 of the Act and standards of proof for its
establishment or also for rebuttal. The Hon'ble Supreme Court of India
in
T. Vasanta Kumar v/s. Vijay Kumar (2015) 8 SCC 378 has held that,
“the presumption mandated by Section 139 includes a presumption that
there exists a legally enforceable debt or liability. This is of course in
the nature of a rebuttable presumption and it is open to the accused to
raise a defence wherein the existence of a legally enforceable debt or
liability can be contested. However, there can be no doubt that there is
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an initial presumption which favours the respondent complainant”. I
have also perused the decision of Hon’ble Supreme Court of India in the
case of Hiten Dalal V/s. Bratindranath Banerjee, 2001 (6) SCC16.
14. The Hon’ble Supreme Court of India in the case Rangappa
v/s Mohan reported in AIR 2010 SC 1898, has held that, “the
presumption mandated by Section 139 of the Act does indeed include
the existence of legally enforceable debt or liability.
” In the present
case, the accused has not sent reply to the demand notice of the
complainant. The accused has conducted the cross-examination of the
complainant. It seems that, the accused has not denied the issuance of
cheque nor denied his signature on the cheque. Accused has admitted
the signature on the cheque as it is not denied by the accused.
Therefore, it can be gathered that, accused has not challenged the
signature from cheque (Exh. 65). This shows that, the signature of
accused from cheque (Exh. 65) is not in dispute. Therefore, the
presumptions under Section 118 and 139 of the Act are raised in favor
of complainant.
15. The Hon'ble Supreme Court of India in case of
M.S.
Narayan Menon @ Mani V/s. State of Kerala and another (Appeal (Cri.)
1012 of 1999 decided on 04/07/2006) has laid down the rules
regarding the standards of proof for establishment of case as well as of
rebuttal of defence in the case filed under Section 138 of the Act. The
Hon'ble Supreme Court of India has observed that
“It is not necessary for the defendant to
disprove the existence of consideration by way of direct
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evidence. The standard of proof evidently is pre-
ponderance of probabilities. Inference of pre-ponderance of
probabilities can be drawn not only from the materials on
records but also by reference to the circumstances upon
which he relies. Presumption drawn under a statute has
only an evidentiary value. Presumptions are raised in terms
of the Evidence Act. Presumption drawn in respect of one
fact may be an evidence even for the purpose of drawing
presumption under another.”
16. The Hon'ble Supreme Court of India in case of Sumeti VIJ
V/s. M/s. Paramount Tech Fab, Criminal Appeal No(s) 292 of 2021,
(Arising out of SLP (Crl.) No (s). 8498 of 2019), in which the decision
of Rohitbhai Jivanlal Patel V/s. State of Gujarat and Another, 4 (2019)
18 SCC 106 is discussed and wherein it has laid down the procedure as
to how the accused can rebut the presumption under Section118 and
139 of the Act,
“The accused in a trial under Section 138 of the Act has
two options. He can either show that consideration and
debt did not exist or that under the particular circumstances
of the case the non-existence of consideration and debt is so
probable that a prudent man ought to suppose that no
consideration and debt existed. To rebut the statutory
presumptions an accused is not expected to prove his
defence beyond reasonable doubt as is expected of the
complainant in a criminal trial. The accused may adduce
direct evidence to prove that the note in question was not
supported by consideration and that there was no debt or
liability to be discharged by him. However, the court need
not insist in every case that the accused should disprove the
non-existence of consideration and debt by leading direct
evidence because the existence of negative evidence is
neither possible nor contemplated. At the same time, it is
clear that bare denial of the passing of the consideration
and existence of debt, apparently would not serve the
purpose of the accused. Something which is probable has to
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be brought on record for getting the burden of proof shifted
to the complainant. To disprove the presumptions, the
accused should bring on record such facts and
circumstances, upon consideration of which, the court may
either believe that the consideration and debt did not exist
or their non-existence was so probable that a prudent man
would under the circumstances of the case, act upon the
plea that they did not exist. Apart from adducing direct
evidence to prove that the note in question was not
supported by consideration or that he had not incurred any
debt or liability, the accused may also rely upon
circumstantial evidence and if the circumstances so relied
upon are compelling, the burden may likewise shift again
on to the complainant. The accused may also rely upon
presumptions of fact, for instance, those mentioned in
Section 114 of the Evidence Act to rebut the presumptions
arising under Sections 118 and 139 of the Act. The accused
has also an option to prove the non-existence of
consideration and debt or liability either by letting in
evidence or in some clear and exceptional cases, from the
case set out by the complainant, that is, the averments in
the complaint, the case set out in the statutory notice and
evidence adduced by the complainant during the trial. Once
such rebuttal evidence is adduced and accepted by the
court, having regard to all the circumstances of the case
and the preponderance of probabilities, the evidential
burden shifts back to the complainant and, thereafter, the
presumptions under Sections 118 and 139 of the Act will
not again come to the complainant's rescue”.
17. The Hon'ble Bombay High Court in the case of
Vishnu Vs.
State of Maharashtra (Cri. Rev. Application No. 176/2015 decided on
24/01/2019) observed that,
“There cannot be any manner of dispute with
the proposition that once the presumption arising under
Section 118 read with Section 139 of the Act is raised, it can
be rebutted by the accused on preponderance of probability
at the trial. This can be done on the basis of cross-
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examination of the complainant and his witnesses, if any,
and/or by leading independent defence evidence.”
18
. As accused has not challenged his signature on the cheque
(Exh. 65), the presumptions under Section 118 and 139 of the Act are
raised in favor of complainant. Therefore, in view of the observations
given in case of Rangappa V/s. Sri Mohan (Cited Supra), the accused
has to raise a probable defence which creates doubts about the
existence of a legally enforceable debt or liability and the prosecution
can fail. It also makes clear that, mere denial is not sufficient to rebut
the presumption which is raised in favor of complainant. As observed in
the case of
Vishnu Vs. State of Maharashtra (cited supra), accused has
many modes to bring on record his defence e.g. by replying upon
notice, complaint, complainant's evidence and also by mode of cross
examination, her own testimony or of other witnesses, if cross examined
and also through statement of accused recorded under section 313 of
the Code. In the present case, the accused has conducted the cross-
examination of complainant wherein he raised a defence that:-
a) The witness has no personal knowledge about the
case of the transaction.
b) The complainant had not given intimation to the accused
before depositing of cheque for encashment.
c) Cona Electricals has not given power to Cona
Industries to recover the earlier debt/outstanding amount.
d) The blank signed cheque was given to Cona Electrical
for security.
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e) Accused is not liable to pay cheque amount as he
paid all the due amount.
19. So far as the first defence of the accused is concerned, as
per the cross-examination of the accused, the present witness has no
personal knowledge about the transaction and therefore his evidence
cannot be relied upon. I have perused the cross-examination of Umesh
Bait (C.W.1) and perusal of it seems that, some questions has been
asked to this witness to testify his knowledge about the present case and
some suggestions were also put to this witness that, he has no personal
knowledge about the present case. Perusal of cross-examination of this
witness, it seems that, he denied the suggestions which was put by the
accused. The complainant has filed the power of attorney at Exh. 26.
I have perused the decision of Hon’ble Supreme Court of India in A.C.
Narayanan V/s. State of Maharashtra and another, AIR 2014 S.C. 630.
In this decision it has been held that:-
“26) While holding that there is no serious conflict between the decisions in
MMTC (supra) and Janki Vashdeo Bhojwani (supra), we clarify the position and
answer the questions in the following manner:
(i) Filing of complaint petition under Section 138 of N.I Act through power of
attorney is perfectly legal and competent.
(ii) The Power of Attorney holder can depose and verify on oath before the Court
in order to prove the contents of the complaint. However, the power of attorney
holder must have witnessed the transaction as an agent of the payee/holder in
due course or possess due knowledge regarding the said transactions.
(iii) It is required by the complainant to make specific assertion as to the
knowledge of the power of attorney holder in the said transaction explicitly in
the complaint and the power of attorney holder who has no knowledge regarding
the transactions cannot be examined as a witness in the case.
(iv) In the light of section 145 of N.I Act, it is open to the Magistrate to rely upon
the verification in the form of affidavit filed by the complainant in support of the
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complaint under section 138 of the N.I Act and the Magistrate is neither
mandatorily obliged to call upon the complainant to remain present before the
Court, nor to examine the complainant of his witness upon oath for taking the
decision whether or not to issue process on the complaint under Section 138 of
the N.I. Act.
(v) The functions under the general power of attorney cannot be delegated to
another person without specific clause permitting the same in the power of
attorney. Nevertheless, the general power of attorney itself can be cancelled and
be given to another person.
20. Perusal of the above cited decision, it seems that, certain
directions were given regarding the admissibility of evidence of power
of attorney. In the case in hand, it seems that, this witness has
knowledge about the transaction and nothing has been brought on
record by the accused to disbelieve his testimony.
21. In the cross-examination, the accused has raised a defence
that, the complainant had not informed to the accused before
depositing of cheque for encashment. In the cross-examination, the
complainant has admitted that, it is not mentioned in the notice,
evidence affidavit and complaint that he has informed to the accused
before depositing of cheque for encashment. The witness volunteers
that, it is not mentioned but accused had given cheque to us to deposit
it. The accused has not brought on record anything to show that, he
had sent intimation as not to deposit the cheque and then also, the
complainant had deposited the cheque. Therefore, I do not found any
substance in the submission of accused.
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22. The accused has put some suggestions to the witness about
the change of name of company. I have perused the cross-examination
of this witness and it seems that, the complainant has admitted that, the
business transfer agreement has taken place between Cona Industries
and Cona Electricals. In the cross-examination, he admitted that, he do
not know that, on the date of purchasing the liabilities of Cona
Electrials, Cona Industries had no knowledge about the liabilities of
Cona Electricals. In the year 2019, Cona Industries converted into Cona
Industries Pvt. Ltd. I have perused the business transfer agreement filed
at Exh. 27 and perusal of it seems that, the said agreement has taken
place in between Cona Electricals and Cona Industries. I have further
perused the business transfer agreement filed at Exh. 28. perusal of
business transfer agreement, it seems that, the present complainant has
power/right to recover the earlier debt. Therefore, it seems that, the
present complainant is authorized to recover the debt.
23. The accused came with defence that, the cheque was given
as a security to Cona Electrical. On the contrary, Ld. Advocate for the
complainant submitted that, the cheque was not given for security. He
placed reliance on the decision of Hon’ble Bombay High Court in the
case of Balagi Agencies Pvt. Ltd. V/s. Mr. Vilas Bagi of Bagi Package Ltd.
& Anr., reported in 2008 ALL MR (Cri) 2230. He also place reliance on
the decision of Hon’ble Bombay High Court in the case of Madhukar V.
Desai V/s. Shaikh Abdul Riyaz-2007 All MR (Cri) 58. He also placed
reliance on the decision of Hon’ble Bombay High Court in the case of
Purshottam Maniklal Gandhi V/s. Manohar K. Deshmukh, 2007
(2)Bom.C.R. (Cri.)38. I have perused the cited decisions. I have
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perused the cross-examination of the complainant. I have also perused
the documents filed on record. Perusal of all the oral as well as
documentary evidence, it seems that, the accused has not brought on
record any material to show that, the cheque was given to the Cona
Electrical as a security.
24. Ld. Advocate for the accused has submitted that, the
accused is not liable to pay cheque amount as no outstanding is due
against the accused. The complainant came with specific case that, he
has delivered the goods/articles to the accused. The complainant has
filed ledger statement at Exh. 64, the invoices and lorry receipt along
with certificate u/s. 65 (B) of Indian Evidence Act at Exh. 31 to 63.
These documents are filed by the complainant to support its contention
that the cheque amount is outstanding against the accused. The
accused has not brought any material on record to disbelieve the
statement of the complainant.
25. As I discussed above the accused has not brought on record any
material by way of cross-examination or in the statement of 313 of the
Code. Therefore, it becomes clear that the accused has utterly failed to
rebut the presumption raised under Section 118 & 139 of the Act.
Therefore, I hold that the complainant has duly proved that accused has
issued the subject cheque from his account in favour of the complainant
towards the legally enforceable debt. Hence, point No. 1 is answered in
the “affirmative”.
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As to Point No. 2:-
26. As per contentions and evidence of complainant, the
cheque no. 088468 (Exh. 65) was presented for encashment in HDFC
Bank Ltd. Ahura Center Branch, Andheri (E) branch. However, the
cheque was returned with remark as ‘Funds Insufficient’. In support of
said contentions, the complainant produced the cheque return memo of
(Exh. 66). It is seen from the bank memo (Exh. 66) that, the cheque
was returned with endorsement 'Funds Insufficient'. The memo (Exh.
66) bears seal and signature of concerned bank. Therefore, here it is
necessary to mention Section 146 of the Negotiable Instruments Act;
“
The Court shall, in respect of every proceeding
under this Chapter, on production of bank's slip or memo
having thereon the official mark denoting that the cheque
has been dishonored, presume the fact of dishonor of
such cheque, unless and until such fact is disproved”.
27. So, as per the aforesaid provision, the bank memo (Exh.
66), is having presumptive value as per Section 146 of the N.I Act.
Admittedly, the said presumption is rebuttable. However, nothing is
brought on record by the accused to rebut the presumption in respect of
bank memo (Exh. 66). After perusal of said memo, it is seen that the
cheque No. 088468 (Exh. 65) was dishonored for reason 'Funds
Insufficient'. However, nothing is brought by the accused on record to
show his bonafide as well as also to show that at the relevant time, the
amount mentioned in the cheque was pending in his account. Hence, no
hurdle to held that the cheque was dishonored with reason 'Funds
Insufficient'. Consequently, point No. 2 is answered in the “affirmative”.
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As to Point Nos. 3 and 4 :-
28. As per evidence of complainant (C.W.1), after dishonor of
cheque (Exh. 65), he issued demand notice dated 06/09/2018
(Exh.67). The complainant has filed postal receipts at Exh. 68 and 69
to show that, the notice was issued on the correct address of the
accused. In support of said contention, the complainant produced
demand notice dated 06/09/2018 (Exh. 67) and postal receipts (Exh.
68 and 69). Upon perusal of demand notice (Exh. 67), postal receipts
(Exh. 68 and 69), it is seen that, the complainant issued demand notice
on 06/09/2018 to the accused and same was received by the accused.
The demand notice was sent on the following address :-
To,
1. R. K. Agencys.
Having address at : 5-1-216,
Yadav sangham Bhavan,
Jambhag, Hyderabad, Telangana – 500 095.
2. Harasan Singh
Proprietor of R. K. Agencys.
Having address at : 5-1-216.
Yadav sangham Bhavan,
Jambhag, Hyderabad, Telangana – 500 095.
29. Accused nowhere challenged his aforesaid residential
addresses. It seems from the postal receipts at Exh. 68 and 69 that, the
said notice was sent on the correct address. In the cross-examination,
the accused has not raised the objection that, the demand notice was
not issued on the correct address of the accused. Therefore, there is no
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hurdle to held that complainant sent demand notice on the correct
address of accused. Ld. advocate for the complainant has placed
reliance on the decision of Hon’ble Supreme Court of India in the case
of K. Bhaskaran V/s. Shankaran V. Balan, 1999 ALL MR 9(Cri,) 1845.
He also place reliance on the decision of Hon’ble Bombay High Court in
the case of Vasco Urban Co-Op Credit Society V/s. Mrs. Shobha D.
Koregaonkar reported in 2005 Cri LJ 2465. I have perused the cited
decision. Here, it is necessary to mention the observations given by
Hon'ble Supreme Court of India in case of C. C. Alavi Haji V/s.
Palapetty Muhammeed and anr reported in All MR (Cri.) 2007. Wherein
it is observed by Hon'ble Supreme Court of India that,
“15. Insofar as the question of disclosure of necessary particulars
with regard to the issue of notice in terms of proviso (b) of Section
138 of the Act, in order to enable the Court to draw presumption
or inference either under Section 27 of the G.C. Act or Section 114
of the Evidence Act, is concerned, there is no material difference
between the two provisions. In our opinion, therefore, when the
notice is sent by registered post by correctly addressing the drawer
of the cheque, the mandatory requirement of issue of notice in
terms of Clause (b) of proviso to Section 138 of the Act stands
complied with. It is needless to emphasise that the complaint must
contain basic facts regarding the mode and manner of the issuance
of notice to the drawer of the cheque. It is well settled that at the
time of taking cognizance of the complaint under Section 138 of
the Act, the Court is required to be prima facie satisfied that a case
under the said Section is made out and the aforenoted mandatory
statutory procedural requirements have been complied with. It is
then for the drawer to rebut the presumption about the service of
notice and show that he had no knowledge that the notice was
brought to his address or that the address mentioned on the cover
was incorrect or that the letter was never tendered or that the
report of the postman was incorrect. In our opinion, this
interpretation of the provision would effectuate the object and
purpose for which proviso to Section 138 was enacted, namely, to
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avoid unnecessary hardship to an honest drawer of a cheque and
to provide him an opportunity to make amends.
17. It is also to be borne in mind that the requirement of giving of
notice is a clear departure from the rule of Criminal Law, where
there is no stipulation of giving of a notice before filing a
complaint. Any drawer who claims that he did not receive the
notice sent by post, can, within 15 days of receipt of summons
from the court in respect of the complaint under Section 138 of the
Act, make payment of the cheque amount and submit to the Court
that he had made payment within 15 days of receipt of summons
(by receiving a copy of complaint with the summons) and,
therefore, the complaint is liable to be rejected. A person who does
not pay within 15 days of receipt of the summons from the Court
along with the copy of the complaint under Section 138 of the Act,
cannot obviously contend that there was no proper service of
notice as required under Section 138, by ignoring statutory
presumption to the contrary under Section 27 of the G.C. Act and
Section 114 of the Evidence Act. In our view, any other
interpretation of the proviso would defeat the very object of the
legislation. As observed in Bhaskarans case (supra), if the giving of
notice in the context of Clause (b) of the proviso was the same as
the receipt of notice a trickster cheque drawer would get the
premium to avoid receiving the notice by adopting different
strategies and escape from legal consequences of Section 138 of
the Act.”
In the matter in hand also, as discussed earlier, it is duly
established that the complainant sent demand notice on the correct
address of accused. As observed by Hon’ble Supreme Court of India in
the case of
C. C. Alavi Haji V/s. Palapetty Muhammeed and anr. (cited
supra), when the notice is sent by registered post by correctly
addressing the drawer of the cheque, the mandatory requirement of
issue of notice in terms of Clause (b) of proviso to Section 138 of the
Act stands complied with. Therefore, in matter in hand, the compliance
of Section 138(b) of the Act stands complied with by the complainant.
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30. As already discussed in earlier points, it becomes clear that
the subject cheque (Exh. 65) was dishonored on 31/08/2018 for the
reason of 'Funds Insufficient'. It is seen from the record that, the notice
(Exh. 67) was posted on 07/09/2018 to the accused and so, it is seen to
be sent within 30 days of dishonor of cheque. It is not defence of the
accused that he repaid the cheque amount within 15 days of notice and
summons of this proceeding. So, point Nos. 3 and 4 are answered in
the “affirmative”.
As to Point No.5 :
31. In view of the above discussion, it reveals that the essential
ingredients of the offence punishable u/s 138 of the Act are proved by
the complainant. As already discussed in earlier points, it becomes clear
from memo (Exh.66) that the cheque (Exh. 65) was dishonored on
31/08/2018. The notice (Exh. 67) was sent on 06/09/2018 and so, it is
seen to be issued within 30 days of dishonor of cheque (Exh. 65).
Therefore, the accused has to pay cheque amount within fifteen days
from 07/09/2018 but accused failed to pay it. Therefore, the cause of
action for this complaint was arose on 23/09/2018. The complainant
has to file complaint with 30 days from the day of cause of action. The
complaint was filed on 12/10/2018. Therefore, the complaint is seen to
be filed within limitation. Hence, in view of entire evidence of the
complainant and failure of the accused to rebut presumptions given
under section 118 and 139 of the Act, it becomes clear that the accused
has committed an offence punishable u/s 138 of the Act. Consequently,
point No. 5 is answered in the “affirmative”.
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32. In view of my findings recorded herein above on point
No.5, I am taking a pause to hear the accused in person, his advocate.
Both are absent. Further, the complainant is absent and his Counsel is
present. Ld. Counsel for the complainant submitted that, maximum
punishment may be awarded. The matter is of the year 2018. Hence, it
won't be proper to wait further by putting the case on hibernation.
33. Further it would not be illegal to pass the Judgment of
conviction in absence of accused as Sec. 353 (6) and Sec. 418 (2) of
Code of Criminal Procedure empowers the court to pronounce
Judgment even of conviction in absence of accused and to issue
conviction warrant if court find it to be just and proper. Hence, coupling
the provisions laid down under section 353(6) and 418(2) of Code of
Criminal Procedure with the guidelines to dispose of the old cases
expeditiously. Hence, I found it to be just and proper to pass the
Judgment of conviction in absence of accused where the accused is bent
upon to cause delay rather exercising his rights for defence. Thus, I do
not find any reason to keep the case pending when accused himself is
not willing to defend himself or even to appear before court.
Considering the age of case and the chances given to the accused I find
it to be justifiable and proper not to wait further and pronounce the
Judgment in absence of accused.
34. Admittedly the accused has given sufficient opportunity to
make payment of the cheque from notice of the complainant till
conclusion of trial but accused failed to make it. Therefore, in order to
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deter the human tendency to handover cheque without intending to
honour the same, the punishment is required to impose upon the
accused rather than giving benefit of Probation of Offenders Act.
35. The object of the Act is to enhance the credibility of the
negotiable instruments. The cheque involved in the case in hand is of
Rs. 8,34,196/-. In the present matter, the disputed cheque was
presented to the drawee bank. If it would have had encashed regularly,
complainant could have received the amount in the month of August
2018. That amount is admittedly lying with the accused. The Hon’ble
Supreme Court of India in the case of
R.Vijayan V. Baby and anthers AIR
2012 SC 528, has discussed and expressed several aspects to determine
the amount of compensation and interest on the cheque amount. Para
Nos. 14 to 18 of the above judgment needs to be reproduced here and
those are as under:
“As the provisions of Chapter XVII of the Act strongly
lean towards grant of reimbursement of the loss by way of
compensation, the courts should, unless there are special
circumstances, in all cases of conviction, uniformly exercise
the power to levy fine upto twice the cheque amount
(keeping in view the cheque amount and the simple interest
thereon at 9% per annum as the reasonable quantum of loss)
and direct payment of such amount as compensation.
Direction to pay compensation by way of restitution in
regard to the loss on account of dishonour of the cheque
should be practical and realistic, which would mean not only
the payment of the cheque amount but interest thereon at a
reasonable rate. Uniformity and consistency in deciding
similar cases by different courts, not only increase the
credibility of cheque as a negotiable instrument, but also the
credibility of courts of justice.”
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36. After going through above guidelines issued by Hon'ble
Supreme Court of India, it needs to maintain uniformity by awarding 9
% per annum interest on the cheques amount by way of compensation
to the complainant. If interest on cheque amount (Rs. 8,34,196/-) at the
rate of 9 % p.a. is calculated for the period of 74 months i.e. from the
filing of present complaint (12/10/2018 to 10/01/2025), it comes to
Rs. 4,62,979/-. Cheque amount is Rs. 8,34,196/-. Hence total amount
of compensation comes to Rs. 12,97,175/-. Thus, the amount of Rs.
12,97,175/- is necessary to give to the complainant as an compensation.
37. The object of the Act is to enhance the credibility of the
negotiable instruments. There is no criminal antecedent of accused
came on record. Thus, after considering said circumstances, amount of
cheques, nature and manner of the offence, in my opinion, sentence to
suffer simple imprisonment for six months will be proper and justified.
38. Hon'ble Supreme Court of India in the case of
Sugandhi
Sureshkumar Vs. Jagdishan, reported in AIR 2002 SC 681, held that in
case of offences under section 138 of the Act a Magistrate can alleviate
the grievance of the complainant by making resort to Section 357 (3) of
Criminal Procedure Code. In this case Hon’ble Supreme Court of India
also held that the Court may enforce order of compensation by
imposing sentence in default. Resultantly, following order is passed:
ORDER
1. Accused No. 2. Harasan Singh- Proprietor of accused
no. 1. R. K. Agencys. Age : Adult, is convicted under
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Section 255 (2) of the Code of Criminal Procedure,
1973 for an offence punishable under Section 138 of
the Negotiable Instruments Act, 1881 and sentenced
to suffer simple Imprisonment for six months.
2. Accused is directed to pay compensation Rs.
12,97,175/- (Rs. Twelve Lacs Ninety Seven Thousand
One Hundred Seventy Five Only) to the complainant
within three months from today, in default to suffer
Simple Imprisonment for nine months.
3. Accused to surrender to his bail bond.
4. Muddemal being an original cheque and bank memo,
be returned to the complainant after appeal period is
over.
5. No question of Set-off under Section 428 of the Code
of Criminal Procedure, 1973 as the accused has not
spent any period in the custody during the trial.
6. Today i.e. on the date of judgment accused remained
absent, hence issue standing Non-bailable warrant against
the accused for his arrest through concerned police station
for execution of sentence in view of Section 418 (2) of
Cr.P.C.
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7. The copy of this Judgment shall be send to the
convicted accused, free of cost, in view of section
363(1) of the Code of Criminal Procedure, 1973.
8. Dictated and pronounced in open court.
Mumbai (Y. P. Pujari )
Date:- 10/01/2025 Metropolitan Magistrate
48th Court, Andheri, Mumbai.
Dictated On : 10/01/2025
Typed On : 10/01/2025
Signed On : 10/01/2025
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