Final Order 1

Order Details: Copy  of Judgment
Pdf Text: 1 C. C. NO. 4480/SS/2018
CNR No. : MHMM19-011687-2018
Received On : 03/11/2018
Registered On : 03/11/2018
Decided On : 24/08/2026
Duration :Y-07, M-09, D-21
IN THE COURT OF JUDICIAL MAGISTRATE (FIRST CLASS), ANDHERI
(Court No. 48), MUMBAI.
( Presided over by Y. P. Pujari )
C.C. No. 4480/SS/2018 Exh. 61
Hidayat Ulla M. K. Ansari.
Aged : 53 years, Occu : Business
Indian Inhabitant,
address at :
369/2963, Motilal Nagar No. 2,
Badi Masjid Road, Opp. Khandan Lane,
Goregaon (W), Mumbai 400 104. -- Complainant
Versus
1. Maa Baglamukhi Group.
A Sole proprietorship Firm.
2. Jai Prakash Dubey.
Proprietor/Authorized person of Accused No. 1.
Aged : Adult, Occu : Business
Both having address at :
B- 403, Rashmi Residency, Link Road,
Nalasopara East, Maharashtra – 401209
And
Office No. 4, D Wing, Rash mi Dhruvita Park,
New Link Road, Nalasopara East,
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Maharashtra – 401 209. -- Accused
OFFENCE PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE
INSTRUMENTS ACT
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Appearance:- Adv. Mr. Abhishek Jani for the complainant.
Adv. Sadhana Singh for the accused.
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JUDGMENT
(Delivered on 24th of August 2026)
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 an amount of Rs.
40,00,000/-.
The brief facts of complainant's case are as under:
02. It is averred by the complainant that accused No. 1 is a sole
proprietorship firm and accused No. 2 is its sole proprietor. Accused
No. 2 is responsible for the day-to-day activity and management of
accused No.1. The complainant believed and trusted the representation
made by the accused.
03. Complainant has further submitted that, in discharge of
liability, accused issued a cheque bearing No. 001003 dated
28/06/2018 for Rs. 40,00,000/- drawn on Kotak Mahindra Bank,
Nevilla House, Vasai Road (E) Branch in favour of complainant.
Thereafter, the complainant deposited the above said cheque for
encashment in his bank namely Bombay Mercantile Co-Op Bank Ltd., V.
P. Road, Andheri West, Mumbai. The same was returned unpaid from
drawee bank with endorsement “Funds Insufficient”. Accordingly, the
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Bombay Mercantile Co-Op. Bank Ltd. issued memo dated 20/08/2018.
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 15/09/2018 to accused. The notice was
returned with remark “Left”. 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. 10 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 complainant did not prove the transaction.
b) The complainant did not show his financial capacity
to pay the money.
c) The transaction amount is not shown in the income-
tax return.
d) The cheque returned memo is not proved.
e) The accused is not liable to pay the cheque amount.
06. The statement of accused under Section 313 of the Code of
Criminal Procedure, 1972 (in short 'the Code') was recorded vide Exh.
51.
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07. Heard Ld. Advocate Shri. Abhishek Jani for complainant
and Heard Ld. Advocate Sadhana Singh for the accused and also
perused and considered the written notes of argument filed by
complainant at Exh. 42 .
08. From perusal of complaint, record and defence of the
accused, 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.
001003 (Exh. 24) 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”?
No.
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 ?
No.
6. What order? The accused
is acquitted.
09. In order to prove his case, the complainant has filed his
evidence affidavit as a (C.W.1) at Exh. 17. The complainant also placed
his reliance upon following documents:
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Description of documents Exhibit numbers
Original cheque Exh. 24
Cheque returned memo Article - A
Office copy of demand notice Exh. 25
Postal receipts Exh. 26 to 29
A. D. Card Exh. 30 and 31
Returned Envelope Exh. 32 and 33
Photocopy of MOU Article -B
Photocopy of receipt Article C and D
Photocopy of 5 cheques Article E to I.
REASONS
As to Point No.1:-
10. In order to prove the allegation leveled against the
accused, the complainant has filed his evidence affidavit as a (C.W.1) at
Exh. 17 As per his evidence, accused No. 1 is a sole proprietorship firm
and accused No. 2 is its sole proprietor. Accused No. 2 is responsible for
the day-to-day activity and management of accused No. 1. He believed
and trusted the representation made by the accused.
11. It has further come in his evidence that the notarized MOU
was executed on 16/05/2017 between him and accused. He agreed to
purchase a residential flat on the land mentioned in the MOU. He paid
an amount of Rs. 25,00,000/- to the accused by cheque No. 517683 and
517684 dated 23/03/2015 and 15/04/2015. The accused had issued
the receipts of Rs. 25,00,000/- in his favour. Accused informed him that
residential zone is declared as a industrial zone and accused offered
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him to purchase industrial Gala instead of flat, but he refused the same
and asked for refund of money.
12. It has further come in his evidence that, in discharge of
liability, accused issued a cheque bearing No. 001003 dated
28/06/2018 for Rs. 40,00,000/- drawn on Kotak Mahindra Bank,
Nevilla House, Vasai Road (E) Branch in his favour. Thereafter, he
deposited the above said cheque for encashment in his bank namely
Bombay Mercantile Co-Op Bank Ltd., V. P. Road, Andheri West, Mumbai.
The same was returned unpaid from drawee bank with endorsement
“Funds Insufficient”.
13. The accused has conducted the cross-examination of the
complainant. In his cross-examination, the accused has raised defences
that,
a) The complainant did not prove the transaction.
b) The complainant did not show his financial capacity
to pay the money.
c) The transaction amount is not shown in the income-
tax return.
d) The cheque returned memo is not proved.
e) The accused is not liable to pay the cheque amount.
14. Before adverting towards the merit of case, it is necessary
to deal with some legal principle 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
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in
T. Vasanthakumar v/s. Vijayakumari (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
an initial presumption which favours the respondent complainant”.
15. The Hon’ble Supreme Court of India in the case Rangappa
V. 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.
” I have perused the
decision of Hon’ble Supreme Court of India in K. Bhaskaran V/s.
Sankaran Vaidhyan Balan, 1999 DgLaw (SC) 544. I have also perused
the decision of Hon’ble Supreme Court of India in Basalingappa V/s.
Mudibasappa, (2019) 5 SCC 418. 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. I have
minutely perused the cross-examination of the complainant and 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. 24). This shows that, the signature of accused from cheque (Exh.
24) is not in dispute. Therefore, the presumptions under Section 118
and 139 of the Act are raised in favor of complainant.
16. The Hon'ble Supreme Court of India in case of
M.S.
Narayan Menon @ Mani V/s. State of Kerala and another (Appeal (Cri.)
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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
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.”
17. 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
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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
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”.
18. 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
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be rebutted by the accused on preponderance of probability
at the trial. This can be done on the basis of cross-
examination of the complainant and his witnesses, if any,
and/or by leading independent defence evidence.”
19
. As accused has not challenged his signature on the cheque
(Exh. 24), 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 defences that:-
a) The complainant did not prove the transaction.
b) The complainant did not show his financial capacity
to pay the money.
c) The transaction amount is not shown in the income-
tax return.
d) The cheque returned memo is not proved.
e) The accused is not liable to pay the cheque amount.
The statement of accused under Section 313 of the Code is recorded.
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20. So far as the first defence of the accused is concerned, the
accused has submitted that, the complainant did not file any document
to show the transaction. I have perused the complaint as well as the
evidence affidavit of the complainant. It is the case of the complainant
that the notarized MOU was executed on 16/05/2017 between accused
and the complainant. The complainant agreed to purchase a residential
flat on the land mentioned in the MOU. The complainant paid an
amount of Rs. 25,00,000/- to the accused by cheque No. 517683 and
517684 dated 23/03/2015 and 15/04/2015. The accused had issued
the receipts of Rs. 25,00,000/- in favour of complainant. It is further
the case of the complainant that accused informed to him the
residential zone is declared as an industrial zone and accused offered
him to purchase industrial Gala instead of flat, but complainant refused
the same and asked for refund of money.
21. I have perused cross-examination of the complainant
wherein it has come on record that he had given two cheques to the
accused of Rs. 12,50,000/- each. Those cheques were encashed in the
account of accused. I have minutely perused the entire cross-
examination of the complainant and it seems that the accused did not
deny the transaction. Therefore, it seems that the complainant has
proved the transaction.
22. I have perused the decision of Hon’ble Supreme Court of
India in the case of Rangappa’s Case (Cited supra) and perusal of it
makes clear that, once the accused has admitted her signatures on the
cheque and issuance of cheque then presumption U/s. 118 and 139 of
N. I. Act arises in favour of complainant. I have also perused the
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decision of Hon’ble Supreme Court of India in the case of Sanjabij Tari
V/s. Kishore S. Borcar & Anr., Criminal Appeal No. 1755 of 2010,
decided on 25/09/2025. It has held that,
“
This Court also takes judicial notice of the fact that some District
Courts and some High Courts are not giving effect to the
presumptions incorporated in Sections 118 and 139 of NI Act and
are treating the proceedings under the NI Act as another civil
recovery proceedings and are directing the complainant to prove the
antecedent debt or liability. This Court is of the view that such an
approach is not only prolonging the trial but is also contrary to the
mandate of Parliament, namely, that the drawer and the bank must
honour the cheque, otherwise, trust in cheques would be irreparably
damaged.”
23. Perusal of the above cited decision, it makes clear that,
once the accused has admitted, his signature and issuance of cheques,
then burden lies on the accused to rebut the presumption arises U/s.
118 and 139 of Negotiable Instruments Act. In the case in hand, the
burden lies on the accused to rebut the presumption because the
accused did not deny his signature nor denied issuance of cheque. The
burden is on the accused to rebut the presumption and therefore it is
necessary to produce the evidence of the parties brought on record to
rebut the presumption.
24. The accused came with a defence that the complainant did
not file any document to show that he was having an amount of Rs.
25,00,000/- with him. In other words, it is the submission of the
accused that the complainant did not file any document to show his
financial capacity to pay the amount of Rs. 25,00,000/-. I have perused
the decision of Hon’ble Supreme Court of India in Sanjabij Tari’s case
(Cited supra), it has observed that,
“29. Furthermore, the fact that the accused has failed to reply to the
statutory notice under Section 138 of the NI Act leads to an inference
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that there is merit in the Appellant-Complainant’s version. This Court in
Tedhi Singh vs. Narayan Dass Mahant, (2022) 6 SCC 735 has held that
the accused has the initial burden to set up the defence in his reply to the
demand notice that the complainant did not have the financial capacity
to advance the loan. The relevant portion of the” said judgment is
reproduced hereinbelow:-
“10. … The proceedings under Section 138 of the NI Act is not a civil
suit. At the time, when the complainant gives his evidence, unless a
case is set up in the reply notice to the statutory notice sent, that the
complainant did not have the wherewithal, it cannot be expected of
the complainant to initially lead evidence to show that he had the
financial capacity. To that extent, the courts in our view were right in
holding on those lines. However, the accused has the right to
demonstrate that the complainant in a particular case did not have
the capacity and therefore, the case of the accused is acceptable
which he can do by producing independent materials, namely, by
examining his witnesses and producing documents. It is also open to
him to establish the very same aspect by pointing to the materials
produced by the complainant himself. He can further, more
importantly, achieve this result through the cross-examination of the
witnesses of the complainant. Ultimately, it becomes the duty of the
courts to consider carefully and appreciate the totality of the evidence
and then come to a conclusion whether in the given case, the accused
has shown that the case of the complainant is in peril for the reason
that the accused has established a probable defence. (emphasis
supplied)
30. This Court in MMTC Ltd. and Another vs. Medchl Chemicals & Pharma
(P) Ltd. and Another, (2002) 1 SCC 234 has specifically held that when a
statutory notice is not replied, it has to be presumed that the cheque was
issued towards the discharge of liability.”
25. In the case in hand also the accused did not reply to the
demand notice and did not raise the defence of financial incapacity of
complainant. I have perused the cross-examination of the complainant,
wherein it has come on record that the complainant had given two
cheques to the accused of Rs. 12,50,000/- each. Those cheques were
encashed in the account of accused. Further, the accused did not reply
to the demand notice of the complainant and did not raise the defence
of the financial incapacity of the complainant.
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26. The accused has raised an objection that the complainant
did not file the income tax returns to show and prove that the alleged
amount was shown in the income tax return. I have perused the
decision of Hon’ble Bombay High Court, Nagpur Bench in Prakash
Madhukarrao Desai Versus Dattatraya Sheshrao Desai in Criminal
Appeal No. 795/2018 decided on 19.08.2023. In the cited decision the
following question was under consideration,
“Whether in case the transaction, is not reflected in the Books of
account and/or the Income Tax Returns of the holder of the cheque in due
course and thus is in violation to the provisions of Section 269-SS of the
Income Tax Act, 1961 whether such a transaction, can be held to be “a legally
enforceable debt” and can be permitted to be enforced, by institution of
proceedings under Section 138 of the Negotiable Instruments Act ?”
The Hon’ble Bombay High Court, Bench at Nagpur has held that,
“ It can thus be said that the validity of Section 269-SS of the Act of
1961 having been upheld in Assistant Director, Inspection Investigation
(supra), breach thereof being subjected to penalty under Section 271-D with
a further provision for waiving the penalty under Section 273-B of the Act of
1961, it will have to be held that such transaction in violation of Section 269-
SS of the Act of 1961 at the behest of the drawer of a cheque cannot be
treated as null and void. Similar is the case when there is an omission of any
entry relevant for computation of total income of such person to evade tax
liability under Section 271-AAD of the Act of 1961. Such person, assuming
him to be the payee/holder in due course, is liable to be visited by penalty as
prescribed. Such act is not treated to be statutorily void. We may in this
context refer to paragraph 4 of the decision in M/s Gujarat Travancore
Agency, Cochin (supra) wherein reference has been made to the following
statement in Corpus Juris Secundum, Volume 85 page 580, paragraph 1023 ”
“A penalty imposed for a tax delinquency is a civil obligation, remedial
and coercive in its nature, and is far different from the penalty for a crime or
a fine or forfeiture provided as punishment for the violation of a criminal
penal laws.” Further, in Atul Mohan Bindal (supra), the penalty referred to in
Section 271(1)(c) of the Act of 1961 has been referred to as a civil liability
and not one which is criminal or quasi-criminal in nature. Thus, in the light
of statutory presumption under Sections 118 and 139 of the Act of 1881, it
would be for the accused to rebut such presumption in the light of what has
been held in Rangappa (supra).
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In view of the aforesaid discussion, it is held that a transaction not
reflected in the books of accounts and/or Income Tax returns of the holder of
the cheque in due course can be permitted to be enforced by instituting
proceedings under Section 138 of the Act of 1881 in view of the presumption
under Section 139 of the Act of 1881 that such cheque was issued by the
drawer for the discharge of any debt or other liability, execution of the cheque
being admitted. Violation of Sections 269-SS and/or Section 271-AAD of the
Act of 1961 would not render the transaction unenforceable under Section
138 of the Act of 1881. The decisions in Krishna P. Morajkar, Bipin Mathurdas
Thakkar and Pushpa Sanchalal Kothari (supra) lay down the correct position
and are thus affirmed. The decision in Sanjay Mishra (supra) with utmost
respect stands overruled.”
I have also perused the decision of Hon’ble Supreme Court of
India in Sanjabij Tari’s Case (Cited Supra). It has observed that,
“19. Recently, the Kerala High Court in P.C. Hari vs. Shine Varghese &
Anr., 2025 SCC OnLine Ker 5535 has taken the view that a debt created
by a cash transaction above Rs. 20,000/- (Rupees Twenty Thousand) in
violation of the provisions of Section 269SS of the Income Tax Act,
1961 (for short ‘IT Act, 1961’) is not a ‘legally enforceable debt’ unless
there is a valid explanation for the same, meaning thereby that the
presumption under Section 139 of the Act will not be attracted in cash
transactions above Rs. 20,000/- (Rupees Twenty Thousand).
20. However, this Court is of the view that any breach of Section
269SS of the IT Act, 1961 is subject to a penalty only under Section
271D of the IT Act, 1961. Further neither Section 269SS nor 271D of
the IT Act, 1961 state that any transaction in breach thereof will be
illegal, invalid or statutorily void. Therefore, any violation of Section
269SS would not render the transaction unenforceable under Section
138 of the NI Act or rebut the presumptions under Sections 118 and
139 of the NI Act because such a person, assuming him/her to be the
payee/holder in due course, is liable to be visited by a penalty only as
prescribed. Consequently, the view that any transaction above
Rs.20,000/- (Rupees Twenty Thousand) is illegal and void and
therefore does not fall within the definition of ‘legally enforceable debt’
cannot be countenanced. Accordingly, the conclusion of law in P.C. Hari
(supra) is set aside.”
Perusal of cited decisions, it seems that, the amount is not shown
in the income-tax return, then also the said amount can be recovered.
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27. 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”.
As to Point No. 2:-
28. As per contentions and evidence of complainant, the
cheque No. 001003 (Exh. 24) were presented for encashment. It is the
submission of the complainant that the cheque was dishonoured with
reason “Funds Insufficient”. I have perused the record and it seems that
the copy of memo is filed on record which does not bear seal and
signature of the bank. The said cheque returned memo does not bear
official mark of the bank. In the cross-examination of the complainant,
the accused has asked to the complainant that the cheque returned
memo is not issued by the bank and it was prepared by himself and
produced on record but the complainant has denied the said suggestion.
In the cross-examination of the complainant, it has come on record that
he has not seen the cheque returned memo filed at Article A. In the
statement of accused recorded U/s. 313 of the Code of Criminal
Procedure, the following question was asked to the accused:-
Q. 9 It has further come in his evidence that as per your
instructions, he presented said cheque in his bank, but said
cheque was dishonoured for the reason “Stop Payment”. What
you have to say about it ?
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Ans. I don’t know.
Q. 12. It has further come in his evidence that he deposited
said cheque in his bank but it was dishonoured for the reason
“ Insufficient funds”. What you have to say about it ?
Ans. I don’t know.
Perusal of the above questions and answers given by the accused in his
statement recorded U/s. 313 of the Code of Criminal Procedure it
makes clear that accused did not admit the dishonoured of cheque.
29. Therefore, the burden shifts on the complainant to prove
that the cheque was dishonoured with reason “Funds Insufficient”. I
have perused the 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”.
The presumption U/s. 146 of N. I. Act is not available to the
complainant because the cheque returned memo does not bear official
mark of the bank. I have perused the decision of Hon’ble Bombay High
Court, Nagpur Bench in the case of Smt. Vandana W/o. Akhilesh Pandey
V/s. Smt. Abhilasha W/o. Anil Pande, Criminal Appeal No. 360 of 2017.
It is observed in para no. 13 that, “When the complainant (appellant in
the present case) asserted that the cheque was returned or dishonoured,
it was for her to prove this basic fact. Section 146 of the said Act
provides that if the complainant places on record a slip or memo issued
by the bank having official mark of the bank thereon, denoting that the
cheque was dishonoured, it would be presumed that such cheque was
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dishonoured until such fact was disproved. Thus, if such a document
was placed on record by the appellant in the present case, it would
constitute prima facie evidence of dishonour of cheque and burden
would have been entirely on the respondent to disprove such a fact.
But, when the memo produced in the present case by the appellant did
not bear official mark of the bank, there was no document as
contemplated under Section 146 of the said Act to presume that the fact
of dishonour of cheque had been proved by the appellant. The burden
continued to lie on the appellant to prove the basic fact of dishonour of
cheque, in the facts and circumstances of the present case.”. In the case
in hand also, the complainant has not proved the fact that, cheque was
dishonoured by reason “Funds Insufficient” as mentioned in the
complaint and evidence affidavit. The cheque retrun memo does not
bears offical marks. Therefore, in the case in hand, the complainant has
not proved that, the cheque at Exh. 24 is dishonoured with reason
“Funds Insufficient”. Consequently, point No. 2 is answered in the
“Negative”.
As to Point Nos. 3 and 4 :-
30. As per evidence of Hidayatullah Ansari (C.W.1), after
dishonor of cheque (Exh. 24), he issued demand notice dated
15/09/2018 (Exh. 25). The complainant has filed postal receipts at
Exh. 26 to 29 and A. D. Cards at Exh. 30 and 31 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
15/09/2018 (Exh. 25), postal receipt (Exh. 26 to 29) and A. D. Cards
(Exh. 30 and 31). Upon perusal of demand notice (Exh. 25), postal
receipt (Exh. 26 to 29) and A. D. Cards (Exh. 30 and 31), it is seen that,
the complainant issued demand notice on 15/09/2018 to the accused
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and same was returned with remark “Left”. The demand notice was
sent on the following address :-
To,
1. Maa Baglamukhi Group.
A Sole proprietorship Firm.
2. Jai Prakash Dubey.
Proprietor/Authorized person of Accused No. 1.
Aged : Adult, Occu : Business
Both having address at :
B- 402, Rash mi Residency, Link Road,
Nalasopara East, Maharashtra – 401209
And
Office No. 4, D Wing, Rashmi Dhruvita Park,
New Link Road, Nalasopara East,
Maharashtra – 401 209.
31. Accused nowhere challenged his aforesaid residential
address. It seems from the postal receipts at Exh. 26 to 29 and A. D.
cards at Exh. 30 and 31 that, the said notice was delivered on the
correct address of accused. Therefore, there is no hurdle to held that
complainant sent demand notice on the correct address of accused.
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
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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
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.”
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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.
32. As already discussed in earlier points, it becomes clear that
the subject cheque (Exh. 24) was dishonored on 20/08/2018 for the
reason of ‘Funds Insufficient’. It is seen from the record that, the notice
(Exh. 25) was returned Left on 20/09/2018 to the accused and so, it is
seen to be sent within 30 days of dishonor of cheque. As discussed
earlier, notice was duly served upon the accused. 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 :
33. The notice (Exh. 25) was sent on 15/09/2018 and so, it is
seen to be issued within 30 days of alleged dishonor of cheque (Exh.
24). Therefore, the accused has to pay cheque amount within fifteen
days from 20/09/2018 but accused failed to pay it. Therefore, the cause
of action for this complaint was arose on 06/10/2018. The complainant
has to file complaint with 30 days from the day of cause of action. The
complaint was filed on 03/11/2018. Therefore, the complaint is seen to
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be filed within limitation. Though the complaint is filed within
limitation, but while discussing point no. 2 I hold that, the complainant
has failed to prove the essential ingredients of the offence punishable
u/s 138 of the Act. As already discussed in earlier points, it becomes
clear that, the complainant has failed to prove the dishonour of cheque
as the cheque memo is not proved nor the complainant has taken pain
to examine the banker.
34. In the case in hand, while discussing point no. 2 I held that,
it becomes clear that, the complainant has failed to prove the dishonour
of cheques as the cheque memo is not proved nor the complainant has
taken pain to examine the banker. Therefore, though the complainant
has proved the legally enforceable debt, then also the complainant has
failed to prove dishonour of cheque. Therefore, the complainant has
failed to prove that, the accused has committed an offence punishable
u/s 138 of the Act. Consequently, point No. 5 is answered in the
“negative”.
As to Point No.6:
35. In view of entire evidence of the complainant, he has failed
to prove that, accused has committed an offence punishable u/s 138 of
the Act. Ld. advocate for the accused submitted that, accused is entitled
for acquittal. Consequently, point No. 2 and 5 are answered in the
“Negative”. Resultantly, following order is passed:
ORDER
1. The accused No. 1 Jai Prakash Dubey- Proprietor of
Accused No. 1 Maa Baglamukhi Group is hereby
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acquitted under Section 255 (1) of the Criminal
Procedure Code, 1973 for an offence punishable
under Section 138 of the Negotiable Instrument
Act,1881.
2. The bail bonds of accused stands canceled.
3. Muddemal being an original cheque and bank memo,
be returned to the complainant after appeal period is
over.
4. Accused is hereby directed to furnish personal bond
of Rs. 15,000/- and surety of like amount to appear
before Hon'ble Appellate Court, in case of appeal filed
by the prosecution, according to Section 437-A of the
Code of Criminal Procedure, 1973.
(Dictated & Pronounced in the open court)
Mumbai (Y. P. Pujari )
Date:- 24/08/2026 Judicial Magistrate (First Class)
48th Court, Andheri, Mumbai.
Dictated On : 24/08/2026
Typed On : 24/08/2026
Signed On : 24/08/2026
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