Final Order 2

Order Details: Copy  of Judgment
Pdf Text: (1) CC. No.4916/SS/2018 [Judg.]
CNR No.MHMM19-013679-2018
Received on : 10 12 2018
Registered On : 18 12 2018
Decided on : 19 09 2025
Duration : Y M D
06 09 09
IN THE COURT OF
JUDICIAL MAGISTRATE, FIRST CLASS
[63RD COURT, ANDHERI, MUMBAI]
[PRESIDED OVER BY SHRI. M. S. BUDHWANT]
C.C. No.4916/SS/2018
Exh.62
Sohil Mehta S/o. Kishor Bhai Mehta
The proprietor of V.K. Enterprise
Having his office at 4B/403,
Tarang, Asha Nagar,
Western Express Highway,
Borivali East, Mumbai-400 066. ...Complainant
Versus
1. Niti Chemicals
(Complaint dismissed
vide order dated 08/03/2019)
2. Vishal Patel
B-45, Pushpak Bunglows,
Near Smruti Mandir, Ghodasar,
Ahmedabad, Gujarat-380 050.
Also At
Mahalaaxmi Industries Unit-II,
Plot No.1087/1 & 2,
Ravi Industrial Estate,
Behind Prestige Hotel,
Bileswarpura, Post Chattral,
Tal-Kalol, Dist-Gandhinagar,
Gujarat-382 729. ...Accused
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CNR No.MHMM19-013679-2018
________________________________________________________
Advocate for Complainant : Shri. Amogh Patkar
Advocate for Accused : Shri. I. S. Mishra
________________________________________________________
J U D G M E N T
(Delivered on 19/09/2025)
The accused No.2 is facing trial for an offence
punishable under Section 138 of the Negotiable Instruments Act
(hereinafter referred to as the N.I. Act).
Brief facts of the complainant’s case are as follows:
2] Complainant is engaged in the business of supplying
and trading various kinds of chemicals and solvents to
customers all over India. The accused is the proprietor of M/s.
Niti Chemicals. Accused placed purchase orders for the supply of
materials/ chemicals i.e. Mono Chloro Acetic Acid and Acetic
Acid, vide email dated 24/04/2018 and 09/05/2018.
Accordingly, the complainant raised four invoices and sold,
supplied, and delivered material to the accused through RCS
Logistics and Surabhi Transport Pvt. Ltd. In order to discharge
part liability, the accused issued one cheque of Rs.12,98,000/-,
but it was dishonoured. Thereafter, the accused requested the
complainant to return said bounced cheque and issued fresh five
cheques bearing Nos.000029 dated 18/10/2018, 000030 dated
22/10/2018, 000031 dated 26/10/2018, 000032 dated
28/10/2018 for Rs.2,50,000/- each and cheque No.000034
dated 30/10/2018 for Rs.2,98,000/- in favour of the
complainant. The complainant deposited said cheques for
encashment with his banker i.e. Kotak Mahindra Bank Ltd.,
Andheri (E) branch. However, they were dishonoured with the
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remark ‘Stop Payment’ on 07/11/2018. Thereafter, on
12/11/2018, the complainant issued a demand notice to the
accused through an advocate by R.P.A.D. The notice was served
on the accused on 19/11/2018. Inspite of the receipt of notice,
the accused did not pay the cheque amount to the complainant.
Hence, this complaint.
3] After perusal of the complaint, verification
statement, and documents produced on record, a process was
issued against the accused No.2 for the offence punishable
under section 138 of the Act. In pursuance of the summons, the
accused appeared. The particulars of the offence was explained
to the accused vide plea at Exhibit No.9. The accused did not
plead guilty and claimed to be tried.
4] Complainant examined himself and led his evidence
as C.W.1 at (Exh.10). He has closed his evidence vide pursis
(Exh.59).
5] Complainant has relied upon the following
documentary evidence :
Documents Exhibit
GST Information 35 collectively
Email Copies 36 Collectively
Copies of invoices 37 to 40
Cheques 41 to 45
Cheque return memos 46 to 50
Demand notice 51
Postal receipts 52 collectively
Acknowledgment card 53
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CNR No.MHMM19-013679-2018
6] The accused No.2 has been absent for a long time.
Non-bailable warrants as well as a proclamation were issued
against him; however, he did not bother to remain present
before the Court and avail himself of the opportunity to explain
the circumstances appearing against him, nor did he put forward
his defence. Hence, vide order dated 24/07/2025, his statement
under Section 313 of Cr. P.C. was dispensed with.
7] Heard Learned advocate for the complainant. The
accused and his advocate are absent. No final argument was
advanced on behalf of the accused, despite sufficient
opportunities. Hence, by passing an order, his right to argue is
forfeited.
8] From perusal of the complaint and evidence as well
as argument advanced by the learned advocate for the
complainant, the following points arise for my determination,
and I have given my findings on them with the reason stated
below :
Sr.No POINTS FINDINGS
1 Does the complainant prove that the
accused issued disputed cheques in his
favour for discharging a legally
enforceable liability or debt?
Yes
2 Does the complainant prove that he
presented the cheques within the
prescribed period for encashment, and
they were dishonored for the reason
“Payment Stopped by Drawer”?
Yes
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3 Does the complainant prove that he
issued a statutory notice to the accused
within the prescribed period, and he,
inspite of receipt of it, failed to pay the
amount of the disputed cheques to him
within the stipulated period?
Yes
4 What order? The accused is
convicted.
R E A S O N S
AS TO POINT NO.1:
9] Section 138 of N.I. Act provides that the drawer of
the cheque is deemed to have committed the offence if, among
other ingredients, the following ingredients are fulfilled :
(i) The accused drew a cheque on an account maintained by him
with a banker for the payment of any amount of money to the
complainant.
(ii) The cheque is drawn for the discharge of the ‘whole or part’
of any debt or other liability. ‘Debt or other liability’ means a
legally enforceable debt or other liability.
10] To prove the allegation leveled against the accused,
the authorized representative of the complainant has led his
evidence vide affidavit of examination-in-chief (Exh.10). He has
relied upon documents filed along with the list (Exh.11). He has
reiterated all the contentions of the complaint in his affidavit.
He has stated that he is engaged in the business of supplying
and trading various kinds of chemicals and solvents to
customers all over India. The accused is the proprietor of M/s.
Niti Chemicals and he placed purchase orders with the
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complainant for the supply of materials/ chemicals i.e. Mono
Chloro Acetic Acid and Acetic Acid, vide e-mail dated
24/04/2018 and 09/05/2018. Accordingly, the complainant
raised four invoices and sold, supplied, and delivered material to
him through RCS Logistics and Surabhi Transport Pvt. Ltd. In
order to discharge part liability, the accused issued five cheques
in favour of the complainant. The complainant deposited the
said cheques for encashment with his banker, i.e. Kotak
Mahindra Bank Ltd., Andheri (E) branch. However, they were
dishonoured with the remark ‘Payment Stopped by drawer’ on
07/11/2018.
11] The Ld. Advocate for the complainant has submitted
that the oral evidence of the complainant is corroborated by
documentary evidence. The accused did not cross-examine the
complainant and therefore, the complainant's oral evidence
remained unchallenged. He has further submitted that the
complainant has proved his case against the accused. Lastly, he
submitted to convict the accused.
12] It is seen from the record that the accused did not
file any application for permission to conduct the cross-
examination of the complainant and also did not proceed with
the matter. Therefore, the complainant’s testimony in his
evidence affidavit remains unchallenged.
13] The present case is filed under Section 138 of N.I.
Act therefore, it is necessary to discuss the legal principle laid
down by the Hon’ble Apex Court in the case of Rangappa V/s.
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Sri Mohan [(2010) 11 SCC 441] wherein it has been held that,
“presumption provided under Section 139 of the N.I. Act is 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. It has also held that the standard of
proof for doing so is that of “preponderance of Probabilities”. It
has also held that if the accused is able to raise a probable
defence which creates doubt about legally enforceable liability,
the prosecution can fail. The accused can rely on the materials
submitted by the complainant in order to raise such a defence,
and it is conceivable that in some cases the accused may not
need to adduce evidence for his/ her own.
14] The Hon’ble Apex Court in the case of M/s.
Kalamani Tex and another V/s. P. Balasubramanian
[MANU/SC/0066/2021] has held that, “Section 118 and 139 of
N.I. Act mandates that once the signature of an accused on the
cheque is established, then the ‘reverse onus’ clause becomes
operative. It has also held that in such a situation, the obligation
shifts upon the accused to discharge the presumption imposed
upon him.
15] Section 139 of the N.I. Act provides that it shall be
presumed, unless the contrary is proved, that the holder of the
cheque received the cheque of the nature referred to in section
138 of the N.I. Act. for the discharge in whole or in part of any
debt or liability. In view of the section, it is incumbent upon the
court to presume that the cheque issued was in discharge of the
debt. The Negotiable Instruments Act lays down special rules of
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evidence and certain special presumptions and precludes certain
pleas being raised in particular circumstances. There is a
presumption under section 118 of N.I. Act that the consideration
has passed for the execution of Negotiable Instruments. Said
presumption is a rebuttable one. The accused can rebut the
presumption by putting his defence to the test of preponderance
of probability.
16] It is to be noted from the evidence that the accused
has not conducted the cross-examination nor denied his
signature on the disputed cheque. The statement of the accused
under Section 313 of Cr.P.C. has been discarded as per the order
dated 24/07/2025. After perusal of the cheques (Exh.41 to 45),
it appears that the name of the proprietor of M/s. Niti Chemicals
has been mentioned. It is not a disputed position that the
cheques (Exh.41 to 45) are of the accused's proprietorship firm
account and are signed by him. Thus, the complainant has
proved the first ingredient that the accused drew the disputed
cheques in favour of the complainant. Now, it is to be
ascertained as to whether the accused has given the said
cheques to the complainant for the discharge of any debt or
other legal liability.
17] As per the ratio laid down by the Hon’ble Apex
Court in the case of Rangappa and Kalamani Tex (supra) it is
settled position of law that standard for rebuttal of presumption
under Section 139 is of preponderance of probabilities and for
such rebuttal inference can be drawn not only from the material
brought on record by the parties, but also from the
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circumstances relied upon by them. The complainant in his
evidence affidavit stated that the accused is the proprietor of
M/s. Niti Chemicals and its GST number is IN/UIN
No.24AJEPP4496J1ZS. Accused placed purchase orders for the
supply of Mono Chloro Acetic Acid and Acetic Acid vide email
dated 24/04/2018 and 09/05/2018 to the complainant
company. In support of the oral evidence, the complainant has
filed on record copies of GST information (Exh.35) and
purchase orders, vide email at (Exh.36). It appears from the GST
information and purchase orders that the accused is proprietor
M/s. Niti Chemicals and he placed purchase orders with the
complainant for materials/ chemicals. The complainant further
stated in his evidence that the complainant raised four invoices
regarding purchase orders. In support of oral evidence, the
complainant filed four tax invoices (Exh.37 to 40) on record. It
is crystal clear from said invoices that the complainant supplied
the material/chemical to the accused as per the purchase orders
(Exh.36). He has further stated that for discharging said debt
accused issued five cheques for a total payment of
Rs.12,98,000/- towards supplied chemicals. In support of the
same, the complainant has filed five cheques (Exh.41 to 45). It
appears from cheques (Exh.41 to 45) that the accused issued
said cheques to the complainant for discharging his part legal
and enforceable liability. The accused has not conducted a cross-
examination of the complainant nor led any defence. Therefore,
the complainant’s oral and documentary evidence remained
unchallenged.
18] It appears from the oral as well as documentary
evidence led by the complainant and legal presumption that the
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accused issued the cheques in question for discharging his
legally enforceable part liability. Therefore, I hold that the
complainant has proved point No.1. Thus, I answer it as “Yes”.
AS TO POINT NO.2:
19] The complainant has deposed that he deposited the
cheques in question (Exh.41 to 45) for clearance with his banker
i.e. Kotak Mahindra Bank, Andheri East Branch, but they were
dishonored for the reason ‘Payment Stopped by Drawer’ on
07/11/2018.
20] It is opt to refer here Section 146 of the N.I. Act
which provides that the Court shall, in respect of every
proceeding under this Chapter, on production of a bank’s slip or
memo having thereon the official mark denoting that the cheque
has been dishonoured, presume the fact of dishonour of such
cheque, unless and until such fact is disproved.
21] It is a settled principle of law that the complainant
has to prove his case on his own legs. Contentions of the
complainant that the cheques were presented for encashment
and they were dishonoured for the reason ‘Payment Stopped by
Drawer’ remain unchallenged. His evidence on said aspect is
corroborated by cheque return memos (Exh.46 to 50).
Considering the date on the cheques (Exh.41 to 45), date of
deposit and date of return mentioned on memos (Exh.46 to 50),
it appears that cheques were deposited within the stipulated
period i.e. three months for clearance. It also appears from the
cheque return memos (Exh.46 to 50) that the cheques were
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dishonoured for the reason mentioned in the evidence of the
complainant, i.e. ‘Payment Stopped by Drawer’.
22] In view of the oral as well as documentary evidence
referred above, it is established that the cheques were presented
for encashment within the prescribed period and they were
dishonored for the reason “Payment Stopped by Drawer”.
Therefore, I answer point No.2 as “Yes”.
AS TO POINT NO. 3 :
23] The complainant has given evidence that he got
knowledge about the dishonor of the cheque on 07/11/2017. It
is his evidence that he issued a demand notice dated
12/11/2018 to the accused by R.PA.D. demanding the amount
of the cheque. He affirms that the notice was served on the
accused vide acknowledgment card (Exh.53) and in spite of
receipt of it, the accused failed to pay the amount of the cheques
to him within the stipulated period.
24] Section 138 clause (b) and (c) of N.I. Act prescribes
that, in order to constitute an offence under the section demand
notice for the payment of cheque amount should be given in
writing to the drawer of cheque by the payee within 30 days of
the receipt of information by him from the bank regarding the
return of the cheque as unpaid and the drawer of the cheque
fails to make the payment of the amount of money to the payee
within 15 days of the receipt of the notice.
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25] Oral evidence of the complainant, on the point of
issuance of notice to the accused, is substantiated by a copy of
notice at (Exh.51). His testimony that notice was sent by R.P.A.D
to the accused is corroborated by a copy of postal receipts
(Exh.52 collectively). His evidence that the accused received the
notice at his address is substantiated by the acknowledgment
card (Exh.53) on 19/11/2018.
26] Considering the date of getting knowledge of
dishonor of the cheques by the complainant and the date of
issuance of the demand notice by him, it appears that the notice
was given within the prescribed period of one month to the
accused. It appears that notice was duly served on the accused.
In view of the aforesaid discussion and legal position, I held that
the complainant has proved that he issued a statutory notice to
the accused within the prescribed period, and in spite of receipt
of it, the accused failed to pay the amount of the cheques to him
within the stipulated period. Therefore, I answer point No.3 as
“Yes”.
AS TO POINT NO. 4:
27] In view of the findings recorded against point Nos.1
to 3, I hold that the complainant has proved the essential
ingredients of section 138 of N.I. Act against the accused beyond
a reasonable doubt. Therefore, I find the accused guilty of the
said offence. I stop here my judgment to hear the accused on the
point of quantum of sentence.
Date : 19/09/2025
Shri. M. S. Budhwant
Judicial Magistrate, First Class
63rd Court, Andheri, Mumbai.
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28] Learned advocate for the complainant is present.
His advocate has submitted that the accused may be imposed a
heavy fine, and double the amount of the cheque may be
granted as compensation to the complainant. He further submits
that the accused may be sentenced to severe imprisonment.
29] The Accused and his advocate are absent. In order
to pass a sentence to the accused, he can be given an
opportunity. However, he is absent. He has not attended the
Court for long, and N.B.W. is pending against him. In view of
Section 143(3) of the N.I.Act, every trial under this section shall
be conducted as expeditiously as possible, and an endeavour
shall be made to conclude the trial within six months from the
date of filing of the complaint. There is no provision under
Chapter XX of the Code. to hear the accused on the point of
sentence as found in Section 248(2) of Chapter IXX of the Code.
However, all the mitigating factors in favour of the accused are
considered.
30] This court has considered the probability of
extending the benefit of 'Probation' to the accused. This offence
is an economic offence. Though it is a criminal trial, considering
the statement, objects, and reasons while enacting this
legislation, it is understood that the very object of the Act is to
enhance the credibility of transactions by cheque. The
complainant has already suffered the consequences of the
dishonor of the cheque. In this background, setting the accused
free on a bond of Probation will not meet the ends of justice.
Hence, this Court is of the opinion that this is not a fit case to
extend the benefit of Probation to the accused.
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31] Giving careful thought to the peculiar circumstances
of the case and the sentencing policy, the sentence should be just
adequate to have deterrence. The case has been dragged for
more than six years. The sentence of compensation alone would
not serve the purpose. In this background, the accused needs to
be sentenced to imprisonment for three months also. Total
amount of cheques is Rs.12,98,000/-. The cheques are of the
year 2018. Thus, I am of the opinion that the complainant will
be adequately compensated only if he gets twice the amount of
the disputed cheques.
32] Considering all these things, the amount of
compensation is determined as Rs.25,96,000/- vide Section
357(3) of the Code of Criminal Procedure. In default of payment
of compensation, a sentence of an additional one month
imprisonment is awarded. Thus, in answer to point No.4
following order is passed :
O R D E R
(1) Accused No.2 is convicted of the offence punishable
under section 138 of the Negotiable Instruments Act
vide Sec.255(2) of the Code of Criminal Procedure and
is sentenced to suffer simple imprisonment for three
months.
(2) He is directed to pay an amount of Rs.25,96,000/-
(Rupees Twenty Five Lakhs Ninety Six Thousand only)
within a month from today to the complainant as
compensation vide empowerment of Section 357(3) of
the Code of Criminal Procedure, 1973, in default of
payment of compensation, he shall suffer simple
imprisonment for an additional one month.
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(3) If the compensation amount is deposited, the whole
amount will be paid to the complainant after the appeal
period is over.
(4) He shall surrender his bail bonds.
(5) Issue a standing warrant against him.
(6) A copy of the judgment shall be given free of cost to the
accused after the execution of the warrant against him.
Date : 19/09/2025
Shri. M. S. Budhwant
Judicial Magistrate, First Class
63rd Court, Andheri, Mumbai.
Dictated on : 19/09/2025
Transcribed on : 19/09/2025
Signed on : 20/09/2025
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