138 Must Read Case Many Case Studies For Money Lending Acquital

Presented on : 02.02.2019

Registered on : 02.02.2019
Decided on : 30.03.2022
Duration : 28 : 01 : 03
DD:MM:YY
IN THE COURT OF THE METROPOLITAN MAGISTRATE,
06TH COURT, MAZGAON (SEWRI), MUMBAI
(Presided over by : A. S. CHONDE)
(BSL LLB LLM)
Exhibit
CNR No.MHMM120050332019
a) Serial number of case : 0603517/SS/2019
b) Date of commission of offence : 14.12.2018
c) Name of complainant : Yash Sunil Savla
Age 30 yrs.,
Occ. : Business
R/o. 301, Parsh Residency,
Mamlatdar Wadi, Road No.1,
Malad (W), Mumbai 00 064
d) Names of accused : Dhaval Vijay Karia
Age : Major
Occ. :
C/o. M/s. Viki Builders, 205, 2nd
floor, So Lucky Corner, 54, M.
G. Road, Vile Parle (E), Mumbai
400 057 AND
A/1, Ambar Apartment,
Chittaranjan Road, Vile Parle
(E), Mumbai 400 057.
e) Offence complained of and : Under section 138 of the

proved Negotiable Instruments Act.
f) Plea of the accused : Accused pleaded not guilty and
claimed to be tried.
2 Judgment in 0603517/SS/2019
g) Final order : Accused is convicted.
h) Date of final order : 30.03.2022
Appearance :
For complainant Adv. Hasmukh Shah
For accused Adv. Rahul Hande
JUDGEMENT
(Delivered on 30th day of March 2022)
1. The accused is being tried for the offence punishable under
section 138 of the Negotiable Instrument Act, 1881 (herein after
referred to as 'the N. I. Act').
2. In brief the case of complainant is as under:
The complainant knows accused. The accused had
approached him and other family members through finance broker and
represented that he required finance for his business and requested him
and other family members to advance some amount by way of loan for
his business. At that time, accused had also assured him and other
family members that he will repay the loan amount on demand.
Relying on his said assurance and representations on 11.08.2014,
complainant had advanced to the accused by way of loan a sum of Rs.5
lakhs and actually paid the said amount to the accused by a cheque
No.217126 through his bankers, The Saraswat Coop. Bank Ltd., Orlam,
Malad (W), branch, Mumbai. Upon receipt of the said amount, accused
has signed and executed a demand promissory note in his favour to that
effect there by acknowledging the receipt of aforesaid a amount and at
the same time, in discharge of his aforesaid liability and towards
repayment of the aforesaid loan, accused had signed and issued a

cheque bearing No.087519 for Rs.5 lakhs dated 03.12.2018 drawn on
Union Bank of India, Vile Parle (E), branch Mumbai when the said
cheque was presented in the bank of complainant, the said cheque was
returned with return memo dated 14.12.2018 with endorsement “funds
insufficient”.
3. The complainant sent statutory notice dated 20.12.2018 by
registered post A.D. through advocate calling upon the accused to pay
the said cheque amount within stipulated period, said notice was sent to
the accused by RPAD at the given address. Notice sent to the accused
by RPAD at the given addresses have been duly received to the accused.
In spite of receipt of the said notice and in spite of giving an
opportunity to pay the said cheque amount, accused has neither paid
the said cheque amount nor replied to the said notice.
4. By order dated 14.02.2019 my Learned Predecessor issued
process against accused.
5. After appearance accused pleaded not guilty and claimed
to be tried, when particulars of the offence complained of were read
over and explained to him in vernacular by my Learned Predecessor
vide Exh.8.
6. The statement of accused under section 313 of the Code of
Criminal Procedure, 1973 was recorded by predecessor vide Exh.30,
accused submitted that, the complainant is inconnivance with the
broker, procured the blank signed promissory note, blank signed cheque
and blank signed confirmation and has misused against him to file the
wrong complaint. If the cheque is bounced in his account, the broker
had assured him that, no complaint shall be filed against him. He had
never seen the complainant till the time he appeared in the Court. The
complainant has filed false complaint against him and deposed falsely.

7. Heard learned advocates for both the sides. The learned
advocate for the complainant has argued the case and relied some
citations of Hon'ble High Court and Hon'ble Supreme Court. The
advocate of the accused has also argued matter at full length and relied
on so many citations of Hon'ble different High Courts and Apex Court.
On going through the evidence, cited case laws and material placed on
record, following points arise for my determination & I have recorded
my findings thereon for the reasons given below :
Sr. Points Findings

No.
1 Whether the complainant proves that
the accused issued cheque exh.11 of No.
087519 or Rs.5 lakhs dated 03.12.2018
drawn on Union Bank of India, Vile Yes..
Parle (E), branch Mumbai for discharge
of legal enforceable debt or liability ?

the cheque was presented within a Yes..
prescribed period and it was
dishonoured for the reason “funds
insufficient” ?
3 Whether the complainant proves that he
has issued demand notice in written to Yes..
the accused within stipulated period and
it was served on him ?
4 Whether complainant proves that

accused failed to repay the cheque Yes..
amount within 15 days of receipt of
notice ?

the accused has committed offence Yes..
punishable u/s 138 of Negotiable
Instruments Act 1882 ?
6 What order ? Accused is convicted

as per final order.
REASONS
8. In order to prove its case, complainant has examined
himself below Exh.9. He has reiterated all the facts of complaint in his
affidavit of examinationinchief. Complainant has also relied upon
following documents :
i) Promissory note Exh.11
ii) Certificate Exh.12
iii) Undertaking Exh.13
iv) Cheque Exh.14

v) Memo Exh.15
vi) Notice Exh.16
vii) Postal receipts Exh.17 & 18

viii) Acknowledgments Exh.19 & 20
By way of filing pursis Exh.29 the complainant closed his

evidence.
9. Accused has examined himself vide Exh.37A and xerox

copy of bank passbook at Exh.38, complaint given to police station at
Exh.39, track report at Exh.40 & postal receipt at Exh.41. By way of
filing pursis Exh.42 accused closed his evidence.
As to point Nos.1 to 5 :
10. As far as presentation of cheque within its validity period
and dishonour is concerned it has not been disputed by the accused at
all. Moreover, complainant has placed on record original cheque at
Exh.14 and cheque return memo at Exh.15 proved that cheque dated
03.12.2018 was presented and dishonoured on 14.12.2018 for the
reason “Funds Insufficient” wich is sufficient to held that cheque was
presented within its validity period which got dishonoured.
11. As far as issuance notice and its service is concerned,

accused has not denied service of notice. On the contrary, while
recording statement u/sec. 313 of Code of Criminal Procedure he
admitted to have received the notice. Moreover, complainant has also
placed on record demand promissory note Exh.11, certificate Exh.12,
confirmation of loan and undertaking Exh.13, office copy of notice
Exh.16, postal receipts Exh.17 & Exh.18 and acknowledgment cards
Exh.19 & Exh.20. On the basis of such evidence it can be said that
complainant has complied with the requirement of Section 138 (b) of
Negotiable Instrument Act.
12. Now the only question remains to be decided is that

whether cheque in question was issued for discharge of legal liability or
not. It is a well settled position of law that when a negotiable
instrument is drawn, two statutory presumptions arise in favor of the
complainant, one under section 139 of N. I. Act and another under
section 118 (a) of the N. I. Act. Further, the court will presume a
negotiable instrument for consideration unless and until after
considering the matter before it, it either believes that the consideration
does not exist or consider the nonexistence of the consideration so
probable that a prudent man ought under the circumstances of the
particular case to act upon the supposition that the consideration does
not exist. For rebutting such presumption, what is needed is to raise a
probable defense. In the present case, the accused has admitted his
signature. As has been observed by the Hon'ble Supreme Court in
Rangappa V/s Sri Mohan that, "Once the cheque relates to the account
of the accused and he accepts and admits the signatures on the said
cheques, then initial presumption as contemplated under section 139 of
the Negotiable Instruments Act has to be raised by the Court in favour
of the complainant."
13. In the case of K. N. Beena V/s Muniyappan the Hon'ble

Supreme Court has observed as follows – "Under section 118 of N.I. Act
unless the contrary was proved, it is to be presumed that the Negotiable
Instrument (including a cheque) had been made or drawn for
consideration. Under section 139 of N. I. Act the Court has to presume,
unless the contrary was proved, that the holder of the cheque received
the cheque for discharge, in whole or in part, of a debt or liability. Thus
in a complaint under section 138 of N. I. Act the Court has to presume
that the cheque had been issued for a debt or liability. This presumption
is rebuttable. However, the burden of proving that a cheque had not
been issued for a debt or liability is on the accused".
14. Keeping in mind the above principles of law and scrutiny of
facts, it appears that in the case at hand also accused has not denied his
signature on the cheque in question. Therefore, it has to be presumed
that cheques were issued towards discharge of legal liability. Now it
has to be verified whether accused is able to rebut that presumption or
not.
15. The complainant has filed his affidavit as per Exh.9 and

stated as per the contents of the complaint. Complainant has stated
that, accused had approached him through a broker and requested
complainant and his family members for advancement of loan, to which
complainant has advanced Rs.5 lakhs on 11.08.2014 by cheque bearing
No.217126 to the accused. Accused also had assured that he would
repay the said loan. Complainant further deposed that accused paid
interest on the said advancement loan till March 2016. The accused
had also executed promissory note in favour of the complainant. The
complainant has filed on record certificate showing that accused
obtained amount given by the complainant. The accused has issued the
cheque in favour of the complainant. However, the said cheque has
been dishonoured. In spite of service of statutory notice, accused failed
to repay the advance loan. In order to support his affidavit,
complainant has filed on record demand promissory note dated
11.08.2014 at Exh.11, certificate of Saraswat Cooperative Bank at
Exh.12. The complainant has filed another confirmation letter at

Exh.13 and disputed cheque at Exh.14. The documentary evidence
shows that complainant had given Rs.5 lakhs to accused on 13.08.2014.
The evidence of the complainant is also supported by cheque return
memo Exh.15, notice, postal receipts and acknowledgments. In spite of
service of demand notice, accused failed to repay the amount. The
complainant has not examined any other person to support his case.
16. So far as defence of the accused, it appears that he has

flatly refused case of the complainant. The accused has brought his
defence on the record through crossexamination of the complainant
and by leading his evidence. Moreover, accused has also relied on some
documentary evidence. On perusal of the crossexamination of the
complainant, it has been brought on record that, complainant and his
family members i.e. father, mother have filed various cases as per the
provisions of N. I. Act against the other persons like accused. So also it
also has been brought in the crossexamination of the complainant that,
complainant and his family members took the interest on so many
persons to whom they have paid loan amount and such interest is not
shown in the income tax return. It also has been brought during the
crossexamination of the complainant that, complainant and his family
members used to give loan to persons by obtaining promissory notes,
confirmation letter and cheque from the concerned persons. Moreover,
complainant has admitted in crossexamination that he and his family
members are not having money lending licence.
17. It is pertinent to note that, it has been brought in cross
examination of the complainant that complainant has not mentioned
name of the broker in complaint, demand notice and affidavit. The
complainant further admitted that in exhibit – 13, there is writing in
different inks. It was also asked to the complainant that blank signed
promissory note, confirmation letter, cheque were fabricated by the
complainant and filed false complaint against the accused, to which
complainant denied the same. It was also asked to complainant that
disputed cheque was lying with the complainant as security to which
complainant denied.
18. If evidence of the accused as per exhibit 37 is perused, it
reveals that he was in need of some amount, so he approached to
broker Mr. Nilesh Bharani who agreed to raise funds for him. The
evidence of the accused further shows that for security purpose he has
handed over blank signed cheques, blank signed promissory notes to
broker Nilesh Bharani. He further deposed that, he got Rs.5 lakhs from
complainant Yash Sunil Sawla through broker and the broker had
handed over the said blank signed promissory note and blank signed
cheques to the complainant. So far as this evidence of the accused is
concerned, one fact is clear that the complainant paid Rs.5 lakhs
through cheque to the accused through broker. The accused has not
stated before the court the date when he received the loan from
complainant. So also accused has not strongly led evidence that, he did
not take the loan on 11.08.2014. The complainant has filed on record
documentary evidence which shows that on 11.08.2014, the
complainant has given Rs.5 lakhs to the accused through broker Nilesh
Bharani.
19. From crossexamination of the complainant and evidence of the
accused and documentary evidence, one fact is clear that complainant
has paid the amount to the accused on 11.08.2014. Moreover, accused
has admitted in his crossexamination that on 11.08.2014, amount of
Rs.5,00,000/ has been credited to his account from the account of the
complainant. Moreover, the accused has further admitted in his cross
examination that, he has paid interest to the complainant through
broker up to March 2016. So also accused has admitted that till today
he has not repaid the amount of Rs.5,00,000/ to the complainant.
These material admissions of the accused show that accused paid
interest of the disputed loan amount till March 2016. The evidence of
the complainant shows that accused paid interest on the loan amount
till March 2016. The evidence of the accused does not show if accused
has paid interest on the said loan amount till depositing the disputed
cheque in the account of the accused on 14.12.2018. The evidence of
the accused does not show that inspite of giving interest on the
advanced loan to broker or the complainant till 14.12.2018 the
complainant and broker have misused the said blank signed cheque and
other promissory note.
20. At one hand accused admits that as broker made available the
advance loan on the interest to him and he handed over said documents
i.e. blank signed cheque, promissory note to the broker, it means
accused was having knowledge that till repayment of the advanced
loan, he has to repay the interest on it. At other hand, the evidence of
the accused is that the complainant has misused the said blank signed
promissory note and blank signed cheque. When the said blank signed
promissory note and blank signed cheque could be said to be misused, if
inspite of payment of interest on the advanced loan amount and
repayment of loan amount is made to the complainant by the accused
prior to depositing the cheque for encashment but accused has not led
evidence that he paid interest on the loan amount till depositing the
cheque contrary he admitted in crossexamination that he only paid

interest till March 2016 and he has not repaid the said advance amount
of loan to the complainant. These are inconsistent defences of the
accused on record.
21. It is pertinent to note that, as per evidence of the accused,
at the time of taking advanced loan, blank signed promissory note and
blank signed cheque were given as security purpose. If it is so then,
accused should have led evidence as to when the said blank promissory
note and blank signed cheque were to be used by the broker or
complainant. So also evidence of the accused does not show as to why
accused has not filed complaint with police station against misuse of the
above said documents till 2020. So also accused has not led evidence as
to why he did not make inquiry with broker till 2018 to 2020 about
illegal money lending business. The record shows that accused has
taken advance loan amount and he used the said amount from year
2014 to onwards period. Accused has also admitted that he has paid
interest on the advance loan amount till 2016. But accused has not led
any evidence as to what happened of the advance loan from year 2016
to till the filing of the complaint. Moreover there is no evidence from
accused to show that as to why he stopped to pay interest on loan
amount after year 2016.
22. It is surprising to note that, accused led evidence that he does not
know the complainant, he took money from broker Bharani and he has
handed over the said documents to broker. From this fact, one fact is
clear that accused relied on the words of broker Bharani that, he would
not misuse the documents. If it is so, as to why accused did not intend
to examine the said broker. If broker would have been examined by
accused, it would have come on record what were actually decided to
be done among himself, accused and complainant at the time of
advancement of loan amount.
23. Moreover, accused has not led evidence that, he only took
advancement of loan for period i.e. till March 2016. Accused has also
failed to show that he intended to repay the advancement of loan and
interest on it to broker or complainant and complainant did not intend
to take back advancement of loan and interest, whereas the broker or
complainant misused the documents of the accused which were given
for security purpose. The accused has not brought evidence on record
whatever terms and conditions of their transaction of the advancement
of loan to which broker, complainant breached their terms and
conditions. For the moment, if claim of the accused is held to be true
that broker and complainant have misused his cheque, it would have
been held to be probable, if accused has given the complaint to police
station after year 2016 & prior to 2018. But accused did not do so. The
evidence of the accused shows that he was in need of money, so he
went and took the disputed cheque amount and paid interest on it but
there is no evidence from accused on what grounds, complainant and
broker misused said cheque. The plea of the accused that documents
kept for the purpose of security of the advancement of loan were
misused and they were fabricated by the complainant and broker
appears to be not probable in absent of substantial evidence by him.
24. The advocate of the accused has submitted that, complainant

witness No.1 has admitted in crossexamination that, he has given such
amount to many persons on the interest and he, his family members do
not have valid money lending licence. If a person doing illegal act, such
transaction is not enforceable as per section 23 of the Indian Contract
Act. Hence, he vehemently submitted that, complainant does illegal
money lending business, so cheque given for illegal transaction is not
enforceable by law. Therefore, he relied on Giridhari Parmanand
Motiani Vs. Vinayak Bhagwan Kavnekar dtd.14.08.2015, in the said
case complainant was doing illegal money lending business, the defence
of the accused was the same. The complainant stated that, loan is
advanced as per section (f) of subsection (9) of section 2 of the
Bombay Money Lenders Act 1946, the trial Court held that the said
transaction is not on the basis of Bill of Exchange, cheque, so acquittal
of the accused was confirmed by Hon'ble Bombay High Court. In the
case in hand, complainant advanced loan on the basis of promissory
note as well as on the basis of disputed cheque. Hence, with due
respect of Hon'ble High Court above case is not helpful for the accused.
Pradeep Bhuta Vs. State of Maharashtra dtd.23.06.2008, in which
accused had borrowed Rs.90,000/ from the complainant, accused to
discharge the liability issued cheque of Rs.90,000/ to complainant.
During evidence, it was found that complainant was doing illegal
money lending business. In the case in hand, the advanced loan does
not come in definition of Maharashtra Money Lending Act 2014, as
disputed amount exceeds Rs.3,00,000/ and cheque was given against
disputed amount, therefore the above case is not helpful for the
accused.
25. The advocate of the accused further relied on Mr.

Tarachand Jain Vs. Mrs. Subhadra Kurleskar dtd.30.06.2008, the
case of the complainant was that, he does money lending business and
has valid licence, but he failed to bring on record, so acquitted of the
accused was confirmed by the Hon'ble Bombay High Court. So also
Guruchand Pawchard Vs. Swapnil dtd. 26.09.2011, acquittal was

confirmed. However, in the case in hand, it is not plea of the
complainant that, he has licence for money lending business. So with
due respect of the Hon'ble High Court above cases are not helpful for
the accused. So also advocate of the accused has further relied on Sou.
Meena Rajendra Deore Vs. Shri. Narendra Benait dtd. 24.11.2006,
there was hand loan transaction, the complainant has admitted that
money given to persons is maintained in writing but she failed to show
it, in the said case plea of the accused was that he repaid amount. So
acquittal was confirmed by the Hon'ble Bombay High Court. But in the
case in hand, there is no plea of the accused that, he repaid the
advanced loan amount to complainant. Moreover, in case Harish
Dubey Vs. Shyam Steel Centre dtd.29.04.2008, complainant did not
produce copies of income tax return in respect of alleged transaction.
Their acquittal was confirmed. So with respect of Hon'ble Bombay High
Court, above cases are not helpful for the accused. The Hon'ble
Bombay High Court in case of Bipin Mathurdas Thakkar Vs. Sameer
Desai 2015 (1) B. C. R. page No.601 it has been held by the Hon'ble
Bombay High Court that though transaction is not disclosed in income
tax return, the case of the complainant cannot be said to be fatal.
Moreover, reliance of the accused on Ghanshyam D. Katariya Vs.
Sanjay J. Gautra dtd.07.12.2015, there was issue of money lending
business and accused had brought evidence of the repayment of the
loan amount, therefore acquittal was confirmed but in the case in hand
there is no contention of the accused that, he repaid the amount. So
with due respect of Hon'ble High Court above cases are not helpful for
the accused.
26. The accused has further relied on Sanjay Yadhavrao

Makode Vs. Suhas Dhate dtd.10.01.2018, there was issue of attract of
presumption under section 118 (a) & 139 of N. I. Act. In the said case
complainant had failed to prove as to when and how hand loan was
given to the accused. During the crossexamination of the complainant,
it had come on record that cheque was issued for another transaction.
In the case in hand, there is no situation as in the above case. So with
due respect of the Hon'ble High Court Bombay, above case is not useful
for the case for the accused. He also relied on Pandurang s. Salim
dtd.04.08.2008, in the said case, complainant had filed various civil
cases against different persons and complainant was held to be money
lender and acquittal was confirmed. As discussed in the above case, the
amount given in the case in hand is more than Rs.3 lakhs i.e. against
cheque, so with due respect of the Hon'ble High Court, above case is
also not helpful for the accused.
27. The accused has further relied on Anjana Thadani Vs.

State of Maharashtra dtd.06.05.2009, Ganesh Badwaik Vs.
Lokchand Bondre, Shantaram Sature Vs. State of Maharashtra
dt.15.11.2019, in which the Hon'ble Bombay High Court held that, non
producing of money lending licence, admissions by the complainant of
having given money to different persons, cheque is given as guarantee,
the acquittal of the accused is only to be result. As discussed in earlier
paras, in the case in hand, the transaction in the case in hand is more
than Rs.3 lakhs, so provisions of the Money Lending Act are not
applicable to the transaction in the case in hand. Hence, with due
respect of the Hon'ble Bombay High Court, above cases are not helpful
for the accused.
28. The advocate of the accused has submitted that,

complainant has suppressed some material fact and withheld material
documents which are beneficial to the accused. As per his submission,
if cheque is issued to complainant on 11.08.2014, there is no value to
demand promissory note at Exh.14. If there is post dated cheque
dtd.03.12.2018, then there is no value to demand promissory note.
Moreover, there is no date appearing in exhibit – 13 i.e. confirmation
letter. There is no mention of post dated cheque in exhibit – 13.
Hence, issuing of confirmation letter by accused to complainant is
doubtful. The complainant has suppressed this fact. The advocate of
the accused has submitted that all these documents are false, forge
documents. He also pointed out that disputed cheque is filled in
different ink & complainant did not examine scriber. C.W. No.1 has
admitted that cheque is filled indifferent inks. So therefore he relied on
the case of K.K. Divakaran Vs. State of Kerala dtd.09.09.2016. He
also relied on Umakant Giridharrao Shirure Vs. Balasaheb Gyanoba
Gayakwad dtd.03.02.2018 & Anjana Jairam Thadani Vs. State of
Maharashtra dtd.06.05.2009, to show that cheque is given for the
security purpose when complainant is not friend of the accused.
29. So far as reliance of the citations by the advocate is

concerned, in the case of K. K. Divakaran dtd.09.09.2016 some
material facts were suppressed by the complainant in statutory notice at
exhibit – 4. As per evidence of complainant witness (she) Exh.I is
signed by revisionary petitioner at her residence on 14.09.1998 and on
the same date Exh.8 undertaking also was executed by the revision
petitioner. The complainant further stated that, he went to purchase
stamp paper on the same dtd.14.09.1998 & writing was reduced on
Exh.8. The complainant has seen revision petitioner signing it. The
stamp paper shows that it was purchased on 09.09.1998, five days prior
to 14.09.1998. This itself shows that it was written upon a signed blank
paper. In the said case, Scriber (P.W. No.2) was also examined. In the
said complaint, complainant stated the revision petitioner wrote Exh.8
where P.W. No.2 (Scriber) stated that he wrote exhibit – 8. On all these
different grounds, the Hon'ble High Court held that this inconsistency in
the evidence is sufficient to hold acquittal of the accused. However, in
the case in hand, there is no such major inconsistency in the evidence of
the complainant. There is no inconsistency about the documents, so
with due respect of Hon'ble High Court Kerala, above case is not helpful
for the accused.
30. In respect of with holding documents, accused has relied
on Gopal Ketkar Vs. Mohd. Haj dtd.19.04.1968, in the said case it
was held that, the effect of with holding material documents, however
in the case in hand, the presumption are there, with holding document
like confirmation letter can't be said to be so material. Therefore, with
due respect of the Hon'ble Apex Court above case is also not helpful for
the accused. So far as submission of the accused is concerned, the
complaint does not show about the confirmation letter of the loan,
however that cannot be ground to discard the case of the complainant.
The accused should prove that how the said confirmation letter bears
his signature. The accused has not specifically denied his signature on
the said confirmation letter. In the case of Umakant Shirure Vs.
Balasaheb Gaikwad dtd. 03.02.2018, it has been held by the High
Court if complainant admits in crossexamination that, he does not
know the name of person who has written his name in cheque, the
defence of the accused is probable. However, in the case in hand,
complainant has not given such admission stated in the above case.
Hence, with due respect of Hon'ble High Court, the case is not helpful
for the accused. Moreover, as per recent view of the Hon'ble Apex
Court in respect of giving cheque for security purpose is liable to be
enforceable, so the case of Anjana Jairam Thodani (cited supra) is not
helpful for the accused.
31. The advocate of the accused has relied on Case of S. Gopal
Vs. D. Balchandra dtd.22.01.2008, in the said case, application u/s.45
of the evidence was filed by accused to determine the age of the ink of
signature, so trial court had rejected the said application, but the
Hon'ble High Court held that if accused denied his signature on the
disputed cheque so such application is required to be allowed and
opinion of expert is necessary. However, in the case in hand, there is no
question of signature on the disputed cheque. So with due respect of
the Hon'ble Court, it is also not helpful for the accused.
32. The case of the complainant is that, accused approached
him and his other family members through finance broker for
advancement of loan and he agreed that he would repay amount.
Therefore, complainant paid the advancement of loan to accused on
11.08.2014 Rs.5 lakhs by cheque No.217126 of his bank i.e. The
Saraswat Coop. Bank Ltd., Orlam Malad. Moreover, complainant
stated that the said fact in his evidence. The evidence of the
complainant further shows that after giving advancement of the loan to
accused, accused executed demand promissory note, confirmation of
the letter of the said amount in his favour and to discharge his liability
issued disputed cheque. Therefore, accused paid interest on the said
loan amount till March 2016. So far as these contentions and evidence
of the complainant are concerned, complainant has filed on record
demand promissory note dtd.11.08.2014, there is certificate of the

account of the complainant bank i.e. Saraswat Coop. Bank at Exh.12 to
show that the said amount has been honoured on 13.08.2014 in
account of accused, so also there is exhibit – 13, it is confirmation of the
loan and undertaking, which does not bear date, it is for 90 days
or/month of demand, the disputed cheque.
33. So far as above documents and evidence of the

complainant is concerned, advocate for the accused submitted that,
whatever above documents were given, those were misused by the
complainant. When there is such inconsistency and there is no certainty
about the period for which advancement of loan was given on interest,
the complainant can be said to have failed to prove his case. Hence,
advocate of the accused relied on B. P. Venkatsalu Vs. K. P. Mani
Nayar dtd.28.11.2000, in the said case, there was one vital discrepancy
which seriously reflected the complainant's version. In the said case,
transaction arose on the date of issuance of cheque Exh.14
dated.14.12.1990. As per one of the clause of agreement Exh.6 dated
14.08.1987, that accused was granted time of years to repay the
alleged loan amount of Rs.1,50,000/ to the complainant. The liability
of the accused to repay the said amount was to arise after expiry of four
years as mentioned in agreement, which was to expire on 13.08.1991.
The further case of the complainant that post dated cheque Exh.11
bearing the date 14.12.1990 which is contrary to the clause of the
agreement. So also in the said case, the cheque amount did not include
interest amount, there is no proper explanation by complainant as to
exclusion of the interest amount, so also complainant has admitted in
crossexamination as type written afresh by erasing the earlier figure for
the month appearing in the original date, exhibit 11 was tampered,
there was no record by the complainant to show that after time of

giving amount, he had so much amount to pay to the accused.
Therefore, acquittal of the accused was confirmed. But in the case in
hand, there is no such discrepancy about the period for which loan
amount was advanced. So also there is no overwriting and erasing on
the documents in the case in hand. As per section 20 of the N. I. Act,
negotiable instruments given to persons, they will have right to fill the
said instrument. Therefore, such promissory note and cheque given by
accused cannot be said to be illegal.
34. So far as contention, evidence, documentary record is

concerned, the advocate of the complainant has relied on M/s. Ashok
Commercial Enterprises and another Vs. Parekh Aluminex Limited
dated 24.02.2014, it has been held by the Hon'ble Bombay High Court
that there was issue whether the suit is for recovery of the loan. In the
said case, cheques were issued towards refund of the loan. A loan
advanced against a negotiable instrument is in terms exempted from the
application of the said Act. The leave to file appeal was granted to
defendant. This case being of the civil nature, the said case is not
helpful for the complainant.
35. Moreover, the learned advocate of the complainant has

submitted that advancement of loan given against negotiable
instrument does not come in the definition of the loan under the
Maharashtra Money Lending (Regulation) Act, 2014 clause A sub
section 13 of section (2). Hence he relied on the Mour Marbles
Industries Pvt. Ltd. Vs. Metilal Laxmichand Salecha – HUF
proprietor of M/s. Mala Investments through its Karta Motilal
Laxmichand Salecha and others dated 11.06.2018, Hon'ble Bombay
High Court held that, once the amount as lent is not a loan within the
meaning of section 2 (13) (i) of the Maharashtra Money Lending Act
2014. Therefore, provision of the Maharashtra Money Lending Act are
not applicable to the case in hand, as a loan was advanced on cheque.
36. In the said case, plea of the accused was that complainant
did not fulfill the terms of agreement, therefore liability does not arise
in favour of the complainant. The Hon'ble Apex Court held that in such
case, it is not necessary for the complainant to produce documents and
held that case was founded on the dishonour of the two cheques and
not the basis of agreement. Further it was held by the Hon'ble Apex
Court, the said case was not civil suit, which was filed on the agreement
or any demand was raised for money on the ground that the agreement
has been fulfilled. The case is that payment was not released, therefore
accused was convicted.
37. The accused has also relied on Additional Director Export
Agency Vs. Devi Marine Exports Pvt. Ltd., in which Hon'ble Madras
High Court the effect of section 114 is to make it clear that the courts
and justice are to use their common sense & experience in judging the
effect of particular facts. A presumption in itself is no evidence, it only
makes out prima facie case for the party concerned, it is rule concerning
evidence. However, in the case in hand, the presumption have been
specifically provided by the special Act. Therefore, there is no question
of presumption u/s.114 of Indian Evidence Act. He has also relied on S.
K. Jalal Vs. State of Goa dtd.01.07.2017, Hon'ble Panji and Goa High
Court held that in the said case, presumption u/s.118 & 139 of the N. I.
Act is subject to rebuttal. There is not expected to prove defence to
extent of reasonable doubt.
38. In the said case, the complainant has proved the fact that
he has paid Rs.5,00,000/ to the accused as advancement of loan. The
accused has given the said disputed cheque for discharge of the liability.
The evidence of the complainant shows that complainant has deposited
the disputed cheque within time. So also the said cheque is
dishonoured. The complainant has proved that as cheque has been
issued, he issued statutory demand notice within statutory period on
address of accused, in spite of service of the notice on the accused, he
failed to deposit advancement of the loan. Therefore, complainant has
filed above complaint.
39. The accused has failed to rebut the presumption in favour
of the complainant. The accused has taken plea of money lending
transaction if it is so, then he has not denied of giving of interest to the
complainant. If accused was knowing that complainant does business
of advancing loan illegally, then as to why accused approached to
complainant for taking loan. The accused acted illegally knowing it to
be legal, then how he can correct himself by taking such plea that
complainant is doing illegal money lending business and he is being
exploited by him. Moreover, accused has not stated what was base of
taking the amount from complainant. Hence, what evidence accused
has brought during crossexamination of complainant and his own
evidence which is not sufficient to rebut the presumption in favour of
the complainant as per section 118 & 139 of the N. I. Act.
40. Moreover, in respect of giving blank cheque, the ratio of
Hon'ble Apex Court in case of K. J. Shaji Vs. Thoda puja of 2018. ALL
M.R. it has been held by the Hon'ble Apex Court that, when a person
gives undated cheque gives authority to fill the blank cheque.
Considering all these aspects I come to the conclusion that accused

failed to rebut the presumption. Consequently, I recorded my findings
to point Nos.1 to 5 in affirmative.
As to point no. 6 :
41. In view of the affirmative findings recorded to the point
Nos.1 to 5 accused is liable for conviction of the offence punishable u/s.
138 read with 141 of Negotiable Instrument Act vide 255(2) of Code of
Criminal Procedure. So I stop here to hear the accused on the point of
quantum of punishment.
Digitally signed by ANANDA
SHESHERAO CHONDE
Date: 2022.03.30 17:38:56
+0530
(A. S. Chonde)
Mumbai Metropolitan Magistrate,
th
Date : 30.03.2022 6 Court, Mazgaon (Sewri), Mumbai
42. Heard learned advocate for complainant and defence

counsel. The learned advocate for the complainant submitted that,
maximum sentence and fine be imposed on the accused. Advocate for
complainant has prayed to punish the accused to maximum extent and
also to take compensation and impose fine. The learned defence counsel
prayed for leniency. Advocate of the accused has submitted that,
accused is only person looking after the family and he has old aged
mother, wife and child so he prayed for lenient view. He also prayed for
minimum fine and punishment be imposed to him.
43. As per provision, the punishment for offence punishable

under section 138 of N.I. Act is up to one year imprisonment or with
fine which can be twice to the amount of cheque. The punishment
provided in Section 138 of N.I. Act cases are meant to ensure payment
of money and threat of jail is only to ensure recovery as such,

imposition of jail sentence is not mandatory. In the case at hand, the
case of the year 2018 and transaction took place in the year 2018, near
about three and half years have been lapsed. It would be proper to
impose sentence for one year and compensation.
44. In the circumstance of the case and considering the source

of income of accused and his responsibilities I feel that sentence to
undergo simple imprisonment for the term of one year and direction to
pay compensation of Rs.10 lakhs to the complainant in default to
undergo simple imprisonment for three months would be just, proper
and would meet the ends of justice. In view of Hon'ble Apex Court in
Vijayanan ..Vs.. Sadanandan, whenever accused is directed to pay
compensation to the complainant U/s 357 (3) of Cr.P.C., there should
be clause of default of sentence. In the result I proceed to pass the
following order.
ORDER
i) Accused Dhaval Vijay Karia is hereby convicted for

the offence punishable under section 138 of the
Negotiable Instruments Act,1882 vide sec. 255(2) of
the Code of Criminal Procedure.
ii) Accused is sentenced to suffer simple imprisonment of
one year.
iii) Accused is directed to pay to the complainant

compensation to the tune of Rs.5,00,000/ (Five
lakhs) in default, the accused to undergo Simple
Imprisonment for three months.
iv) The amount of compensation shall be paid to the

complainant on due verification after the appeal
period is over.
v) Accused to surrender his bail bonds.
vi) Copy of this Judgment be supplied free of costs to the
accused.
Digitally signed by
ANANDA SHESHERAO
CHONDE
Date: 2022.03.30 17:38:43
+0530
(A. S. Chonde)
Mumbai Metropolitan Magistrate,
Date : 30.03.2022 th
6 Court, Mazgaon (Sewri), Mumbai
upk/
Typed on : 30.03.2022
Signed on : 30.03.2022

138 Must Read Case Many Case Studies For Money Lending Acquital

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Presented on : 02.02.2019

e) Offence complained of and : Under section 138 of the

repayment of the aforesaid loan, accused had signed and issued a

Sr. Points Findings

2 Whether the complainant proves that

4 Whether complainant proves that

5 Whether the complainant proves that

6 What order ? Accused is convicted

iii) Undertaking Exh.13

iv) Cheque Exh.14

vii) Postal receipts Exh.17 & 18

By way of filing pursis Exh.29 the complainant closed his

9. Accused has examined himself vide Exh.37­A and xerox

11. As far as issuance notice and its service is concerned,

12. Now the only question remains to be decided is that

13. In the case of K. N. Beena V/s Muniyappan the Hon'ble

15. The complainant has filed his affidavit as per Exh.9 and

Exh.12. The complainant has filed another confirmation letter at

16. So far as defence of the accused, it appears that he has

cheque contrary he admitted in cross­examination that he only paid

24. The advocate of the accused has submitted that, complainant

25. The advocate of the accused further relied on Mr.

Guruchand Pawchard Vs. Swapnil dtd. 26.09.2011, acquittal was

26. The accused has further relied on Sanjay Yadhavrao

27. The accused has further relied on Anjana Thadani Vs.

28. The advocate of the accused has submitted that,

29. So far as reliance of the citations by the advocate is

demand promissory note dtd.11.08.2014, there is certificate of the

33. So far as above documents and evidence of the

there was no record by the complainant to show that after time of

34. So far as contention, evidence, documentary record is

35. Moreover, the learned advocate of the complainant has

Considering all these aspects I come to the conclusion that accused

42. Heard learned advocate for complainant and defence

43. As per provision, the punishment for offence punishable

of money and threat of jail is only to ensure recovery as such,

44. In the circumstance of the case and considering the source

i) Accused Dhaval Vijay Karia is hereby convicted for

iii) Accused is directed to pay to the complainant

iv) The amount of compensation shall be paid to the

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9. Accused has examined himself vide Exh.37A and xerox

cheque contrary he admitted in crossexamination that he only paid