Under the provisions of Clause (c) of Section 138 of the Act, the cause of action for such-like complaint arises on the failure of the drawer "to make payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within 15 days of the receipt of the said notice" given under Clause (b) thereof, and not before that. No such complaint can, therefore, legally be filed before the aforesaid period. That being so, the material and relevant date for accrual of cause of action for such-like complaint is the date of receipt of notice by the drawer. The complainant being the sender of the notice cannot clearly receive the same. The recipient of the notice under Clause (b) of Section 138 of the Act must invariably be the drawer of the cheque, to whom it is given. Knowledge of the sender about the date of receipt of the notice by the drawer is, therefore, very much material as regards accrual of the cause of action for making such-like complaint. The sender of the notice could clearly have no personal knowledge about the date of receipt of the same, unless the notice is sent by messenger and the receipt thereof is duly acknowledged by the person to whom it is sent. But in cases (as in the instant case), where notice is sent by registered post acknowledgment due, which is the usual mode of service, which could, in particular, hardly be avoided if the parties do not belong to the same place or near about places, the knowledge of the sender (complainant) about the date of receipt of such notice would invariably be dependent upon other agencies, namely, the postal department, which is obliged to return back the acknowledgment due card to the sender of the registered notice. But the promptitude and efficiency of the postal department is a matter which is an everyday experience for the people at large. More often than not, acknowledgment due card is hardly returned back to the sender (of the registered notice) in time. Not infrequently, the acknowledgment due card never reaches back the sender, necessitating correspondence with the postal department as to the delivery/service of the registered notice or the date of delivery/ service of such notice. Not unoften, the somnolence of the postal authority could hardly be shaken within reasonable time in answering such query when the acknowledgment due card does not reach back the sender. In such cases, such-like complaint is likely to fail for no fault of the complainant, but for the failure/laches on the part of the postal department. The purpose of the Act is, therefore, likely to be frustrated, in such circumstances, which could never possibly have been intended by the makers thereof. The question which thus naturally arises for consideration is whether the literal and mechanical way of construing Clause (c) of Section 138 of the relevant Act would be justified in law, in such circumstances. The knowledge of the sender of the notice about the date of receipt of the same being an essential requirement of fair-play and natural justice, the expression "within 15 days of the receipt of the said notice", used in the aforesaid provision, should clearly mean the date when the sender acquires the knowledge about the date of the receipt of the notice given by him under Clause (b) of the relevant provision. If a person is given a right to resort to a remedy within a prescribed time, limitation should not be computed from a date earlier than that on which the party aggrieved actually knew about the date of accrual of the cause of action for making a complaint before the competent court for seeking redress therefore, or else, it might be an absurd and unreasonable application of law.
Criminal Appeal No. 56 of 2010
A.P. Lavande , J.
Print Page
Equivalent Citation: 2012 CriLJ 4743 Bombay
IN THE HIGH COURT OF BOMBAY AT GOA
Decided On: 10.09.2012
Appellants: Mr. Sheikh Shabbir
Vs.
Respondent: Mr. Shaikh Yusuf
Vs.
Respondent: Mr. Shaikh Yusuf
Hon'ble Judges/Coram:
A.P. Lavande , J.
Case Note:
Criminal - Acquittal - Section 138 of Negotiable Instruments Act, 1881 - Magistrate acquitted Accused from offence punishable under Section 138 of Act on ground that transaction between Accused and complainant was money lending transaction and as such, there was no legally enforceable debt and thus offence under Section 138 of Act was not made out - Hence, this appeal - Whether, findings recorded by Magistrate were sustainable in law - Held, on perusal of Memorandum of Understanding disclosed that pursuant to said memorandum, amount of Rs. 5 Lakhs was taken by Accused from complainant as his investment in studio for period of 50 months - Such agreement also disclosed that Accused agreed to pay to complainant Rs. 25,000/- in equal monthly installments in form of 50 post dated cheques issued in advance on Bank - However there was no evidence which suggested that 50 cheques were given at time of entering into Memorandum of Understanding - Even there was not even whisper by complainant nor any cross-examination by Accused as to whether cheques were actually issued by Accused - Thus it was unable to accept that as on date of filing complaint, amount of Rs. 5 Lakhs was not due and payable by Accused to complainant - Further there was no evidence that 50 cheques or any cheque was issued by Accused to complainant - Thus upon reappreciation of entire evidence, it held that complainant had been able to establish ingredients of Section 138 of Act beyond reasonable doubt against Accused - Therefore findings recorded by Magistrate while acquitting Accused, were patently unsustainable in law - Hence order of acquittal was quashed and Accused was convicted for offence punishable under Section 138 of Act - Appeal disposed of
JUDGMENT
1. Heard Mr. Sudesh Usgaonkar, Learned Counsel for the appellant and Mr. Pereira, Learned Counsel for the respondent. By this appeal, the appellant ('the accused') takes exception to the judgment and order dated 31/12/2009 passed by the Judicial Magistrate, First Class, Vasco-da-Gama in Criminal Case No. 66/OA/NIA/09/C acquitting the respondent of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 ('the Act' for short).
2. The case of the complainant in brief is as follows :
The accused approached the complainant with the proposal that he wanted to extend his business of processing quick and quality photo film processing, by purchasing New Digital Film Processing Unit, Konica 808 Gold, run by him under the name and style "F.M. Studio" and requested the complainant to invest an amount of Rs. 5 Lakhs in the said business. The accused also assured the complainant that the business would fetch good profits and the complainant would get an amount of Rs. 12,50,000/- (Rs. twelve lakhs fifty thousand only) in the form of 25,000/- per month for 50 months. Accordingly, the complainant handed over Rs. 5 Lakhs to the accused to be invested in the business and memorandum of understanding dated 25/07/2008 was drawn and executed between the accused and the complainant before Notary Shri T.T. Shreedharan at Vasco-da-Gama. According to the complainant, from the said amount, the accused purchased the New Digital Film Processing unit, but the accused did not pay an amount of Rs. 25,000/- per month as agreed. Hence, the complainant requested the accused to return Rs. 5 Lakhs. The accused issued the cheque dated 23/03/2009 drawn on Punjab National Bank, Vasco-da-Gama in favour of the complainant for an amount of Rs. 5 Lakhs towards the repayment of the amount due to the complainant. He deposited the cheque in the Canara Bank, Panaji Branch. By communication dated 30/04/2009, the complainant was informed that the cheque was returned unpaid by the Punjab National Bank, Vasco-da-Gama under memo dated 29/04/2009 with endorsement 'funds insufficient'. The complainant issued a legal notice dated 18/05/2009 to the accused and requested the accused to pay the amount of Rs. 5 Lakhs. However, in spite of the receipt of the said notice, the accused neither replied to the said notice nor paid the said amount. Hence, the complainant filed the complaint on 04/07/2009.
3. Summons was issued to the accused and the substance of the accusation was explained to the accused. The accused denied the allegation and claimed to be tried. In Criminal Case No. 66/OA/NIA/09/C, the complainant examined himself and produced several documents. The statement of the accused under Section 313 of Cr.P.C. was recorded. In answer to all the questions, except one, the accused answered that the statements made by the complainant against him were false. The accused did not lead any defence evidence. Learned Magistrate by the impugned judgment and order, acquitted the accused of the offence punishable under Section 138 of the Act.
4. Learned Magistrate acquitted the respondent primarily on the following grounds :
(i) The transaction between the accused and the complainant was a money lending transaction and as such, there was no legally enforceable debt and consequently, the offence under Section 138 of the Act was not made out.(ii) There was variation in the name of the party (the accused) in the memorandum of understanding dated 25/07/2008 entered into between the parties.
5. Learned Magistrate framed the following three points for determination in the judgment :
(i) Whether the complainant proves that the debt is legally enforceable debt ?(ii) Whether the complainant proves that the accused has rebutted the presumption available under the Act ?(iii) Whether the complainant proves that a legal notice was issued to the accused and it was duly served on him ?
Insofar as the receipt of notice issued under Section 138 of the Act is concerned, although in paragraph 11 learned Magistrate held that the complainant had not proved that the legal notice 18/05/2009 was sent by him and was duly received by the accused, while giving the finding in paragraph 21, she gave the finding in favour of the complainant.
6. As stated above, the complainant examined himself and produced several documents in support of his case. According to the complainant, the complainant had issued notice dated 18/05/2009 to the accused under Section 138 of the Act, but he did not receive A.D. card in respect of Registered Post A.D. notice. According to the complainant, his Advocate made requisition to the office of the Senior Post Master at Panaji since he did not receive the A.D. Card. The Manager of Customer Care Centre, Panaji informed the Advocate, who had made requisition, as follows :
Dear Sir/ Madam,with reference to your complaint, it is to inform you that the complaint of Non Receipt of Ack./ Proof of Delivery of Registered Letters with Transaction No. 8812 on 18/05/2009 of Panaji HO is settled on 30/06/2009 with the following information that 'Delivered on 19/05/2009'Thanking You,
Yours faithfully,
MANAGER
CUSTOMER
CARE CENTRE
PANAJI GOA
According to the complainant, he was informed by the Postal Authorities that the legal notice dated 18/05/2009 addressed by the complainant, was received by the accused on 19/05/2009, only on 30/06/2009 and, therefore, the complaint filed on 04/07/2009 was within the period prescribed under Section 142(b) of the Act.
7. The complainant deposed in consonance with the complaint filed by him. The complainant in examination-in-chief produced the evidence by way of affidavit exhibit C-19. He also produced the notarised copy of memorandum of understanding dated 25/07/2008 exhibit C-7 and also cheque exhibit C-8. He also produced intimation letter and memorandum exhibit 9 colly and legal notice along with letter of postal slip exhibit 10 colly.
8. In cross-examination, he denied that he had not issued the notice in writing within stipulated period. He also denied the suggestion that he had not presented the complaint within the statutory period. He also denied the suggestion that the notice dated 18/05/2009 issued by his Advocate, was not addressed on the correct address. He also denied the suggestion that the notice dated 18/05/2009 was never tendered by the Postal Authorities to the accused at his correct address and that letter dated 30/06/2009 exhibit C-10 was fabricated and was issued without verifying the records. He also denied the suggestion that the registered letter dated 18/05/2009 did not contain any notice. He denied the suggestion that he did not give an amount of Rs. 5 Lakhs or any other amount to the accused or that the amount of Rs. 5 Lakhs alleged to have been given by him to the accused, was contrary to Income Tax Act and Income Tax Rules. The complainant admitted that there was no document terminating or cancelling the memorandum of understanding dated 25/07/2008 which was for sharing profits. He claimed ignorance as to whether the business in which he invested Rs. 5 Lakhs was registered company under the Companies Act. He stated that he had not seen any partnership document of the business known as F.M. Studio, but he maintained that he had visited the shop. He further stated that he had not personally seen or inspected the account of business known as F.M. Studio. He further claimed that he was sleeping partner and he had invested at the request of the accused as investor and for profits. To the question that in case there was loss in the business then what was the understanding, he stated that that was not his problem. A pointed suggestion was put by the accused that in case of loss caused, the complainant was supposed to bear the share of loss. He admitted that he had not any licence under the Goa Money Lenders Act, 2001. He further stated that he had not invested in any other business apart from the business of the accused. He stated that he has the business of stock market broker franchisee which is about 6 to 8 months old as on the date of deposition i.e. 28/12/2009, but he did not have any business as on 25/07/2008. He denied the suggestion that he was doing the business of money lending or that there was no legally enforceable debt. The witness stated that he did not agree to the suggestion that the business which was run by the accused fell in the serious losses due to severe recession and steep competition in the market. He denied the suggestion that the term 'profit percentage of 3 % per month' was nothing but a disguised money lending with the interest of 3 % per month or that the same money lending was usurious and unconscionable or that the transaction was prohibited under the law and, therefore, there was no legally enforceable debt. He denied the suggestion that false case was filed against the accused in order extort money from him.
9. Mr. Usgaonkar, Learned Counsel appearing for the appellant/ complainant submitted that insofar as the notice issued under Section 138 of the Act is concerned, the same is in compliance with Section 138 of the Act. Moreover, there is not even suggestion put by the accused that he did not receive the notice dated 18/05/2009 on behalf of the complainant and only suggestion put was that the address mentioned in the said complaint was not correct. According to Learned Counsel, neither memorandum of understanding dated 25/07/2008 exhibit C-7 nor transaction entered into pursuant thereto can be said to be money lending transaction. Mr. Usgaonkar, further submitted that the complaint was filed on account of bouncing of cheque of Rs. 5 Lakhs issued by the accused returning the principal amount advanced by the complainant and as such, by no stretch of imagination, it can be said that the cheque was hit by the Goa Money Lenders Act, 2001 or there was no legally enforceable debt, as has been held by the learned Magistrate. Mr. Usgaonkar invited my attention to relevant provisions of the Goa Money Lenders Act, 2001 and submitted that in order to be a money lender, there must be a series of transactions of money lending and a solitary act of advancing money that too on a condition of sharing profits cannot be termed as money lending transaction hit by the Goa Money Lenders Act, 2001. According to Learned Counsel, the burden cast on the accused to prove that there was no legally enforceable debt, has not been discharged by him either by cross-examination of the complainant or by leading evidence in defence. Learned Counsel further submitted that the order of acquittal recorded by the learned Magistrate is totally perverse and, therefore, deserves to be interfered with in the appeal. Learned Counsel further submitted that the accused be convicted and sentenced on account of recalcitrant conduct of the accused in depriving the complainant of money which was advanced by him. In support of his submissions, Mr. Usgaonkar placed reliance upon the following judgments :
(i) Goa Plast (P) Ltd., Vs. Chico Ursula D'Souza; MANU/SC/0940/2003 : AIR 2004 SC 408.(ii) K. Bhaskaran Vs. Sankaran Vaidhyan Balan & another; 2005 BCR 178.(iii) Santa Priya Engineers (Pvt) Ltd. And Anr. Vs. Uday Sankar Das and Anr.;1998 91 CC 599 Cal. (iv) Suganthi Suresh Kumar Vs. Jagdeeshan; MANU/SC/0037/2002 : 2002 Cri. L.J. 1003.
10. Per contra, Mr. T. Pereira, Learned Counsel appearing for the respondent/ accused supported the impugned judgment and order of acquittal and submitted that the finding recorded by the learned Magistrate that the transaction was of money lending and therefore there was no legally enforceable debt to attract Section 138of the Act, cannot be said to be perverse warranting interference in appeal against acquittal.
Mr. Pereira invited my attention to the relevant provisions of the Goa Money Lenders Act, 2001 and submitted that the transaction entered into pursuant to memorandum of understanding dated 25/07/2008 exhibit C-7 though couched as agreement to share profits, the same is nothing but a money lending transaction inasmuch as the same stipulates payment of interest of 3 % per month, contrary to Section 31 of the Goa Money Lenders Act. Mr. Pereira further submitted that since the parties had entered into written agreement, it is difficult to accept the case of the complainant that there was oral understanding between the complainant and the accused pursuant to which the accused gave cheque of Rs. 5 Lakhs to the complainant. Since the parties had initially entered into an agreement in writing, it was quite natural for the parties to enter into a fresh agreement in writing if they wanted to vary the terms of the agreement.
Insofar as issuance of notice under Section 138 of the Act is concerned, Mr. Pereira submitted that perusal of A.D. Card slip produced by the complainant discloses that the address mentioned therein was 'Khalap Waddo, Vasco' and not the address mentioned in the memorandum of understanding on which address the notice was supposed to be given. Learned Counsel, therefore, submitted that in the absence of valid notice under Section 138 of the Act, the complaint itself was not maintainable. Learned Counsel further submitted that the complaint filed was not within limitation inasmuch as the notice under Section 138 of the Act was given on 18/05/2009. The complainant was filed on 04/07/2009 and, therefore, in terms of Section 142(b) of the Act, the complaint was filed beyond the period of limitation and as such, the complaint itself was not maintainable. Mr. Pereira submitted that the cheque in question must have been misused by the complainant inasmuch as in terms of memorandum of understanding, the accused had to issue 50 cheques for Rs. 25,000/- each to the complainant and it is quite possible that the complainant has misused one of such cheques. According to Pereira, in the statement the complainant has not referred to 50 cheques which were given in terms of memorandum of understanding in terms of which the accused was not even liable to pay an amount of Rs. 5 Lakhs as on the date of issuance of cheque. Learned Counsel, therefore, submitted that no interference is warranted with the judgment and order of the acquittal passed by the learned Magistrate.
11. I have carefully considered the rival submissions, perused the records and the judgments relied upon.
12. At the outset, it is pertinent to note that learned Magistrate has not correctly formulated the points for determination. Insofar as point no. 2 is concerned, in view of statutory presumption, the burden of proving the said point was on the accused and not on the complainant. In terms of Sections 118 and 139 of the Act, presumption of consideration operates and it is for the accused to discharge it either by cross-examination of the complainant or by leading defence evidence on the touchstone of preponderance of probabilities. Insofar as point no. 3 is concerned, although in paragraph 11 of the judgment, learned Magistrate has held that the complainant has not proved that legal notice was issued to accused and it was duly served on him, in paragraph 21 of the judgment, learned Magistrate has held that the notice was given on the correct address.
13. In terms of Section 138 of the Act, it is mandatory for the complainant to give notice in writing to the drawer of the cheque, within 30 days of the receipt of the information by him regarding return of the cheque as unpaid. In terms of Section 142(b), the complaint has to be filed within one month of the date on which the cause of action arises under clause (c) Proviso to Section 138 of the Act. In the present case, the complainant has proved that Registered Post A.D. notice was issued on 18/05/2009. He also produced a communication dated 30/06/2009 which has been reproduced above. It is therefore, evident that the complaint was made by the complainant regarding non-delivery of acknowledgment card and it was only on 30/06/2009 that he was informed that the notice dated 18/05/2009 was delivered on 19/05/2009. In my view, the complaint filed on 04/07/2009 was well within limitation inasmuch as unless the complainant comes to know about either the delivery or refusal by the accused of the notice, he is not in a position to file the complaint. When notice is given under Section 138 either notice is received by the accused or it is refused by the accused or it is unclaimed. In case the complainant receives the A.D. card, there is no difficulty in computing the period of limitation provided in clause (b) of Section 142 of the Act. However, in case the complainant does not receive A.D. card he is not aware as to when the accused has received the notice or whether the accused has refused the notice or whether the notice is unclaimed. In such an eventuality complainant is not entitled to file complaint for the offence punishable under Section 138 of the Act. In the present case, the communication dated 30/06/2009 clearly establishes that the advocate for the complainant had made complaint regarding non-receipt of A.D. card in relation to notice dated 18/05/2009 and it was only on 30/06/2009 that he was informed by the Postal Authorities that the notice was served on 19/05/2009. In this connection, Mr. Usgaonkar, has rightly placed reliance upon the judgment in the case of Santa Priya Engineers (Pvt) Ltd (supra). I deem it appropriate to quote relevant portion of paragraph 6 which reads as under :
6. Under the provisions of Clause (c) of Section 138 of the Act, the cause of action for such-like complaint arises on the failure of the drawer "to make payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within 15 days of the receipt of the said notice" given under Clause (b) thereof, and not before that. No such complaint can, therefore, legally be filed before the aforesaid period. That being so, the material and relevant date for accrual of cause of action for such-like complaint is the date of receipt of notice by the drawer. The complainant being the sender of the notice cannot clearly receive the same. The recipient of the notice under Clause (b) of Section 138 of the Act must invariably be the drawer of the cheque, to whom it is given. Knowledge of the sender about the date of receipt of the notice by the drawer is, therefore, very much material as regards accrual of the cause of action for making such-like complaint. The sender of the notice could clearly have no personal knowledge about the date of receipt of the same, unless the notice is sent by messenger and the receipt thereof is duly acknowledged by the person to whom it is sent. But in cases (as in the instant case), where notice is sent by registered post acknowledgment due, which is the usual mode of service, which could, in particular, hardly be avoided if the parties do not belong to the same place or near about places, the knowledge of the sender (complainant) about the date of receipt of such notice would invariably be dependent upon other agencies, namely, the postal department, which is obliged to return back the acknowledgment due card to the sender of the registered notice. But the promptitude and efficiency of the postal department is a matter which is an everyday experience for the people at large. More often than not, acknowledgment due card is hardly returned back to the sender (of the registered notice) in time. Not infrequently, the acknowledgment due card never reaches back the sender, necessitating correspondence with the postal department as to the delivery/service of the registered notice or the date of delivery/ service of such notice. Not unoften, the somnolence of the postal authority could hardly be shaken within reasonable time in answering such query when the acknowledgment due card does not reach back the sender. In such cases, such-like complaint is likely to fail for no fault of the complainant, but for the failure/laches on the part of the postal department. The purpose of the Act is, therefore, likely to be frustrated, in such circumstances, which could never possibly have been intended by the makers thereof. The question which thus naturally arises for consideration is whether the literal and mechanical way of construing Clause (c) of Section 138 of the relevant Act would be justified in law, in such circumstances. The knowledge of the sender of the notice about the date of receipt of the same being an essential requirement of fair-play and natural justice, the expression "within 15 days of the receipt of the said notice", used in the aforesaid provision, should clearly mean the date when the sender acquires the knowledge about the date of the receipt of the notice given by him under Clause (b) of the relevant provision. If a person is given a right to resort to a remedy within a prescribed time, limitation should not be computed from a date earlier than that on which the party aggrieved actually knew about the date of accrual of the cause of action for making a complaint before the competent court for seeking redress therefore, or else, it might be an absurd and unreasonable application of law.
14. I am in respectful agreement with the view taken by learned Single Judge of Calcutta High Court. In a case where the complainant chooses to give notice by Registered Post A.D., and he does not receive A.D. card he has to be in predicament and unless he is informed by the Postal Authority as to the fate of his notice, it cannot be expected of the complainant to file complaint within the period of limitation prescribed under Section 142(b) of the Act. In the present case, the accused in course of cross-examination of the complainant, has not been able to bring on record any material to establish that the complainant had notice about the receipt of notice prior to 30/06/2009. Moreover, as rightly pointed out by Mr. Usgaonkar, in the cross-examination of the complainant, no direct suggestion has been put to him that the accused had not received the notice. Merely saying that the notice was not addressed on the correct address, is different from saying that the accused had not received the notice. Moreover, perusal of the copy of the notice issued under Section 138 discloses that the correct address was mentioned in the said notice. Mere fact that on the slip issued by the postal authorities different address is mentioned, by itself would not be sufficient to hold that notice was not addressed on the correct address inasmuch as the slip is prepared by the postal department and what is important is the address mentioned on the letter and A.D. slip and not the address mentioned on the slip issued by the Postal Authority. I have absolutely no hesitation to hold that the complainant had given correct address both in the notice as well as on the postal envelop in which the said notice was addressed to the accused. More importantly, the accused has neither led any evidence nor stepped in the box to establish that he had not received the notice dated 18/05/2009. Therefore, I am in agreement with Mr. Usgaonkar that the accused has not come with specific defence, that he had not received the notice dated 18/05/2009. It is also pertinent to note that a very strange suggestion has been put to the complainant that the letter sent by the complainant did not contain any legal notice or any other statutory notice. This suggestion means the accused received a blank envelop without any notice. If that was the case, it was necessary for the accused to lead evidence in support of this fact which the accused has failed to do.
15. Insofar as some discrepancy in the name of party in the memorandum of understanding as mentioned by learned Magistrate is concerned, in my opinion, nothing much can be made of it inasmuch as a bare perusal of the agreement discloses that on page 2 of the said memorandum of understanding, initially the name of 'Sheikh Shiraj' is written. However, 'Shiraj' has been struck out and the name 'Yusuf' has been inserted. There is counter-signature which obviously has been made by the accused himself. Moreover, there is no cross-examination on this aspect by the accused, although the complainant was cross-examined at length. Therefore, nothing turns out from striking out the name of Shiraj and adding the name of Yusuf.
16. The main question which arises for consideration is whether the transaction is hit under the Goa Money Lenders Act, 2001. I deem it appropriate to refer to the relevant provisions upon which reliance was placed by Learned Counsel appearing for both sides. They are as follows :
Section2(k) - "loan" means as advance at interest, whether of money or in kind, but does not include -(i) a deposit of money or other property in a Government post office bank or in any other bank or in a company or with a Co-operative Society;(ii) a loan to, or by, or a deposit with any society or association registered under the Societies Registration Act, 1860 (Central Act 21 of 1860), or any other enactment relating to a public, religious or charitable object;(iii) a loan advanced by the Government or by any local authority authorised by the Government;(iv) a loan advanced to a Government servant from a fund, established for the welfare or assistance of Government servants, and which is sanctioned by the Government;(v) a loan advanced by a Co-operative Society;(vi) an advance made to a subscriber to, or a depositor, in a provident fund, from the amount standing to his credit in the fund in accordance with the rules of the fund;(vii) a loan to or by an insurance company as defined in the Insurance Act, 1938 (Central Act 4 of 1938);(viii) a loan advanced to, or by a bank;(ix) a loan to, or by, or deposit with, anybody (being a body not falling under any of the other provisions of this clause), incorporated by any law for the time being in force in the State of Goa;(x) an advance of any sum exceeding rupees three thousand made on the basis of a Negotiable Instrument as defined in the Negotiable Instruments Act, 1881 (Central Act 26 of 1881), other than a promissory note;(xi) an advance of any sum exceeding rupees three thousand made on the basis of a hundi (written in English or any other Indian language);(xii) an advance made bonafide by any person carrying on any business, not having for its primary object the lending of money, if such advance is made in the regular course of his business;(xiii) except for the purposes of sections29 and31 , -(A) a loan, by a landlord to his tenant for financing of crops or seasonal finance, of not more than Rs. 5 per acre of land held by the tenant;(B) a loan advanced to an agricultural labourer by his employer.Explanation : - The expression "tenant" shall have the meaning assigned to it in the Goa, Daman and Diu Agricultural Tenancy Act, 1964 (Act 7 of 1964), or any other relevant tenancy law in force relating to tenancy or agricultural lands;Section2(1) - "money-lender" means, -(i) an individual; or(ii) an undivided Hindu Family; or(iii) a company; or(iv) an unincorporated body of individuals, who or which-(a) carries on business of money-lending in the State; or does any activity of lending of any finance;(b) has his or its principal place of such business in the State, and includes a pawnbroker but does not include -(i) Government,(ii) a local authority,(iii) a bank,(iv) the Agricultural Refinance Corporation constituted under the Agricultural Refinance (AND Development) Corporation Act, 1963 (Central Act 10 of 1963) or(v) any other banking, financial or any institution which the Government may, by notification in the Official Gazette, specify in this behalf;31. Limitation on rates of interest.-- (1) The Government may, from time to time, by a notification in the Official Gazette, fix the maximum rate of interest for any local area or class of business of money-lending in respect of secure and un-secured loans and until such rates are fixed, the maximum interest charged shall not exceed 24% per annum.(2) No money-lender shall receive from a debtor or intending debtor any sum by way of compound interest on a loan advanced or intended to be advanced or any sum by way of interest at a rate higher than the rate fixed under sub-section (1) for any default committed by the debtor in payment of the sums on due date in accordance with the terms on which the loan is granted:Provided that the money-lender, in case of such default, may charge simple interest at a rate not exceeding the rate payable in respect of the principal on the sums due in respect of the period commencing on the date on which they become due for payment and ending on the date on which they are actually paid.(3) Notwithstanding anything contained in any law for the time being in force, no agreement between a money-lender and a debt or for payment of interest at the rates exceeding the maximum rates fixed by the Government under sub-section (1) and no agreement in contravention of the provisions of sub-section (12) shall be valid.(4) If any money-lender or a person advancing a loan specified in sub-clause XIII of clause (k) of section2 makes an oral or written demand or charges or receives from a debtor interest at rate exceeding the maximum rate fixed by the Government under sub-section (1), he shall, for the purposes of section43 , be deemed to have contravened the provisions of this Act.
17. Perusal of memorandum of understanding dated 25/07/2008 discloses that pursuant to the said memorandum, an amount of Rs. 5 Lakhs was taken by the accused from the complainant as his investment in the studio which was to carry profit, in order to purchase New Digital Film Processing Unit and the same was for a period of 50 months beginning from 01/09/2008 to 01/10/2012. The said agreement also discloses that the accused agreed to pay to the complainant Rs. 25,000/- in equal monthly installments in the form of 50 post dated cheques issued in advance on Punjab National Bank comprising of capital borrowed amount and profit percentage at 3 % per month. The same also discloses that the accused pledged to deposit signed post dated 50 cheques for an equal amount of Rs. 25,000/- dated from 01/09/2008 to 01/10/2012 from his account, having total value of Rs. 12,50,000/- as a security retainer in favour of the complainant. Firstly, there is no evidence which suggests that 50 cheques were given at the time of entering into memorandum of understanding. The accused had agreed to deposit the post dated cheques with the complainant. But there is not even a whisper by the complainant nor any cross-examination by the accused as to whether the cheques were actually issued by the accused. Therefore, I am unable to accept the submission of Mr. Pereira that as on the date of filing the complaint, an amount of Rs. 5 Lakhs was not due and payable by the accused to the complainant. Insofar as the issuance of cheque is concerned, the evidence led by the complainant clearly establishes that the said cheque was issued by the accused from his account and the same was dishonoured by the bank. There is absolutely nothing brought on record in the cross-examination of the complainant indicating the circumstances in which the accused gave the said cheque to the complainant. Insofar as the submission made by Mr. Pereira that the complainant might have misused one of the 50 cheques issued by the accused is concerned, I find it absolutely untenable in law inasmuch as for that matter, there is no evidence that 50 cheques or any cheque was issued by the accused to the complainant. Even if it is assumed that the accused had issued 50 cheques, the same must have been issued by inserting the amount in the said cheques and, therefore, it was impossible for the complainant to misuse the cheque issued by the accused to the complainant, as claimed by Learned Counsel for the accused. It is pertinent to note that the accused chose not to lead any defence evidence.
18. Insofar as the submission made by Mr. Pereira that since the original amount was advanced pursuant to written agreement it was quite probable that any variation thereto would have been done by written agreement is concerned, I find it extremely difficult to accept the same. According to me, the version given by the complainant is probable one and the complainant has deposed so on oath. Once it is established that the accused had given a signed cheque for Rs. 5 Lakhs to the complainant, it was for the accused to establish under what circumstances, the said cheque was given to the complainant. It has not been suggested by the accused to the complainant that the amount and the date in the cheque were written by the complainant. This being the position, in my considered opinion, the accused has not come with plausible explanation regarding the issuance of cheque of Rs. 5 Lakhs to the complainant. On the contrary, the version given by the complainant appears to be more probable. Perusal of memorandum of understanding discloses that the same was entered into between the parties since the accused requested the complainant to advance Rs. 5 Lakhs to be invested in the business already conducted by him and promised to pay profits by issuing cheques in the sum of Rs. 12,50,000/-. In other words, the accused agreed to repay the amount with interest at 3 % per month. But it is the case of the complainant that since the accused did not pay any amount, he requested the accused to return principal amount he owed, by issuing the cheque in question. The version given by the complainant is quite probable and in the absence of any plausible explanation coming from the accused as to the circumstances in which the said cheque was issued, I have no hesitation to accept the version of the complainant. If that be the case, in my view, returning principal amount of Rs. 5 Lakhs which was advanced by the complainant to the accused in terms of the memorandum of understanding, cannot be termed as money lending transaction. In my view, the transaction entered into between the complainant and accused would not render the complainant "money lender" in terms of Section 2(1) of the Goa Money Lenders Act, 2001, having regard to the nature of transaction entered into between the complainant and the accused. Merely because Section 31 stipulates that maximum rate of interest which can be fixed by the Government in case of money lending should not exceed 24 % per annum, by itself would not be sufficient to hold that the transaction entered into between the complainant and the accused in terms of memorandum of understanding dated 25/07/2008 was a money lending transaction. Therefore, in my view, learned Magistrate has committed patent illegality in coming to a finding that the transaction was hit by the Goa Money Lenders Act, 2001.
19. In the case of Goa Plast (P) Ltd.(supra), the Apex Court held that the object and ingredients of provisions of Sections 138 and 139 of the N.I. Act, cannot be ignored. However, proper and smooth functioning of business transaction depends upon the integrity and honesty of the parties. In the said case, the Supreme Court granted 1 month's time to the accused to pay double the amount of cheque and ordered that in case of failure to pay the amount, the accused would undergo Simple Imprisonment for six months.
In the case of K. Bhaskaran (supra), the Apex Court referred to Section 27 of the General Clauses Act and held that the liability of a complainant under Section 138of the Act was to give notice calling upon the accused to pay an amount mentioned in the cheque. The Apex Court also held that in terms of Section 27 of the General Clauses Act where the sender has dispatched notice by post on correct address written on it, then it would be deemed to have been served on sendee unless it was proved that it was not really served and that he was not responsible for non-service. The Apex Court held that another interpretation could lead to a very tenuous position as the drawer of cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice.
In the case of C.C. Alavi Haji Vs. Palapetty Muhammed and another; MANU/SC/2263/2007 : (2007) 6 SCC 555, the Apex Court has held that 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 and, therefore, the complaint is liable to be rejected. The Apex Court further held that a person who did 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, could not 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 General Clauses Act and Section 114 of the Evidence Act. The Apex Court further held that another interpretation of the proviso would defeat the object of the legislature and referred to the case of K. Bhaskaran (supra). The Apex Court held that 'giving of notice' in the context of clause (b) of proviso was not the same as 'receipt of notice'; the trickster cheque drawer would get premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the Act.
20. Thus, upon reappreciation of the entire evidence, I have no hesitation to hold that the complainant has been able to establish the ingredients of Section 138 of the Act beyond reasonable doubt against the accused. In my view, therefore, the view taken and findings recorded by learned Magistrate while acquitting the accused, are patently unsustainable in law and, therefore, deserve to be quashed and set aside and the accused is liable to be convicted for the offence punishable under Section 138 of the Act. The accused is convicted for the offence punishable under Section 138 of the Act.
21. Coming to the sentence, in the case of Suganthi Suresh Kumar (supra), the Apex Court set aside the order passed by the learned Magistrate which was maintained by the High Court, sentencing the accused to undergo imprisonment till rising of the Court and to pay fine amount of Rs. 5,000/-, in the case involving dishonour of two cheques in the sum of Rs. 4,50,000/- and remanded the matter to the Magistrate for imposing appropriate sentence after maintaining the conviction. The Apex Court held that sentence for the offence punishable under Section 138 of the Act should be of such a nature as to give proper effect to the object of the legislature and no drawer of cheque can be allowed to take dishonour of the cheque issued by him lightly. The very object of enactment of provision of Section 138 of the Act would stand defeated, if the sentence is of the nature passed by the trial Magistrate and it was different matter if the accused paid the amount at least during the pendency of the case.
22. Considering the circumstances of the case and defence taken by the accused before learned Magistrate and which has been reiterated before this Court, I am of the considered opinion that the interest of justice would be served by sentencing the accused to suffer Simple Imprisonment for a period of three months and to pay compensation of Rs. 6 Lakhs to the complainant. In case of failure to pay compensation, the accused shall undergo Simple Imprisonment for a period of two months.
23. At this stage, Mr. L. Salkar, holding for Mr. Pereira, Learned Counsel for the respondent / accused, seeks time of four weeks to surrender. Time of four weeks is granted to the accused to surrender before learned Magistrate to undergo the sentence imposed today. The bail bond executed by the accused shall stand discharged, upon surrender. In case the accused fails to surrender within four weeks from today, learned Judicial Magistrate, First Class, Vasco-da-Gama shall take appropriate steps to take the accused into custody to serve the sentence imposed on him and report compliance within a period of three weeks thereafter. The appeal stands disposed of in aforesaid terms.
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