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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH NAGPUR
Criminal Revision No. 227/2007
Rafique Raheman Shaha,
aged about 33 years, Occ. Prop.
Shaha Agency, r/o Chobara Road,
Jalgaon Jamod, Tq. Jalgaon Jamod,
Dist. Buldhana, P.S. Jalgaon Jamod.
.. APPLICANT
.. Versus ..
1. State of Maharashtra,
thr. PSO Jalgaon Jamod, tq.
Jalgaon Jamod, dist. Buldhana.
2. Vishwnath Ganpat Ingle,
aged about 55 years, Occ. Business,
r/o Jalgaon Jamod, Tq. Jalgaon Jamod,
Dist. Buldhana. .. NON APPLICANTS
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Mr. R. N. Badhe, Advocate for applicant.
Mr. D. M. Kale, A.P.P. for non applicant no.1
Mr. I. F. Jain, Advocate for non applicant no.2.
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CORAM : R. Y. GANOO, J.
DATED :- 26th August, 2009
JUDGMENT
1. Non applicant no.2 filed complaint under
Section 138 of the Negotiable Instruments Act
(hereinafter referred to as the ‘Said Act’) against the
applicant in the court of Judicial Magistrate First Class 2nd
Court, Jalgaon Jamod (hereinafter referred to as learned
‘trial Judge’). The learned trial Judge conducted trial
against the applicant and by judgment and order dated
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10.10.2005 convicted the applicant under Section 138 of
the Negotiable Instruments Act and sentenced him to
suffer simple imprisonment for one year and to pay a fine
of Rs. 1,60,000/-. It was also ordered that in default of
payment of fine, the applicant should undergo simple
imprisonment for three months. It was also ordered that
out of fine, which will be deposited, a sum of
Rs.1,60,000/- be paid over to non applicant no.2-
complainant. This order dated 10.10.2005 was challenged
by applicant by filing Criminal Appeal No. 23/2005 in the
Sessions Court at Khamgaon. The learned Additional
Sessions Judge, Khamgaon by judgment and order dated
06.09.2007, dismissed the appeal. Against both these
orders, this revision application has been filed.
2. Few facts necessary for the disposal of the
present revision are as under.
According to non applicant no.2-he had paid
Rs. 50,000/- on 06.08.2003, Rs. 60,000/- on 09.08.2003
and Rs. 50,000/- on 14.08.2003. According to non
applicant no.2, the applicant had delivered to non
applicant no. 2 six instruments in the nature of cheques
drawn on Buldhana Urban Co-operative Credit Society,
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Jalgaon Jamod (hereinafter referred to as the ‘said
Society’). Those six instruments were delivered towards
repayment of loan which was advanced to the applicant.
Those six instruments got dishonoured when tendered in
the Bank for realization and, therefore, non-applicant
no. 2 issued notice at Exh.-28 dated 16.03.2004 being
statutory notice under Section 138 of the said Act. The
applicant replied to the said notice by reply dated
31.03.2004 at Exh.-87 through his Advocate Mr. Karim. As
the applicant did not comply with the statutory notice,
non applicant no.2 filed complaint as mentioned
aforesaid.
3. The applicant presented his defence on
following terms. Non applicant no. 2 was running Chit
Fund and the blank instruments have been misused by
non applicant no.2. It was also contended that applicant
was liable to pay only Rs. 20,000/- to non applicant no. 2
and six instruments were given by way of security to non
applicant no.2. It was also sought to be contended that
the said instruments pertain to Account Nos. 85 and 49
maintained by the said society and those accounts were
of two partners of Shaha Agencies and signatures of both
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persons were necessary. It was also contended that loan
of Rs. 20,000/- was paid by applicant and six instruments
were demanded back. However, non applicant no.2 did
not return the same. It was also contended that said six
instruments were lost.
4. In the course of trial, non applicant no.2
Vishvanath stepped into witness box as PW1 and
examined witnesses namely Santosh Kela, Divisional
Manager of said Society as PW2 and Advocate Karim as
PW3 to prove notice at Exh.-87. The applicant did not
step into the witness box. The applicant examined in all
seven persons as his witnesses and those witnesses were
examined to show that non applicant no. 2 was running
chit fund. The learned trial Judge appreciated evidence
and passed order of conviction as mentioned aforesaid.
The appeal also came to be dismissed.
5. Before this Court, learned Advocate Mr. Badhe
appearing on behalf of the applicant submitted that the
said society cannot be considered as banking institution
in accordance with provisions of Section 5 (b) of the
Banking Regulation Act and it was also contended that
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the society was a Co-operative credit society and that six
instruments cannot be termed as cheques as understood
under the Negotiable Instruments Act and that they could
be treated as only withdrawal slips. He had drawn my
attention to the words “Qdr laLFksP;k mi;ksxklkBh” appearing on
the left hand side of the said six instruments and had
submitted that six instruments could not be termed as
cheques within the meaning of Negotiable Instruments
Act and, therefore, case under Section 138 of the
Negotiable Instruments Act could not have been filed and,
therefore, Courts below have committed error. Learned
Advocate Mr. Badhe to that extent had taken me through
the definition of term “member” appearing in Section 2
(19) of the Maharashtra Co-operative Societies Act
(hereinafter referred to as ‘MCS Act’). He had also drawn
my attention to the definition of term “Society” as
appearing in the MCS Act in Section 2(27). He had also
drawn my attention to the provisions of Section 138 of the
said Act and explanation (1). According to learned
Advocate Mr. Badhe a perusal of the relevant provisions,
which he had pointed out would go to show that six
instruments cannot be termed as cheques and, therefore,
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action under Section 138 of the said Act could not have
been entertained.
6. Learned Advocate Mr. Jain, appearing on
behalf of non applicant no. 2 had refuted the said
contentions. He had relied upon judgment in the case of
Hinganghat Nagri Sahakari Path Sanstha Maryadit,
Hinganghat ..vs.. Ashok Keshavrao Fukat; 2008 (3)
Mh.L.J. 732 to contend that if a Co-operative Society is
doing the business of banking as defined in clause (b) of
Section 5 of the Banking Regulation Act, it would be a Co-
operative Bank as per Section 2(10) of the Co-operative
Societies Act. He had taken me though the provisions of
Section 2 (10) of the MCS Act where the words ‘Co-
operative bank’ has been defined and had submitted that
the said society will have to be treated as “bank” for the
purposes of impugned transaction. He had further
submitted that six instruments were deposited by
applicant and the dishonour memo issued by the said
society does not show that six instruments have been
dishonoured for want of funds. He had, therefore,
submitted that the arguments advanced by learned
Advocate Mr. Badhe should not be accepted. He had
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further submitted that the arguments advanced before
this Court show that six instruments are not cheques was
not advanced before the Courts below and, therefore,
they should not be entertained by this Court.
7. I have considered the rival submissions. I am
inclined to reject the arguments advanced by learned
Advocate Mr. Badhe. Reading of various provisions, which
have been cited by Mr. Badhe, it will have to be observed
that the said Society will be governed by the provisions of
Section 5 (b) of the Banking Regulation Act and will have
to be treated as an institution doing banking business and
hence said society will be a co-operative bank as per
Section 2 (10) of the M.C.S. Act. It is not the case of the
applicant that the said Society is not doing the business of
“accepting for the purposes of loan or investment of
deposit of money from the public eligible on admission or
otherwise and withdrawal by the cheque, draft or
otherwise”. It is not the case of the applicant that the
said society had its operations only with the members.
Apart from the aforesaid observations, the two dishonour
memos, which are on record do not show that the six
instruments, which were delivered by the applicant to non
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applicant no. 2 could not have been lodged for realization
through a clearing house. If stand of the applicant that
six instruments could not be equated with the cheques
and non applicant no. 2 could not have deposited those
instruments in his bank for realization, the said society
should have declined to accept and honour those
instruments on the ground that they could not be treated
as cheques. The very fact that two dishonour memos
merely mention that the instruments are dishonoured
clearly goes to show that six instruments will have to be
treated as cheques. In my view, the way in which events
have taken place, the words “Qdr laLFksP;k mi;ksxklkBh” have
turned to be redundant and cannot be accepted to mean
that the said instruments can be used by only members
of the society. If that was the fact, the same would have
been mentioned on the dishonour memo. In view of this,
the argument of learned Advocate Mr. Badhe cannot be
accepted. No fault can be found with non applicant no. 2
in depositing those instruments with his banker for
realization. The complaint filed on account of dishonour of
those instruments i.e. cheques will have to be treated as
properly filed.
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8. It is also required to be mentioned that the
Divisional Manger of the Society Santosh Kela was in the
witness box. No suggestion was made to him to get on
record that said society is not covered by Section 5 (b) of
Banking Regulation Act and Section 2 (10) of Maharashtra
Co-operative Societies Act. In view of the above
discussion the argument of learned Advocate Mr. Badhe
that those six instruments cannot be termed as cheques
is rejected.
9. The applicant has taken stand that the said six
instruments were in respect of account held by two
persons and, therefore, signature of only one person
namely applicant was insufficient and, therefore, the
instruments should be treated as bad. It is true that the
Bank Manager Santosh Kela has admitted that the said
instrument pertains to Account nos. 85 and 49, which
stand in the name of two persons. However, dishonour
memo does not show that the said instruments do not
bear signatures of necessary parties. Hence, the
arguments advanced by Mr. Badhe that signature of both
account holders were required, cannot be accepted.
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10. It was also argued by learned Advocate
Mr. Badhe that non applicant no. 2 was running chit fund.
It must be mentioned that as many as seven persons
have been examined by the applicant to make effort to
show that non applicant no. 2 was running chit fund.
Leaving apart the evidence of these seven witnesses, I
am inclined to observe that the stand of the applicant
that non applicant no. 2 was running chit fund being
made before this Court is contrary to what was a case of
the applicant at the stage of recording evidence an in
particular cross-examination of the complainant non
applicant no.2. Perusal of the cross-examination of non
applicant no.2-conducted on behalf of the applicant would
go to show that a suggestion was made to non applicant
no.2 that the applicant is running chit fund and non
applicant no. 2 was a member. This suggestion has been
denied by non applicant no.2 If this was a stand of the
applicant, at the stage of recording of evidence of non
applicant no.2, it is really surprising as to how the
applicant could take up stand that non applicant no.2 was
running a chit fund. Be that as it may. Seven persons
who have come to the Court to give evidence have not
been able to give satisfactory and cogent evidence to
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show that non applicant no.2 was running the chit fund.
Shaikh Shabir (DW1), Sk. Mukhtyar (DW2), Abdul Salim
(DW3), Mohd. Azar (DW4), Jagganath (DW5), Mohd Nadim
(DW6), Jumma Umad (DW7) have, in their examination-
in-chief, stated that non applicant no. 2 was running a chit
fund. However, except the bare word of these persons
there is no evidence on behalf of the applicant. There is
no material to show that no applicant no.2 was running a
chit fund. Mere assertion across the bar and mere oral
testimony of some persons cannot be accepted. In
substance, the attempt made by applicant to show that
non applicant no.2 was running a chit fund fails.
11. The applicant has come up with a case that he
had given six cheques to non applicant no.2 as and by
way of security for hand loan, which the applicant had
borrowed from non applicant no.2 It is also the case of
the applicant that the said amount was repaid and the
said six instruments were demanded back. The evidence
on record does not make out a case in that behalf. If at
all the applicant had repaid sum of Rs. 20,000/- there
could have been some documentary evidence to show
that the applicant had repaid Rs.20,000/-. There is no
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document to show that the applicant had repaid Rs.
20,000/-. Similarly, there is nothing on record to show
There is nothing on record to show that the applicant had
demanded the said cheques in writing. In substance, the
case of the applicant that loan amount was repaid and the
cheques were demanded back cannot be accepted. It is
also required to be mentioned that at one stage, it was
contended by applicant that cheques were lost. Except
taking the said stand no efforts were made to prove the
said stand before the Court. The applicant has not
stepped into witness box. If it was the case of the
applicant cheques were lost, he should have entered the
witness box, given details and other particulars to show
as to when the cheques were lost. If it was to the
knowledge of the applicant that the said cheques have
been lost, he should have issued “stop payment” orders
to the said society. Nothing has been done in that behalf.
In substance, the stand taken by applicant before this
Court in this behalf cannot be accepted.
12. It was argued that six cheques were given by
way of security for the repayment of the same of
Rs.20,000/-. It is not stated by applicant anywhere as to
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when he had borrowed money from non applicant no.2, as
to when he had given six cheques to non applicant no. 2
and other relevant details. To that extent, applicant has
failed to discharge burden cast on him. If at all the
applicant’s case is accepted as it is that he was liable to
pay a sum of Rs. 20,000/- to non applicant no.2 it is
inconceivable that he would deliver to non applicant no.2
six instruments signed well in advance. If at all the
applicant wanted to repay the money he could have
easily delivered one instrument in favour of non applicant
no.2 at a time when the applicant wanted to repay the
monies. For the aforesaid reasons, I am inclined to
observe that the applicant has failed to show that six
instruments were given by way of security.
13. It was also argued by Mr. Badhe by placing
reliance on Section 101 of the Indian Evidence Act that if
it was the case of non applicant no.2 that he had
advanced a sum of Rs. 1,60,000/- to the applicant, he
should have produced the documentary evidence in
support of that. This argument also cannot be accepted
because the applicant has not been able to justify the
burden qua issuance of six cheques and delivery of the
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same in favour of non applicant no.2. If the applicant
would have been in a position to discharge the burden
qua six instruments then burden would have shifted on
non applicant no.2 to show as to how he had advanced
sum of Rs. 1,60,000/- to the applicant. The argument
advanced by learned advocate Mr. Badhe is required to be
rejected.
14.
I have perused the impugned judgments, the
learned trial Judge as well as learned Additional Sessions
Judge have considered the entire evidence in proper
perspective. The defence raised by the applicant were
rightly negatived and the case put up by non applicant
no.2 was rightly accepted and the learned trial Judge
came to a proper conclusion that the applicant has
committed an offence punishable under Section 138 of
the Negotiable Instruments Act. The learned Additional
Sessions Judge rightly confirmed the order passed by
learned trial Judge. No interference is required in the
impugned order in revisional jurisdiction of this Court.
15. So far as question of sentence is concerned,
Mr. Badhe prays for leniency as against this Mr. Jain
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submitted that a just and proper sentence has been
passed by learned trial Judge. I have considered this
aspect. I have noted that sentence imposed upon the
applicant. Keeping in view the various facts, I am inclined
to observe that no interference is required on the
quantum of sentence imposed upon the applicant.
For the reasons mentioned aforesaid, the
revision is required to be dismissed. Hence, the order.
The revision is dismissed.
JUDGE
kahale
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