Criminal Appeal No. 56 of 2010. Case: Sheikh Shabbir Vs Shaikh Yusuf. High Court of Bombay (India)

Case NumberCriminal Appeal No. 56 of 2010
CounselFor Appellant: Sudesh Usgaonkar, Ms. R. Pereira, Advs. and For Respondents: T. Pereira, Adv.
JudgesA. P. Lavande, J.
IssueNegotiable Instruments Act (26 of 1881) - Sections 138, 142(b); Goa Money-Lenders Act (58 of 2001) - Section 2(1)
Citation2012 CriLJ 4743
Judgement DateSeptember 10, 2012
CourtHigh Court of Bombay (India)


1. Heard Mr. Sudesh Usgaonkar, learned counsel for the appellant and Mr. Pereira, learned counsel for the respondent.

2. 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).

3. 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 ` 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 ` 12,50,000/- (Rupees twelve lakhs fifty thousand only) in the form of ` 25,000/- per month for 50 months. Accordingly, the complainant handed over ` 5 lakhs to the accused to be invested in the business and memorandum of understanding dated 25.7.2008 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 ` 25,000/- per month as agreed. Hence, the complainant requested the accused to return ` 5 lakhs. The accused issued the cheque dated 23.3.2009 drawn on Punjab National Bank, Vasco-da-Gama in favour of the complainant for an amount of ` 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 30.4.2009, the complainant was informed that the cheque was returned unpaid by the Punjab National Bank, Vasco-da-Gama under memo dated 29.4.2009 with endorsement 'funds insufficient'. The complainant issued a legal notice dated 18.5.2009 to the accused and requested the accused to pay the amount of ` 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 4.7.2009.

4. 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.

5. 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 25.7.2008 entered into between the parties.

6. 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 18.5.2009 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.

7. 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 18.5.2009 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 18.5.2009 of Panaji HO is settled on 30.6.2009 with the following information that 'Delivered on 19.5.2009'.

Thanking You,

Yours faithfully,




According to the complainant, he was informed by the Postal Authorities that the legal notice dated 18.5.2009 addressed by the complainant, was received by the accused on 19.5.2009, only on 30.6.2009 and, therefore, the complaint filed on 4.7.2009 was within the period prescribed under Section 142(b) of the Act.

8. 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 25.7.2008 Ex-hibit 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.

9. 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 18.5.2009 issued by his Advocate, was not addressed on the correct address. He also denied the suggestion that the notice dated 18.5.2009 was never tendered by the Postal Authorities to the accused at his correct address and that letter dated 30.6.2009 Exhibit C-10 was fabricated and was issued without verifying the records. He also denied the suggestion that the registered letter dated 18.5.2009 did not contain any notice. He denied the suggestion that he did not give an amount of ` 5 lakhs or any other amount to the accused or that the amount of ` 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 25.7.2008 which was for sharing profits. He claimed ignorance as to whether the business in which he invested ` 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 25.7.2008. 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...

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