Summons Case No.

5800240/SS/2019
Judgment Exh.74

MHMM180022002019

Filed on :14.03.2019
Registered on :14.03.2019
Decided on :21.06.2025
Duration :06-Y 03-M 07-D

IN THE COURT OF JUDICIAL MAGISTRATE (FIRST CLASS),

58TH COURT, BANDRA, MUMBAI.
(Presided over by M. P. Saraf)
Summons Case No.5800240/SS/2019
(CNR NO.MHMM180022002019)
Exh.74
Sarika Bedi w/o. Mr. Vijay Khemlani
Age :44 years, Occ. Service,
R/o. At A/4, Sindhi Niwas, 1st floor, Sitladevi …. Complainant.
Temple Mahim(W), Mumbai 400 016.
Versus
1)Mr. Amar Rajkumar Krishnani
Age :44 years, Occ. Service,
R/o. Vivekanand Co-op. Hsg., Society Ltd.,
Building No.5, Flat No.8, Lady Jamshetji Road
next to Hotel Shobha, Mahim (W), Mumbai-16.
2)Rajkumar Krishnani (Process not issued) …. Accused.

Offence U/sec.138 of the Negotiable Instruments Act, 1881.

Ms. Aditi Chavan Advocate for the complainant.

Mr. Bhushan Ove and Mr.Adnan Advocate for accused No.1.
Mookhtiah
JUDGMENT
(Delivered on 21.06.2025)

Accused is prosecuted for the offence punishable under

section 138 of the Negotiable Instrument Act, 1881, for the reason of
dishonor of cheques alleged to be issued against the repayment of loan.

Digitally signed by
MAHESH
PRABHAKAR SARAF
Date: 2025.06.21
17:46:03 +0530
 2 Summons Case No.5800240/SS/2019
Judgment Exh.74

2. Complainant’s case in nut shell is as follows:

That she is serving with one private limited company.

Accused No.1 is her good friend knowing each other since last 25 years.
Somewhere in third week of January 2017 accused approached her and
requested for a temporary loan of Rs.20 lakhs for a period of 18
months. Accused promised her to repay the loan with interest @ 18 %
p.a. Being childhood friends, she gave the personal loan of Rs.20 lakhs
to the accused by cheques dated 06.03.2017 for Rs.5 lakhs and
10.04.2017 for Rs.15 lakhs. For repayment of friendly loan accused
No.1 issued subject two cheques for Rs.5 lakhs and Rs.15 lakhs dated
14.01.2019. Besides these two cheques accused has also issued other
seven cheques against the interest amount. On depositing the two
cheques dated 14.01.2019 issued against repayment of loan, the same
returned unpaid with remarks ‘Insufficient Funds’ on 15.01.2019.
Accused was called upon to make payment of dishonored cheques vide
notice dated 28.01.2019 issued to the accused. Accused failed to make
payment despite receiving notice within 15 days. Hence, this complaint.

3. My Ld. Predecessor taken cognizance of the complaint and

issued process only against accused No.1 under section 138 of
Negotiable Instruments Act. On appearance of the accused No.1,
particulars of offence were stated to him in vernacular to which he
pleaded not guilty vide Plea Exh.10 and claimed to be tried. The case
was tried as summons trial.

4. The statement of accused was recorded under section 313

of Code of Criminal Procedure at Exh.41. The defence of the accused
in short is denial of liability, money lending transaction, issuance of
cheque towards security.
Digitally signed by
MAHESH
PRABHAKAR SARAF
Date: 2025.06.21
17:46:11 +0530
 3 Summons Case No.5800240/SS/2019
Judgment Exh.74

5. Heard, advocate Ms. Aditi Chavan, Ms. Yogita Saralkar for

the complainant. Perused written notes of arguments filed on behalf of
complainant at Exh.70. Heard advocate Mr. Bhushan Ove for the
accused.

6. On hearing both sides following points arise for my

determination to which I have recorded my findings with reasons
thereto as follows-

Sr.No. POINTS FINDINGS

1. Whether it is proved that the accused have
drawn subject cheque bearing No.043732
dated 14.01.2019 for Rs.5 lakhs and cheque
bearing No.073062 dated 14.01.2019 for
: No.
Rs.15 lakhs on Union Bank, Matunga(W)
Branch, Mumbai, in favour of the
complainant in discharge of the legal debt or
liability to repay the loan amount?
2. Whether it is proved that the cheque in
question was dishonored for the reason
: Yes.
‘Funds Insufficient’ and returned unpaid to
the complainant?
3. Whether it is proved that the accused have
received demand notice dated 28.01.2019,
issued u/sec.138(b) of the Negotiable
Instruments Act sent by the complainant
making demand of payment of said cheques : Yes.
amount in writing within one month of
receipt of information from the bank
regarding dishonour of cheques?

4. Whether it is proved that despite service of

demand notice, the accused failed to pay the
cheques amount within statutory period of 15 : No.
days after receiving notice and thereby
committed an offence punishable under
section 138 of the Negotiable Instruments
Act?

Digitally signed by
MAHESH PRABHAKAR
SARAF
Date: 2025.06.21 17:46:27
+0530
 4 Summons Case No.5800240/SS/2019
Judgment Exh.74

5. What order? : Accused is held

not guilty and
acquitted.
REASONS

7. To substantiate the contention raised in the complaint,

complainant has examined himself as PW-01 at Exh.05. Besides oral
evidence complainant has relied upon her bank account statement at
Exh.11, subject cheques towards repayment of loan at Exh.12 and 13,
the seven cheques alleged to be issued against interest at Exh.14 to 20,
E-mail dated 09.03.2019 at Exh.21, cheque return memos of subject
cheques at Exh.22 and 23, office copy of demand notice dated
28.01.2019 at Exh.24, postal receipts at Exh.25 and 26,
acknowledgement card at Exh.27, notice reply given by accused No.2
dated 11.02.2019 at Exh.29 and closed evidence.

AS TO POINT NO.1:-

8. It is the case of the complainant that she lent loan of Rs.20

lakhs to the accused at the rate of interest of 18 % per annum. The
accused issued subject cheque in discharge of said liability and the
same were dishonored. As against it, the accused has taken defence of
total denial of committing any offence, issuing cheques towards
security and money lending transaction.

9. For proving offence under section 138 of the Negotiable

Instrument Act, complainant has to prove essentially five main
ingredients of the section. Drawing cheque on the account by the
drawer in discharge of legal liability, its dishonour, demand within
statutory period after noticing dishonour of the cheque etc. needs to be
proved by the complainant beyond all reasonable doubt to shift the
Digitally signed by
MAHESH
PRABHAKAR SARAF
Date: 2025.06.21
17:46:37 +0530
 5 Summons Case No.5800240/SS/2019
Judgment Exh.74

onus of burden of proof on the party that is accused who is denying any
liability and resultant committing of an offence. In comparison to the
complainant, the burden of proof is some what lesser upon the accused.

10. The pleading by way of averments made in the demand

notice, complaint and affidavit in lieu of examination in chief itself
indicates that the transaction of advancing loan of Rs.20 lakhs on
interest to accused No.1 was the money lending transaction. Now
question crops up whether complainant is authorized legally to lend
money on interest either as a friendly loan or loan as a business?
Needless to state that in view of the provisions of the Bombay Money
Lenders Act,1946, the person whomsoever lending money must possess
valid licence or permission of the Competent Authority to lend money.
The complainant has admitted in her cross examination that she do not
possess money lending licence. In fact, she has tried to clarify her
answer voluntarily stating that the transaction was of friendly loan out
of childhood friendship with accused No.1 without interest. However,
her clarification in cross examination appears contrary to averments
made in demand notice, complaint and evidence affidavit.

11. It is quite clear from the oral evidence of the complainant

as well as documentary evidence such as E-mail Communication
Exh.21, Demand notice Exh.24, Complaint Exh.01, that the transaction
in between parties was an illegal money lending transaction. Ld.
Advocate for the complainant submitted that accused himself has
agreed and promised to pay interest at the rate of 18% on principal
Loan amount. On his promise or offer, complainant has lend such a
huge amount to the accused which speaks for the contract in between
parties. The Agreement that is act of lending money on said promise of
Digitally signed by
MAHESH PRABHAKAR
SARAF
Date: 2025.06.21 17:46:44
+0530
 6 Summons Case No.5800240/SS/2019
Judgment Exh.74

the accused certainly falls within the definition of Money Lending

business. The activity can not be co-related to a pious obligation out of
love or childhood friendship. Several cheques are produced at Exh.14
to 20. The same seems to be issued by the accused No.1 against
monthly interest. It clearly shows acting upon by the complainant on
the promise of accused resulting into a loan transaction on interest
which is prohibited by law without licence.

12. In that context let us see whether law permits such

transactions to consider existence of legal liability or legal debt as
envisaged in explanation to section 138 of the Act. Therefore, it
appears necessary to go through the definition of ‘business of money
lending’, ‘interest’, ‘loan’, ‘money lender’ etc.

13. Section 2(3) of The Maharashtra Money Lending

(Regulation) Act, 2014 defines ‘Business of money lending’. It means
the business of advancing loans whether in cash or kind and whether or
not in connection with, or in addition to any other business.

14. Section 2(9) of The Maharashtra Money Lending

(Regulation) Act, 2014 defines what is an ‘interest’. Interest includes,
any sum by whatsoever name called, in excess of the principal paid or
payable to a money lender in consideration of, or otherwise in respect
of, a loan but does not include any sum lawfully charged by a money
lender for, or, on account of costs, charges or expenses in accordance
with the provisions of this Act or any other law for the time being in
force.

15. Section 2(13) of The Maharashtra Money Lending

(Regulation) Act, 2014 defines what is ‘loan’. Loan means an advance
Digitally signed by
MAHESH
PRABHAKAR SARAF
Date: 2025.06.21
17:46:52 +0530
 7 Summons Case No.5800240/SS/2019
Judgment Exh.74

at interest whether of money or in kind but does not include the

various exceptions given in section 13(a) to 13(m) of the Act.

16. Section 2(14) of The Maharashtra Money Lending

(Regulation) Act, 2014 defines who is ‘money lender’. Money lender
means an individual; or an undivided Hindu Family; or a Company
other than a Non Banking Financial Company regulated under Chapter
IIIB of the Reserve Bank of India Act, 1934(2 of 1934), an
unincorporated body of individuals etc.

17. It is submitted on behalf of complainant that she is not

doing money lending business. In that context the words providing loan
on interest @ 18% per annum and the demand made in demand notice
get importance and compels to look into the provisions of The
Maharashtra Money Lending (Regulation) Act, 2014. The definition of
business of money lending under section 2(3) of the Act defines
business of advancing loans in cash or kind. Interest is defined as
whatsoever amount or any sum in excess of the principal paid or
payable. So far as the loan by way of finance is concerned, the same
does not fall within the exceptions under section 13 (a) to 13(m) of the
Act. Therefore, only inference can be drawn that the transaction of
friendly loan against interest is nothing but a money lending
transaction in between complainant and accused.

18. Now once it is proved as money lending transaction,

complainant is bound by the provisions of The Maharashtra Money
Lending (Regulation) Act, 2014, which mandatorily requires obtaining
requisite money lending licence for indulging into such business
activity. Section 13 of the Act prohibits the courts to pass a decree in
favour of money lender who does not possess a valid licence. Therefore,
Digitally signed by
MAHESH PRABHAKAR
SARAF
Date: 2025.06.21
17:46:59 +0530
 8 Summons Case No.5800240/SS/2019
Judgment Exh.74

considering the nature of transaction of advancing particular amount

against interest for 18 months or any term, falls within the ambit of
business of money lending as defined under section 2 (3) of the Act.
The loan comes within the ambit of definition of loan at interest as
defined under section 2(13) of the Act.

19. Therefore, there is reason to believe that the transaction of

providing loan by the complainant to the accused is nothing but
advancing a loan on interest without holding valid money lending
licence. The transaction being barred under section 13 of the
Maharashtra Money Lending (Regulation) Act, 2014, whatever amount
even though due towards accused can not be said to be a legal debt or
legal liability within the ambit of explanation to section 138 of the
Negotiable Instrument Act. An illegal money lending transaction does
not confer the debt a status of legal debt so as to come within the ambit
of section 138 of the Negotiable Instrument Act. It can not be legalized
on the basis of personal relations of friendship in between complainant
and accused No.1.

20. Much emphasis is given on the presumption of law under

section 139 of the Negotiable Instrument Act by the advocate for
complainant. He has also relied upon Judgment of Hon’ble Apex Court
in the case of Rajesh Jain V/s Ajay Singh. Needless to state that the sum
and substance of the ratio laid down in the Judgment citated supra
speaks as to shifting the burden of proof on the accused than on
complainant to prove by preponderance of probabilities that there was
no debt or liability. It states that “Courts ought to have proceeded on
the premise that the cheque was, indeed, issued in discharge of a
debt/liability.”
Digitally signed by
MAHESH
PRABHAKAR SARAF
Date: 2025.06.21
17:47:06 +0530
 9 Summons Case No.5800240/SS/2019
Judgment Exh.74

21. With due respect to the ratio laid down in the case cited
supra by the Hon’ble Supreme Court, law under section 139 presumes
issuing cheque in discharge of debt or liability but the initial burden
always remains on the complainant to prove that subject cheque was
issued in discharge of legal debt or legally enforceable liability as
provided in the explanation clause of the section 138. There is no
presumption of law to presume existence of legal debt or liability
merely on issuance of cheque. In fact considering theory of reverse
burden of proof, onus equally shifts upon the accused to prove that the
transaction was otherwise than a legal transaction and subject cheque
was not issued in discharge of legal debt or legally enforceable liability.

22. For that purpose accused is permitted to seek admissions in

cross examination of complainant and witnesses or bring such
suspicious circumstances on record to question the legality of the
transaction. He need not step into witness box to rebut the presumption
of law under section 139.

23. Proving existence of legal debt or enforceable liability is

sine qua non for availing the presumption under section 139 of the Act.
The presumption under section 139 of Negotiable Instrument Act will
not accrue in favour of the complainant only being custodian of the
disputed cheques without proving existence of legal liability against the
accused persons beyond all reasonable doubts.

24. The accused has succeeded in rebutting the presumption

by seeking various admissions in the cross examination of the
complainant as to receiving Rs.6 lakhs from Sony Sunita, Stuti Sagar
and Ruchika Sony, Asha Thneshwar Datta etc creating a reasonable
doubt upon the case of the complainant. The same denotes the activity
Digitally signed by
MAHESH PRABHAKAR
SARAF
Date: 2025.06.21
17:47:14 +0530
 10 Summons Case No.5800240/SS/2019
Judgment Exh.74

of lending money to several persons on interest. The same makes the

defence of the accused quite probable to accept that complainant is
indulged in illegal money lending business. Therefore, complainant
would not be benefited by the presumption of law under section 139 of
the Act.

25. It is well settled law that the burden of proof kept on

complainant in a criminal trial is higher than the proof required by the
accused. The standard of proof required for proving case by the
complainant is based on the principal of beyond all reasonable doubt.
As against it the standard of proof, its degree is quite lesser upon the
accused in comparison to complainant. For establishing the defence
probable, accused need not want to step into witness box as held in the
case of M/s. Kumar Exports Vs. M/s. Sharma Carpets .

26. No doubt the evidence on record speaks for receiving

money for Rs.20 lakhs by the accused No.1 from complainant, issuing
subject cheques by the accused to the complainant. However, basically
the transaction being illegal as of money lending nature, it can not said
that a legal debt or legally enforceable liability exists against the
accused to honour the cheques. The defence of the accused that
cheques were issued towards security appears probable. The averments
made in the basic document of demand notice and complaint itself has
falsified case of the complainant. Hence, I answer point No.1 in the
negative.

AS TO POINT NO.2 :

27. The complainant has produced the cheque return memos

at Exh.22 and 23 which shows dishonour of cheques for the reason
Digitally signed by
MAHESH PRABHAKAR
SARAF
Date: 2025.06.21
17:47:20 +0530
 11 Summons Case No.5800240/SS/2019
Judgment Exh.74

‘Funds Insufficient’ in the account of accused No.1. It bears seal and

signature of the issuing authority. The reason of dishonor is not
seriously disputed by the accused. In view of presumption under
section 146 of the Act, I answer the point No.2 in the affirmative.

AS TO POINT NO.3 :

28. Complainant has produced office copy of the demand

notice at Exh.24. Notice was sent by registered post to the accused.
Postal receipts Exh.25 and 26 alongwith AD cards Exh.27 and 28
corresponds to the same. Accused No.2 against whom process is not
issued as replied the demand notice. The demand notice also speaks for
lending money with 18% interest on the total loan amount coupled
with demand of the principal loan amount alongwith interest @ 18 %
per annum. The notice is legal and valid as contemplated under section
138(b) of the Act. Therefore, the defence of accused that he has not
received the notice appears false. Hence, I answer point No.3 in the
affirmative.

AS TO POINT NOS.4 AND 5 :

29. For proving the guilt of the accused u/sec.138 of the

Negotiable Instrument Act, first of all the complainant must prove
existence of legal liability or debt, issuing of cheques in discharge of
such legal debt or legally enforceable liability etc.

30. As stated above the transaction in between parties appears

to be an illegal money lending transaction. Criminal liability under
section 138 applies only in case of legal debt or legal liability.
Therefore, the cheques can not be said to be issued against the legal
liability. Hence, I answer point No.4 in the negative.
Digitally signed by
MAHESH
PRABHAKAR SARAF
Date: 2025.06.21
17:47:27 +0530
 12 Summons Case No.5800240/SS/2019
Judgment Exh.74

31. In view of above findings and evidence on record I pass

following order.
ORDER

1. The accused is acquitted of the offence punishable under

section 138 of the Negotiable Instruments Act, 1881 vide
section 255(1) of The Criminal Procedure Code and section
278 (1) of the Bhartiya Nagarik Suraksha Sanhita, 2023.

2. Bail bond of accused stands cancelled.

3. The accused to comply section 437(A) of Code of Criminal

Procedure and section 481 of the Bhartiya Nagarik Suraksha
Sanhita, 2023 and furnish surety for further period of six
months from today.
(Judgment dictated and pronounced in open Court).

Digitally signed by
MAHESH
PRABHAKAR SARAF
Date: 2025.06.21
17:47:37 +0530

( M. P. Saraf )
Judicial Magistrate(First Class),
Date : 21.06.2025 58th Court, Bandra, Mumbai.
J.O.Code: MH01362
 13 Summons Case No.5800240/SS/2019
Judgment Exh.74

CERTIFICATE

I affirm that the contents of this P.D.F. file Judgment are same, word to word as per
the original Judgment.
Name of Stenographer : Mrs.Aditi Ravikiran Dalvi
Court : Judicial Magistrate(First Class), 58th Court,
Bandra, Mumbai.
Dictated in open court on : 21.06.2025.
Transcribed and Typed on : 21.06.2025.
Judgment printed and Signed on : 21.06.2025.
Judgment Uploaded on : 21.06.2025.