Case Note & Summary
The petitioners, six individuals, filed a Criminal Writ Petition before the Bombay High Court challenging the order of the Judicial Magistrate First Class, Bhusawal, issuing process against them under Section 138 of the Negotiable Instruments Act, 1881. The complaint was filed by Respondent No.2, Sunil Laxman Dusane, alleging that a cheque issued by the petitioners was dishonoured. The petitioners contended that the complaint was not maintainable as the demand notice was not served within 15 days of dishonour, and that the cheque was given as security for a loan taken by one of the petitioners, not for any existing debt. The court examined the record and found that the complainant failed to prove service of notice within the statutory period. The court also noted that the petitioners had raised a probable defence that the cheque was issued as security, thereby rebutting the presumption under Section 139 of the Act. The court held that the issuance of process was improper and quashed the complaint. The court allowed the writ petition, setting aside the order issuing process and dismissing the complaint.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Service of Notice - The complainant must prove that the demand notice was served on the drawer within 15 days of dishonour; failure to do so renders the complaint not maintainable. The court held that mere dishonour of cheque does not automatically lead to conviction; the statutory requirements under Section 138 must be strictly complied with (Paras 5-8). B) Negotiable Instruments Act - Presumption under Section 139 - Rebuttal - The presumption that the cheque was issued for discharge of debt or liability can be rebutted by the accused by raising a probable defence. In this case, the accused successfully rebutted the presumption by showing that the cheque was given as security and not for any existing debt (Paras 9-10).
Issue of Consideration
Whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 is maintainable when the complainant fails to prove service of demand notice within 15 days of dishonour of cheque?
Final Decision
The court allowed the writ petition, quashed the order issuing process, and dismissed the complaint under Section 138 of the Negotiable Instruments Act, 1881.
Law Points
- Service of notice under Section 138 of Negotiable Instruments Act
- 1881 must be proved by complainant
- Dishonour of cheque alone not sufficient for conviction
- Presumption under Section 139 can be rebutted
- Burden on complainant to show notice served within 15 days
