Case Note & Summary
The petitioner, Santosh Steel Traders, through its proprietor Satish Rathi, filed two criminal writ petitions challenging the orders dated 07.03.2019 passed in S.C.C. Nos. 321/2016 and 322/2016 by the Judicial Magistrate First Class, Jalna. The respondent in the first petition was Shyamsundar Loya, and in the second petition, Kailas Loya. The core issue was the legality of the criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881, for dishonour of cheques. The petitioner argued that the complaints were not maintainable because the respondents had failed to issue a mandatory pre-issuance notice as required under the proviso to Section 138. The court, after hearing both sides, found that the demand notice was not issued prior to the filing of the complaint, which is a condition precedent for the offence. The court held that without a valid notice, the essential ingredients of Section 138 are not satisfied, and the proceedings are liable to be quashed. The court allowed the petitions, quashed the orders dated 07.03.2019, and dismissed the complaints. The judgment emphasized the strict compliance required for the notice requirement under Section 138.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Pre-issuance Notice - The court considered whether the failure to issue a mandatory notice demanding payment before filing a complaint under Section 138 renders the complaint invalid. The court held that the requirement of a valid demand notice is a condition precedent for the offence under Section 138, and non-compliance vitiates the proceedings. (Paras 3-4)
B) Criminal Procedure Code - Quashing of Proceedings - Section 482 - The court exercised its inherent powers under Section 482 CrPC to quash the criminal proceedings where the complaint was filed without a valid pre-issuance notice, as continuing such proceedings would be an abuse of process of law. (Para 4)
Issue of Consideration
Whether the criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881 are maintainable when the complainant failed to issue a mandatory pre-issuance notice as required under the proviso to Section 138?
Final Decision
The court allowed the petitions, quashed the orders dated 07.03.2019 passed in S.C.C. Nos. 321/2016 and 322/2016, and dismissed the complaints. Rule made absolute.
Law Points
- Section 138 Negotiable Instruments Act
- 1881
- Pre-issuance notice
- Demand notice
- Cheque dishonour
- Criminal proceedings
- Quashing
Case Details
2019 LawText (BOM) (08) 23
Criminal Writ Petition No.784 of 2019 and Criminal Writ Petition No.789 of 2019
Mr. Chandak Raviraj R. for petitioners, Mr. Gangakhedkar Shailendra S. for respondents
Santosh Steel Traders Through its Proprietor, Satish s/o Nandlal Rathi
Shyamsundar s/o Rameshwar Loya (in WP 784/2019) and Kailas s/o Rameshwar Loya (in WP 789/2019)
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Nature of Litigation
Criminal writ petitions challenging the legality of orders passed in S.C.C. Nos. 321/2016 and 322/2016 under Section 138 of the Negotiable Instruments Act, 1881.
Remedy Sought
Petitioner sought quashing of the orders dated 07.03.2019 and dismissal of the complaints for non-compliance with mandatory pre-issuance notice requirement.
Filing Reason
The complaints under Section 138 were filed without issuing a mandatory demand notice prior to filing, which is a condition precedent for the offence.
Previous Decisions
The Judicial Magistrate First Class, Jalna passed orders on 07.03.2019 in S.C.C. Nos. 321/2016 and 322/2016, which were challenged in these petitions.
Issues
Whether the criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881 are maintainable when the complainant failed to issue a mandatory pre-issuance notice as required under the proviso to Section 138?
Submissions/Arguments
Petitioner argued that the complaints were not maintainable because the respondents failed to issue a mandatory pre-issuance notice as required under the proviso to Section 138 of the Negotiable Instruments Act, 1881.
Respondents opposed the petitions, but the court found that the demand notice was not issued prior to filing the complaint.
Ratio Decidendi
The requirement of a valid demand notice under the proviso to Section 138 of the Negotiable Instruments Act, 1881 is a condition precedent for the offence of cheque dishonour. Non-compliance with this mandatory requirement renders the complaint invalid and the criminal proceedings liable to be quashed under Section 482 of the Code of Criminal Procedure, 1973.
Judgment Excerpts
The challenge raised in the petitions confines to the legality of the orders dated 07.03.2019 passed in S.C.C. Nos. 321/2016 and 322/2016.
The court held that the demand notice was not issued prior to filing the complaint, which is a condition precedent for the offence under Section 138.
Procedural History
The petitioner filed two criminal writ petitions challenging the orders dated 07.03.2019 passed by the Judicial Magistrate First Class, Jalna in S.C.C. Nos. 321/2016 and 322/2016. The court heard both petitions together and allowed them, quashing the orders and dismissing the complaints.
Acts & Sections
- Negotiable Instruments Act, 1881: 138
- Code of Criminal Procedure, 1973: 482
