Bombay High Court Quashes Process Issued Under Section 138 of Negotiable Instruments Act Against Accused in Dishonour of Cheque Case Due to Lack of Proper Service of Notice. Court Held That Service of Notice Under Section 138(b) Must Be Proved by Complainant and That Summons to Accused Must Be Served at Correct Address.

High Court: Bombay High Court Bench: BOMBAY In Favour of Accused
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Case Note & Summary

The petitioners, original accused Nos. 3 to 6, filed a criminal writ petition challenging the order dated 3rd April 2003 issuing process under Section 138 of the Negotiable Instruments Act, 1881 passed by the Judicial Magistrate First Class, Pune, and the order dated 23rd December 2003 passed by the 4th Additional Sessions Judge, Pune in Criminal Revision Application No. 864 of 2003 rejecting their application for recall of process. The respondent No. 1, a partnership firm, had filed a complaint alleging that a cheque issued by the accused was dishonoured. The petitioners contended that the notice of demand under Section 138(b) was not served on them as it was sent to an incorrect address. The court examined the facts and found that the notice was indeed sent to a wrong address and the petitioners did not receive it. The court held that service of notice is a mandatory requirement under Section 138(b) and the complainant must prove proper service. Since the notice was not served, the process issued was without jurisdiction. The court also held that the revisional court erred in rejecting the application for recall of process. The court allowed the petition, quashed the process issued against the petitioners, and set aside the revisional order.

Headnote

A) Negotiable Instruments Act - Dishonour of Cheque - Service of Notice - Section 138(b) - The complainant must prove that the notice of demand was served on the accused before filing the complaint. In this case, the notice was sent to an incorrect address, and the accused did not receive it. The court held that the process issued without proper service of notice is liable to be quashed. (Paras 2-10)

B) Criminal Procedure Code - Recall of Process - Section 204 - The court has inherent power to recall process if it is satisfied that the process was issued without proper application of mind or on incorrect facts. The revisional court erred in rejecting the application for recall of process. (Paras 11-15)

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Issue of Consideration

Whether the process issued under Section 138 of the Negotiable Instruments Act, 1881 can be recalled when the notice of demand was not properly served on the accused?

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Final Decision

The petition is allowed. The order dated 3rd April 2003 issuing process and the order dated 23rd December 2003 rejecting recall of process are quashed and set aside. The process against the petitioners is recalled.

Law Points

  • Service of notice under Section 138(b) of Negotiable Instruments Act must be proved by complainant
  • Summons must be served at correct address
  • Process can be recalled if issued without proper service
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Case Details

2019 LawText (BOM) (08) 104

Criminal Writ Petition No. 600 of 2004

2019-08-08

S.S. Shinde, J.

Mr. Prabhakar M. Jadhav i/by. Vishwajit Sawant for Petitioner, Mrs. M.R. Tidke, APP for Respondent – State

Mr. Mahavir Babagonda Patil, Prafulla Mahavir Patil, Mr. Pravin Mahavir Patil, Mr. Pramod Mahavir Patil

M/s. Tirupati Traders, M/s. Mahavir Trading Company, Mr. Prakash Manohar Desai, The State of Maharashtra

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Nature of Litigation

Criminal writ petition challenging issuance of process under Section 138 of Negotiable Instruments Act and rejection of application for recall of process.

Remedy Sought

Quashing of process issued against petitioners and setting aside of revisional order rejecting recall of process.

Filing Reason

Petitioners alleged that notice of demand under Section 138(b) was not served on them as it was sent to incorrect address.

Previous Decisions

Order dated 3rd April 2003 issuing process by JMFC Pune; Order dated 23rd December 2003 rejecting recall of process by 4th Additional Sessions Judge, Pune.

Issues

Whether the process issued under Section 138 of the Negotiable Instruments Act can be recalled when the notice of demand was not properly served on the accused? Whether the revisional court erred in rejecting the application for recall of process?

Submissions/Arguments

Petitioners argued that notice of demand was sent to wrong address and they never received it, hence process is illegal. Respondent argued that notice was properly served and process was valid.

Ratio Decidendi

Service of notice under Section 138(b) of the Negotiable Instruments Act is a mandatory requirement. If the notice is not served on the accused at the correct address, the process issued under Section 138 is without jurisdiction and liable to be quashed. The court has inherent power to recall process if it is satisfied that the process was issued without proper application of mind or on incorrect facts.

Judgment Excerpts

The Respondent No. 1 is a partnership firm represented through its partner, has filed Criminal Complaint No. 3844 of 2003... This Petition taken an exception to the order dated 3rd April 2003 of issuance of process...

Procedural History

The complaint was filed in 2003. Process was issued on 3rd April 2003. Petitioners filed Criminal Revision Application No. 864 of 2003 which was rejected on 23rd December 2003. Thereafter, the present writ petition was filed in 2004 and decided on 8th August 2019.

Acts & Sections

  • Negotiable Instruments Act, 1881: 138
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