Case Note & Summary
The petitioners, M/s Indo International Ltd. and U.M. Lodha, were the original accused in a complaint filed by the respondent-complainant under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of cheques. The complainant alleged that the cheques issued by the petitioners were dishonoured, and a demand notice was sent by registered post. However, the petitioners contended that the notice was sent to an incorrect address, and they never received it. The High Court examined the facts and found that the notice was dispatched to an address that was not the registered office or the correct address of the petitioners. The court held that for an offence under Section 138 NI Act, the demand notice must be sent to the correct address of the accused. The burden is on the complainant to prove that the notice was sent to the correct address. Since the complainant failed to establish that the notice was sent to the correct address, the essential ingredient of the offence was not made out. Consequently, the court quashed the criminal proceedings in all the petitions. The court also noted that the respondent No.2 appeared in person and made submissions, but could not demonstrate that the notice was sent to the correct address. The judgment was pronounced on 25th July 2005 by Justice Abhay S. Oka.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Demand Notice - Proper Service - The complainant must prove that the demand notice was sent to the correct address of the accused. Sending notice to a wrong address does not constitute valid service, even if sent by registered post. The court held that the burden is on the complainant to establish that the notice was dispatched to the correct address. (Paras 1-10) B) Criminal Procedure Code - Quashing of Complaint - Inherent Powers - Section 482 CrPC - The High Court can quash criminal proceedings if the complaint does not disclose the essential ingredients of the offence. Where the demand notice was not served at the correct address, the proceedings under Section 138 NI Act are liable to be quashed. (Paras 1-10)
Issue of Consideration
Whether the demand notice under Section 138 of the Negotiable Instruments Act, 1881 was validly served on the accused when sent by registered post to an address that was not the correct address of the accused?
Final Decision
The High Court allowed the petitions and quashed the criminal proceedings in all the writ petitions. The court held that the demand notice was not served at the correct address of the petitioners, and therefore the essential ingredient of Section 138 NI Act was not satisfied. The proceedings were quashed.
Law Points
- Proper service of demand notice is mandatory for Section 138 NI Act
- notice must be sent to correct address
- registered post acknowledgment due is sufficient mode
- burden on complainant to prove service
