Case Note & Summary
The petitioners, M/s. Biodiversity Conservation India Private Limited and its directors, filed two criminal petitions under Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of the order dated 05.11.2018 passed by the XXVII Additional Chief Metropolitan Magistrate, Bengaluru, taking cognizance and issuing summons in C.C. No. 30012/2018 for offences punishable under Section 138 of the Negotiable Instruments Act, 1881. The respondent, M/s. Vista ITCL (India) Limited, had filed a complaint alleging that a cheque issued by the petitioners was dishonoured. The petitioners contended that the statutory demand notice under Section 138 NI Act was not properly served upon them as it was sent to an incorrect address. The court examined the records and found that the notice was indeed sent to an address that was not the registered office of the company. The court held that proper service of notice is a mandatory requirement under Section 138 NI Act and failure to comply renders the prosecution unsustainable. Consequently, the court allowed the petitions and quashed the proceedings in C.C. No. 30012/2018.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Service of Notice - Proper service of demand notice is a mandatory prerequisite for prosecution under Section 138 of the Negotiable Instruments Act, 1881 - The court held that where the notice was sent to an incorrect address and not served on the accused, the proceedings are liable to be quashed - Held that the complainant must prove that the notice was sent to the correct address of the accused (Paras 5-10). B) Criminal Procedure Code - Inherent Powers - Section 482 - Quashing of Proceedings - The High Court can exercise its inherent powers under Section 482 CrPC to quash criminal proceedings if the continuation of proceedings would amount to abuse of process of law - Held that where the mandatory requirement of service of notice under Section 138 NI Act is not satisfied, the proceedings are liable to be quashed (Paras 11-15).
Issue of Consideration
Whether the criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881 can be sustained when the statutory demand notice was not properly served upon the accused.
Final Decision
The court allowed the petitions and quashed the proceedings in C.C. No. 30012/2018 pending before the XXVII ACMM, Bengaluru.
Law Points
- Section 138 NI Act requires proper service of demand notice
- Section 482 CrPC inherent powers to quash proceedings
- Section 141 NI Act vicarious liability of directors
