Case Note & Summary
The petitioner, IBM India Private Limited, filed writ petitions under Articles 226 and 227 of the Constitution read with Section 482 CrPC to quash the order dated 17.11.2017 passed by the LVIII Additional Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru in CC Nos.56860/2016, 56861/2016, 58368/2016, 58366/2016, 57400/2016, 58367/2016, 56862/2016 and 57399/2016. The respondent, M/s. Org Informatics Ltd. and its officers, had filed complaints under Section 138 of the Negotiable Instruments Act, 1881 alleging dishonour of cheques issued by the petitioner. The petitioner contended that the demand notices were sent by registered post but were returned with endorsement 'refused', and that there was no proper service of notice as required under Section 138. The court examined the evidence on record and found that the complainant had not produced any acknowledgment due card or examined any postal witness to prove service. The court held that mere endorsement of 'refused' on the returned envelope is not sufficient to presume service under Section 27 of the General Clauses Act, 1897. The court quashed the criminal proceedings in all the cases, allowing the writ petitions.
Headnote
A) Criminal Law - Dishonour of Cheque - Section 138 Negotiable Instruments Act, 1881 - Service of Notice - The complainant must prove service of demand notice; mere endorsement of 'refused' on returned envelope is not sufficient to presume service without further evidence such as testimony of postal witness or acknowledgment due card. (Paras 5-10)
B) Criminal Procedure - Quashing of Proceedings - Section 482 CrPC - Abuse of Process - Where the complaint under Section 138 NI Act is filed without proper service of notice, the proceedings are liable to be quashed as an abuse of process of court. (Paras 11-12)
Issue of Consideration
Whether the criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881 can be sustained when the demand notice was sent by registered post but returned with endorsement 'refused' without any other evidence of service?
Final Decision
The court allowed the writ petitions and quashed the criminal proceedings in all the cases, holding that the service of notice was not proved.
Law Points
- Service of notice under Section 138 NI Act must be proved by complainant
- endorsement of 'refused' on envelope insufficient without further evidence
- presumption under Section 27 of General Clauses Act not automatic
- quashing of proceedings under Section 482 CrPC for abuse of process
Case Details
2021 LawText (KAR) (06) 34
Writ Petition No.55906/2017 and connected matters
Sri Thomas Vellapally for petitioner, Sri P.Udaya Shankar Rai for respondents
IBM India Private Limited
M/s. Org Informatics Ltd. and others
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Nature of Litigation
Writ petitions under Articles 226 and 227 of the Constitution read with Section 482 CrPC seeking quashing of criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881.
Remedy Sought
Petitioner sought quashing of the order dated 17.11.2017 passed by the LVIII Additional Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru in CC Nos.56860/2016, 56861/2016, 58368/2016, 58366/2016, 57400/2016, 58367/2016, 56862/2016 and 57399/2016.
Filing Reason
The petitioner challenged the criminal proceedings on the ground that the demand notice under Section 138 NI Act was not properly served as it was returned with endorsement 'refused' without any further evidence of service.
Previous Decisions
The Magistrate had taken cognizance and issued process against the petitioner.
Issues
Whether the demand notice under Section 138 of the Negotiable Instruments Act, 1881 was properly served on the petitioner?
Whether the criminal proceedings can be quashed under Section 482 CrPC for lack of proper service of notice?
Submissions/Arguments
Petitioner argued that the demand notice was sent by registered post but returned with endorsement 'refused', and no acknowledgment due card or postal witness was produced to prove service.
Respondent argued that the endorsement 'refused' on the returned envelope is sufficient to presume service under Section 27 of the General Clauses Act.
Ratio Decidendi
The complainant must prove service of demand notice under Section 138 NI Act; mere endorsement of 'refused' on the returned envelope is not sufficient to presume service without further evidence such as acknowledgment due card or testimony of postal witness.
Judgment Excerpts
Since the parties to these cases are common and common questions of law and facts are involved, they are taken up for disposal by this common order.
The court held that mere endorsement of 'refused' on the returned envelope is not sufficient to presume service under Section 27 of the General Clauses Act.
Procedural History
The respondent filed complaints under Section 138 NI Act in 2016 before the LVIII Additional Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru. The Magistrate took cognizance and issued process. The petitioner filed writ petitions in 2017 seeking quashing of the proceedings. The High Court heard the matter and delivered judgment on 25.06.2021.
Acts & Sections
- Negotiable Instruments Act, 1881: 138
- Code of Criminal Procedure, 1973 (CrPC): 482
- General Clauses Act, 1897: 27
- Constitution of India: 226, 227
