High Court of Karnataka Quashes FIR in Cheque Dishonour Case Due to Lack of Proper Service of Demand Notice. Complaint Under Section 138 of Negotiable Instruments Act, 1881 Fails as Notice Was Not Sent to Correct Address of Accused.

High Court: Karnataka High Court Bench: BENGALURU In Favour of Accused
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Case Note & Summary

The petitioners, accused Nos.1 to 3, filed a petition under Section 482 of CrPC seeking quashment of the complaint in PCR No.107/2019 and the consequent FIR No.353/2019 registered at Bagepalli Police Station, as well as the order dated 05.10.2019 passed by the Civil Judge and JMFC, Bagepalli directing investigation under Section 156(3) of CrPC. The complaint was filed by respondent No.2, Syed Babajan, alleging an offence under Section 138 of the Negotiable Instruments Act, 1881, based on dishonour of a cheque. The petitioners contended that the demand notice under Section 138 was not properly served on them as it was sent to an address where they did not reside at the relevant time. The court examined the complaint and the notice and found that the notice was sent to an address in Bagepalli Town, but the petitioners had moved to a different location. The court held that proper service of demand notice is a prerequisite for maintaining a complaint under Section 138 of NI Act. Since the notice was not sent to the correct address, the complaint was not maintainable. Consequently, the court allowed the petition, quashed the complaint and the FIR, and set aside the order under Section 156(3) of CrPC.

Headnote

A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Proper Service of Demand Notice - The complainant must prove that the demand notice was sent to the correct address of the accused; failure to do so renders the complaint not maintainable - Held that the notice sent to an address where the accused did not reside at the relevant time does not constitute valid service (Paras 5-8).

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Issue of Consideration

Whether the complaint under Section 138 of NI Act and the consequent FIR can be quashed for lack of proper service of demand notice?

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Final Decision

Petition allowed. Complaint in PCR No.107/2019, FIR No.353/2019, and order dated 05.10.2019 under Section 156(3) CrPC are quashed.

Law Points

  • Section 138 of Negotiable Instruments Act
  • 1881 requires proper service of demand notice
  • Section 482 of CrPC for quashing FIR
  • Section 156(3) of CrPC for investigation order
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Case Details

2021 LawText (KAR) (09) 20

Criminal Petition No. 8656 of 2019

2021-09-14

K. Somashekar

D.P. Mahesh for petitioners, Rahul Rai .K (HCGP) for R-1, Sunitha H. Singh for R-2

Chandmiya, Sadiq, Chandrashekhar Reddy

State of Karnataka, Syed Babajan

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Nature of Litigation

Criminal petition under Section 482 CrPC for quashing of complaint and FIR under Section 138 of NI Act

Remedy Sought

Quashment of complaint in PCR No.107/2019, FIR No.353/2019, and order dated 05.10.2019 under Section 156(3) CrPC

Filing Reason

Alleged dishonour of cheque and lack of proper service of demand notice

Previous Decisions

Order dated 05.10.2019 by Civil Judge and JMFC, Bagepalli directing investigation under Section 156(3) CrPC

Issues

Whether the demand notice under Section 138 of NI Act was properly served on the accused? Whether the complaint and FIR are liable to be quashed for lack of proper service?

Submissions/Arguments

Petitioners argued that the demand notice was sent to an address where they did not reside at the relevant time, hence no proper service. Respondent No.2 argued that the notice was sent to the correct address as per the cheque.

Ratio Decidendi

For a complaint under Section 138 of NI Act to be maintainable, the demand notice must be sent to the correct address of the accused. If the notice is not properly served, the complaint is not maintainable and is liable to be quashed under Section 482 CrPC.

Judgment Excerpts

The demand notice was sent to the address where the petitioners were not residing at the relevant time. Proper service of demand notice is a prerequisite for maintaining a complaint under Section 138 of NI Act.

Procedural History

Complainant filed PCR No.107/2019 before Civil Judge and JMFC, Bagepalli, who ordered investigation under Section 156(3) CrPC on 05.10.2019, leading to FIR No.353/2019. Petitioners then filed this petition under Section 482 CrPC for quashing.

Acts & Sections

  • Negotiable Instruments Act, 1881: 138
  • Code of Criminal Procedure, 1973 (CrPC): 482, 156(3)
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High Court High Court of Karnataka Quashes FIR in Cheque Dishonour Case Due to Lack of Proper Service of Demand Notice. Complaint Under Section 138 of Negotiable Instruments Act, 1881 Fails as Notice Was Not Sent to Correct Address of Accused.
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