Case Note & Summary
The applicants, who are the accused in a complaint under Section 138 of the Negotiable Instruments Act, 1881, filed a criminal application before the Bombay High Court seeking quashing of the criminal proceedings. The complaint was filed by the respondent No.2, Dr. Sow. Sonali Rajesh Shejwale, alleging that a cheque issued by the applicants was dishonoured. The applicants contended that the demand notice was not properly served upon them as it was sent to an incorrect address and there was no evidence of actual delivery or refusal. The court examined the provisions of Section 138 of the NI Act and the requirement of proper service of notice. The court noted that the notice was sent by speed post but the postal acknowledgment was not produced, and the address on the notice was not the correct address of the applicants. The court held that the mandatory requirement of service of notice was not complied with, and therefore, the criminal proceedings could not be sustained. The court quashed the proceedings and discharged the applicants.
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 notice must be sent to the correct address of the accused and must be proved to have been delivered or refused - In the present case, the notice was sent by speed post but was not delivered to the accused's correct address, and there was no evidence of refusal - Held that the proceedings are liable to be quashed (Paras 5-8).
Issue of Consideration
Whether the criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881 can be sustained when the demand notice was not properly served upon the accused?
Final Decision
The court allowed the criminal application and quashed the criminal proceedings against the applicants. The applicants are discharged.
Law Points
- Proper service of demand notice is mandatory for Section 138 NI Act
- Notice must be sent to the correct address of the accused
- Service by speed post must be proved as actually delivered or refused
- Presumption of service under Section 27 of General Clauses Act is rebuttable
Case Details
2017 LawText (BOM) (02) 5
Criminal Application No.718 of 2016
S.S. Shinde, K.K. Sonawane
Mr.N.L. Choudhari for Applicants, Mr.S.Y. Mahajan, Additional Public Prosecutor for Respondent No.1, Mr.Vijay B. Patil for Respondent No.2
Shashikant Samarth Pawar, Mrs. Shobha Shashikant Pawar, Balasaheb Sukhdeo Birhade, Sow. Manisha Balasaheb Birhade
State of Maharashtra, Dr. Sow. Sonali Rajesh Shejwale
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Nature of Litigation
Criminal application for quashing of proceedings under Section 138 of the Negotiable Instruments Act, 1881.
Remedy Sought
Quashing of criminal proceedings in complaint case under Section 138 of NI Act.
Filing Reason
The applicants alleged that the demand notice was not properly served upon them as it was sent to an incorrect address and there was no evidence of delivery or refusal.
Issues
Whether the demand notice under Section 138 of the Negotiable Instruments Act, 1881 was properly served upon the accused?
Whether the criminal proceedings can be sustained without proper service of notice?
Submissions/Arguments
The applicants argued that the notice was sent to an incorrect address and there was no proof of delivery or refusal.
The respondent No.2 argued that the notice was sent by speed post and there is presumption of service.
Ratio Decidendi
Proper service of demand notice is a mandatory prerequisite for prosecution under Section 138 of the Negotiable Instruments Act, 1881. The notice must be sent to the correct address of the accused and must be proved to have been delivered or refused. In the absence of such proof, the proceedings are liable to be quashed.
Judgment Excerpts
The notice was sent by speed post but the postal acknowledgment was not produced, and the address on the notice was not the correct address of the applicants.
The mandatory requirement of service of notice was not complied with, and therefore, the criminal proceedings could not be sustained.
Procedural History
The applicants filed Criminal Application No.718 of 2016 before the Bombay High Court seeking quashing of criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881 pending before the trial court.
Acts & Sections
- Negotiable Instruments Act, 1881: 138
