Monday, 18 July 2016

Whether accused in cheque dishonour case is to be acquitted if there was no proper service of demand notice to him ?

Section 138 of the N.I. Act has been analysed by the Apex
Court   in  Kusum   Ingots   &   Alloys   Ltd.   Vs.   Pennar   Peterson
Securities   Ltd.   (2000)   2   SCC   745,   and   it   is   held   that   the
following ingredients are required to be satisfied for making out a
case under Section 138 of the N.I. Act, which read thus :­
“(i) a person must have drawn a cheque on an account
maintained by him in a bank for payment of a certain
amount of money to another person from out of that
account for the discharge of any debt or other liability;
(ii)  that cheque has been presented to the bank within a
period of six months from the date on which it is drawn
or within the period of its validity, whichever is earlier;
(iii)  the cheque is returned by the bank unpaid, either
because the amount of money standing to the credit of the
account is insufficient to honour the cheque or that it
exceeds   the   amount   arranged   to   be   paid   from   that
account by an agreement made with the bank;
(iv)  the payee or the holder in due course of the cheque
makes a demand for the payment of the said amount of
money by giving a notice in writing, to the drawer of the

cheque, within 15 days of the receipt of information by
him from the bank regarding the return of the cheque as
unpaid;
(v)  the drawer of such cheque fails to make payment of
the said amount of money to the payee or the holder in
due course of the cheque within 15 days of the receipt of
the said notice.”
7. The offence under Section 138 of the Ni.I. Act would be
completed   only   when   all   the   above   components   are   satisfied.
Issuance of notice, in writing, to the drawer of the cheque is one
of the essential components of Section 138 of the N.I. Act.   As it
has been held by the Apex Court in Central Bank of India & Anr.
Vs. Saxons Farms and Ors. 1999(8) SCC 221, the object of the
notice is to give a chance to the drawer of the cheque to rectify his
omission and also to protect honest drawer.  Service of notice of
demand in clause (b) of the proviso to Section 138 is a condition
precedence for filing a complaint under Section 138 of the N.I.
Act.
8. Reverting to the fact of the present case, the appellant –
complainant   had   deposed   that     he   had   given   a   notice   dated

13.05.1994 to the respondent no.1 herein through his advocate.
He had produced the copy of the notice at Exh.49.   PW­1 had
stated that the said notice was received by one Asmita Amrutrao
Kadam on 23rd May, 1994 and that he could identify her signature.
He has deposed that the accused was residing in the house of
Amrutrao Kadam, the father of Asmita.  He had, therefore, issued
the notice on the said address.   The appellant – PW­1 complainant
had further stated that earlier he used to send letters on the said
address.   
9. It is pertinent to note that the copy of the notice at Exh.49,
states the address of the respondent no.1 as Nipaniwada, Nipani,
Tal. Chikodi, Dist. Belgaum. PW­1 complainant had admitted in his
cross­examination   that   the   respondent   no.1   accused   was   a
permanent resident of Nipani.   He has also admitted that in the
Regular Civil Suit No.594 of 1993, he had given the address of the
accused as a resident of Nipani.    He had further admitted that he
had   filed   the   affidavit   in   the   said   civil   suit   wherein   he   had

solemnly   affirmed   that   the   respondent   no.1   was   a   permanent
resident of Nipani.   He has stated that he has no documents to
show that the respondent no.1 accused was a resident of Pune.   
10. There is no evidence on record to prove that the accused
was at any time residing at Pune. On the contrary, evidence of the
appellant – complainant clearly reveals that the respondent no.1
accused is a permanent resident of Nipani, despite which he had
sent the notice under Section 138 of the N.I. Act at the address of
one Amrutrao Kadam, at Pune.   It is also pertinent to ntoe that
the appellant – complainant has stated that the said notice was
received by one Asmita.     He has, however not established the
relationship between the said Asmita and the respondent no.1
accused.   Under the circumstances, the learned Magistrate was
perfectly   justified   in   holding   that   the   complainant   has   not
complied with the mandatory requirement of issuance of notice.
The view taken by the learned Magistrate is a possible view and
the same does not warrant any interference.    
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 561 OF 1999 

Vilasrao Shripatrao Patil  v/s.  Pratapsingh Ranojirao Desai 

       CORAM: SMT. ANUJA PRABHUDESSAI, J.
        DATED: 28th AUGUST, 2015.
Citation:2016 ALLMR(CRI)2430


1. Heard learned Counsel for the appellant, Mr. Ramugade,
learned APP for the respondent State.
2. This   appeal   is   directed   against   the   judgment   dated   and
order   dated   14.06.1999   in   Criminal   Case   No.13317   of   1994

whereby the learned Judicial Magistrate, First Class, Kolhapur has
acquitted the respondent­accused for offence under Section 138 of
the Negotiable Instrument Act.
3. With the assistance of learned Counsel for the applicant as
well as learned APP, I have gone through the evidence on record.   
4. The appellant herein was a complainant in Criminal Case
No.13317   of   1992   filed     against   the   respondent     no.1   under
Section 138 of the Negotiable Instrument Act.   By the impugned
judgment dated 14.06.1999,  the learned Magistrate acquitted the
accused for the offence punishable under Section 138 of the N.I.
Act mainly on the ground that the appellant – complainant had
not issued statutory notice as required under Section 138 of the
N.I. Act.  
5. Learned Counsel submits that Notice dated 13.05.1994 as
envisaged under Section 138 of the N.I. Act was issued to the
respondent no.1 ­ accused  and the same was duly received by one

Amrutrao.  He has further sated that during the said period, the
respondent no.1 was residing in the house of Amrutrao at Pune.
He,   therefore,   contends   that   there   was   valid   service   of   the
statutory   notice   and   on   this   count   alone,   the   findings   of   the
learned trial Court are not sustainable.  
6. Section 138 of the N.I. Act has been analysed by the Apex
Court   in  Kusum   Ingots   &   Alloys   Ltd.   Vs.   Pennar   Peterson
Securities   Ltd.   (2000)   2   SCC   745,   and   it   is   held   that   the
following ingredients are required to be satisfied for making out a
case under Section 138 of the N.I. Act, which read thus :­
“(i) a person must have drawn a cheque on an account
maintained by him in a bank for payment of a certain
amount of money to another person from out of that
account for the discharge of any debt or other liability;
(ii)  that cheque has been presented to the bank within a
period of six months from the date on which it is drawn
or within the period of its validity, whichever is earlier;
(iii)  the cheque is returned by the bank unpaid, either
because the amount of money standing to the credit of the
account is insufficient to honour the cheque or that it
exceeds   the   amount   arranged   to   be   paid   from   that
account by an agreement made with the bank;
(iv)  the payee or the holder in due course of the cheque
makes a demand for the payment of the said amount of
money by giving a notice in writing, to the drawer of the

cheque, within 15 days of the receipt of information by
him from the bank regarding the return of the cheque as
unpaid;
(v)  the drawer of such cheque fails to make payment of
the said amount of money to the payee or the holder in
due course of the cheque within 15 days of the receipt of
the said notice.”
7. The offence under Section 138 of the Ni.I. Act would be
completed   only   when   all   the   above   components   are   satisfied.
Issuance of notice, in writing, to the drawer of the cheque is one
of the essential components of Section 138 of the N.I. Act.   As it
has been held by the Apex Court in Central Bank of India & Anr.
Vs. Saxons Farms and Ors. 1999(8) SCC 221, the object of the
notice is to give a chance to the drawer of the cheque to rectify his
omission and also to protect honest drawer.  Service of notice of
demand in clause (b) of the proviso to Section 138 is a condition
precedence for filing a complaint under Section 138 of the N.I.
Act.
8. Reverting to the fact of the present case, the appellant –
complainant   had   deposed   that     he   had   given   a   notice   dated

13.05.1994 to the respondent no.1 herein through his advocate.
He had produced the copy of the notice at Exh.49.   PW­1 had
stated that the said notice was received by one Asmita Amrutrao
Kadam on 23rd May, 1994 and that he could identify her signature.
He has deposed that the accused was residing in the house of
Amrutrao Kadam, the father of Asmita.  He had, therefore, issued
the notice on the said address.   The appellant – PW­1 complainant
had further stated that earlier he used to send letters on the said
address.   
9. It is pertinent to note that the copy of the notice at Exh.49,
states the address of the respondent no.1 as Nipaniwada, Nipani,
Tal. Chikodi, Dist. Belgaum. PW­1 complainant had admitted in his
cross­examination   that   the   respondent   no.1   accused   was   a
permanent resident of Nipani.   He has also admitted that in the
Regular Civil Suit No.594 of 1993, he had given the address of the
accused as a resident of Nipani.    He had further admitted that he
had   filed   the   affidavit   in   the   said   civil   suit   wherein   he   had

solemnly   affirmed   that   the   respondent   no.1   was   a   permanent
resident of Nipani.   He has stated that he has no documents to
show that the respondent no.1 accused was a resident of Pune.   
10. There is no evidence on record to prove that the accused
was at any time residing at Pune. On the contrary, evidence of the
appellant – complainant clearly reveals that the respondent no.1
accused is a permanent resident of Nipani, despite which he had
sent the notice under Section 138 of the N.I. Act at the address of
one Amrutrao Kadam, at Pune.   It is also pertinent to ntoe that
the appellant – complainant has stated that the said notice was
received by one Asmita.     He has, however not established the
relationship between the said Asmita and the respondent no.1
accused.   Under the circumstances, the learned Magistrate was
perfectly   justified   in   holding   that   the   complainant   has   not
complied with the mandatory requirement of issuance of notice.
The view taken by the learned Magistrate is a possible view and
the same does not warrant any interference.    

11. Under   the   circumstances,   and   in   view   of   the   discussion
supra, in my considered view, no interference is required in the
impugned judgment.  The appeal is, therefore,  dismissed
        (ANUJA PRABHUDESSAI, J.)

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