2017 (1) TMI 1219 - HC - Indian Laws

Maintainability of the complaint case for if no legal notice was served on the petitioner as required under Section 138 of the NI Act - Held that - There is no challenge to the finding of the learned Metropolitan Magistrate that the address C-16, Amushi Industrial Area, Nandur Gant, Lucknow, UP was a non-existent address. This was upheld by the revisional Court vide the impugned order dated 12th October, 2010. As per the complaint legal notice as required under Section 138 of the NI Act was issued to the petitioner at the address C-16, Amushi Industrial Area, Nandur Gant, Lucknow, UP. According to the complaint notice through UPC was duly served i.e. deemed to be served and registered AD was not received, hence it was deemed service. However, there can be no deemed service on a non-existent address. Thus, there is merit in the contention of learned counsel for the petitioner and since no notice of legal demand was served on the petitioner/ accused complaint case is quashed

Summary

Issues:
1. Legal notice served at a non-existent address.
2. Failure to comply with essential ingredients of Section 138 of the Negotiable Instruments Act.
3. Quashing of the complaint and related proceedings.

Issue 1: Legal notice served at a non-existent address:
The respondent filed a complaint under Section 138 of the Negotiable Instruments Act against the petitioner, alleging non-payment towards a chit fund group. The petitioner claimed that no legal notice was served on him as it was sent to a fictitious address. The process server confirmed the non-existence of the address, leading to the issuance of fresh summons. The petitioner argued that someone impersonated as an accused during a court appearance. Despite discrepancies in addresses and summons, non-bailable warrants were issued against the petitioner. The Additional Sessions Judge set aside the warrants but maintained the summoning order, emphasizing the need for the accused to appear in court. The petitioner contended that the complaint was not maintainable due to the incorrect legal notice address.

Issue 2: Failure to comply with essential ingredients of Section 138 of the Negotiable Instruments Act:
The petitioner challenged the summoning order and non-bailable warrants, seeking quashing of the proceedings. The court noted discrepancies in addresses and the lack of evidence of legal notice service. The court observed that the address used for the legal notice was non-existent, which invalidated the service. The court highlighted the essential ingredients of Section 138 NI Act, emphasizing the requirement for a valid legal notice. Since the legal demand notice was not served on the petitioner, the court quashed the complaint, citing non-compliance with Section 138 NI Act.

Issue 3: Quashing of the complaint and related proceedings:
The court stayed proceedings pending a hearing and later restored a dismissed petition due to non-prosecution. Despite repeated adjournments, the respondent failed to appear in court, leading to the summoning of Trial Court Records. However, the records were found to have been weeded out, prompting further investigation. The court received a report indicating the responsible individuals' demise, preventing action against them. The court proceeded to hear the case based on available records. Ultimately, the court quashed the complaint due to the non-existent legal notice address, rendering the proceedings unnecessary.

This detailed analysis of the judgment highlights the issues surrounding the legal notice, compliance with Section 138 of the NI Act, and the final decision to quash the complaint and related proceedings.