2019 (7) TMI 48 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - case of petitioner is that the statutory notice under Section 138 of the Negotiable Instruments Act was neither addressed to the correct address nor served to the petitioner - existence of statutory presumption - HELD THAT - Perusal of the record clearly shows that the complainant even in the complaint had stated that the statutory notice was not delivered and had accordingly annexed with the complaint the returned envelope containing the statutory notice - Legal presumption of service of notice can only arise in case the notice is correctly addressed. If the notice is incorrectly addressed no legal presumption can arise. In the present case, the complainant had annexed the letterhead of the petitioner containing the address mentioned in the statutory notice but specifically mentioning there in the correspondence address as that of New Friends Colony. It is not the case of the complainant that the petitioner was having an office or was ever found at Barakhamba Road, the address mentioned in the statutory notice. Section 138 of the Negotiable Instruments Act mandates the issuance of the statutory notice as a pre-condition to filing of a complaint. The cause of action to file a complaint under section 138 of the Negotiable Instruments Act arises only on issuance and service of statutory notice and failure of the accused to comply with the statutory notice. In the absence of service of statutory notice the cause of action would not accrue. Service of statutory notice would also include legal presumption of service if circumstances so warrant - in the present case there was admittedly no service of statutory notice and the presumption of service of the statutory notice also does not arise in the facts of the present case as the notice was not correctly addressed. Since the pre-condition of filing a complaint under section 138 of the Negotiable Instruments Act of sending a statutory notice has not been satisfied in the present case, no cause of action arose in favour of the complainant to file the subject complaint. Since no cause of action arose, the petitioner could not have instituted the complaint nor could the trial court as well as the appellate court by the impugned order have convicted the petitioner. Petition allowed - decided in favor of petitioner.

Summary

Issues Involved:
Impugning conviction and sentence under Section 138 of the Negotiable Instruments Act based on incorrect address in statutory notice.

Analysis:

Issue 1: Incorrect Address in Statutory Notice
The petitioner contested the judgment convicting them under Section 138 of the Negotiable Instruments Act, arguing that the statutory notice was not correctly addressed or served. The notice was sent to an address where the petitioner was not present, leading to the returned envelope being marked as "Left." The complainant failed to establish the petitioner's presence at the mentioned address, a multi-storeyed complex with various occupants. The petitioner was served at a different address, indicating a discrepancy in the notice's delivery.

Issue 2: Legal Presumption of Service
The courts erroneously presumed service of the notice based on the ancestral connection of the petitioner to the address mentioned in the notice. However, the appellate court misinterpreted the facts, assuming the petitioner's occasional presence at the address without concrete evidence. The absence of an office or regular visits by the petitioner to the mentioned address contradicted the presumption of service. The complainant's knowledge of the correct correspondence address, not included in the notice, further weakened the presumption of service.

Issue 3: Cause of Action and Compliance
Section 138 of the Negotiable Instruments Act necessitates the service of a statutory notice as a pre-condition for filing a complaint. The absence of proper notice delivery negates the accrual of a cause of action. Both trial and appellate courts erred in convicting the petitioner without establishing the service of the statutory notice. The complainant's failure to adhere to the correct address in the notice invalidated the legal basis for the complaint and subsequent conviction.

Conclusion:
The High Court quashed the impugned judgment on conviction and sentence, dismissing the appeal and allowing the petitioner's plea. The complaint under Section 138 of the Negotiable Instruments Act was deemed unsustainable due to the lack of proper notice service, leading to the dismissal of the complaint. The court emphasized the importance of correctly addressing statutory notices to establish a valid cause of action in such cases.