2022 (7) TMI 514 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - non-service of statutory notice of demand - address on which the respondent has dispatched the said notice is incorrect to the knowledge of the respondent - HELD THAT - The respondent/complainant had mentioned wrong address of the petitioner/accused both in the statutory notice of demand as well as in the complaint because Priyag Apartment Vasundra Enclave-96 is located in Delhi not in Jammu. Thus it can safely be stated that statutory notice of demand was sent by the respondent/complainant to the petitioner/accused on an address which was not correct. Whether a notice of demand sent on wrong address of the drawer of a cheque would amount to giving of notice to him as contemplated in clause (b) of proviso to Section 138 of the NIA Act? - HELD THAT - In the instant case the trial court record clearly shows that the address of the petitioner/accused is not correctly mentioned either in the complaint or in the notice of demand. It is for this reason that the respondent/complainant was directed by the trial Magistrate to furnish fresh particulars of the petitioner/accused. The address of the petitioner is shown as Vasundra Enclave Jammu which is patently incorrect. The second address of the petitioner shown in the notice of demand and the complaint as Anand Prabat New Delhi is incomplete inasmuch as it lacks necessary details that would enable a postman to locate the addresses. Once the material on record clearly suggests that the statutory notice of demand was sent by the respondent/complainant on a wrong address the presumption of receipt of notice by the petitioner/accused does not arise - Thus the pre-condition of filing a complaint under Section 138 of the NI Act of sending a statutory notice has not been satisfied in the present case. Therefore no cause of action arose in favour of the respondent/complainant to file the subject complaint. He therefore could not have instituted the complaint nor the trial court could have taken cognizance of the offence and issued process against the petitioner. Thus it is clear that the material on record does not disclose commission of offence under Section 138 of the NI Act against the petitioner/accused as such the impugned complaint and the proceedings emanating therefrom deserve to be quashed - petition allowed.

Summary

Issues:
Challenge to complaint under Section 138 of Negotiable Instruments Act and order of taking cognizance based on incorrect address in statutory notice of demand.

Analysis:
The petitioner challenged a complaint filed against him for an offence under Section 138 of the Negotiable Instruments Act, along with the order of taking cognizance issued by the trial Magistrate. The respondent alleged that the petitioner issued a cheque that bounced due to insufficient funds, despite receiving a legal notice of demand. The petitioner contended that the notice was sent to the wrong address, as he is a resident of Delhi, not Jammu. The trial court record confirmed the incorrect address on the notice of demand and the complaint, leading to the inability to serve the petitioner. The legal dispute centered on whether sending a notice to the wrong address fulfills the requirement of notice under Section 138 of the Act.

Legal Position:
The proviso to Section 138 of the Negotiable Instruments Act outlines three conditions for dishonour of a cheque to constitute an offence, including the requirement of a notice of demand to the drawer within a specified period. The Supreme Court's judgments in various cases emphasize the importance of sending the notice to the correct address of the drawer for it to be considered as received. Failure to fulfill this condition may prevent the cause of action for filing a complaint under Section 138 of the Act.

Court's Decision:
After analyzing the legal position and the facts of the case, the Court concluded that the notice of demand sent to the wrong address did not satisfy the pre-condition for filing a complaint under Section 138 of the Act. As a result, no cause of action existed for the respondent to file the complaint, and the trial court should not have taken cognizance of the offence. Consequently, the Court allowed the petition, quashed the complaint, and directed a copy of the order to be sent to the trial court for information.