2022 (8) TMI 820 - HC - Indian Laws

Dishonor of Cheque - non-service of notice - whether without establishing service of notice upon the accused a prosecution under section 138 of the Negotiable Instruments Act, 1881 can be conducted? - HELD THAT - The offence under section 138 of the Negotiable Instruments Act, 1881 requires the complainant to establish (i) issuance of cheque in discharge of any debt or other liability, in whole or in part (ii) return of cheque unpaid either for insufficient fund or any other reason (iii) notice providing clear 15 days' time for repaying the debt amount, and (iv) proof of service of notice upon the accused. On admitted facts, there is no proof of service of notice dated 1st June 2012 upon the petitioner. Both Courts have taken note of the aforesaid circumstance that no proof as regards service of legal notice dated 1st June 2012 has been produced by the complainant - the proposition as regards giving of notice and receipt of notice is in relation to presumption of service under section 27 of the General Clauses Act, 1897 which would attract only on proof by the complainant by producing postal receipt which would clearly establish that the postal cover was correctly addressed and sufficiently stamped, and by proving the same in accordance with the rules of evidence. Admittedly, postal receipt and postal cover have not been produced by the complainant to show that the legal notice dated 1st June 2012 was sent to the petitioner. This Court finds that the essential facts to prove the offence under section 138 of the Negotiable Instruments Act, 1881 have not been established during the trial and while so conviction and sentence of the petitioner are held bad - conviction and sentence awarded to the petitioner, are set aside - the petitioner is discharged of liability of the bail bonds furnished by him pursuant to the order dated 14th June 2016 passed by this Court. Revision allowed.

Summary

Issues:
- Conviction and sentencing under section 138 of the Negotiable Instruments Act, 1881
- Proof of service of legal notice
- Interpretation of legal provisions regarding notice in criminal cases

Analysis:
1. The case involved the conviction and sentencing of the petitioner under section 138 of the Negotiable Instruments Act, 1881, based on a complaint filed by OP No. 2 for issuing a cheque that was returned unpaid due to insufficient funds. The petitioner was sentenced to six months' imprisonment and ordered to pay compensation.

2. The central issue raised by the petitioner's counsel was whether a prosecution under section 138 can proceed without establishing the service of notice upon the accused. The complainant must prove the issuance of the cheque, its return unpaid, serving a notice providing 15 days to repay, and proof of service of the notice on the accused.

3. Both trial and appellate courts noted the absence of proof of service of the legal notice dated 1st June 2012 upon the petitioner. The complainant contended that the notice was tendered as evidence, but no proof of service was produced. The learned counsel for OP No. 2 referred to a Supreme Court judgment emphasizing the importance of notice in such cases.

4. The Supreme Court's judgment highlighted the significance of giving notice and receiving it within 15 days of court summons in cases under section 138. The absence of proof of service, such as a postal receipt, raised doubts about the validity of the notice served. The failure to produce the postal receipt and cover to establish the correct address and postage further weakened the complainant's case.

5. Considering the lack of essential facts to prove the offense under section 138, the High Court held the conviction and sentence of the petitioner as invalid. The court set aside the conviction and sentence awarded in the trial and modified by the appellate court, ultimately discharging the petitioner from the liability of the bail bonds.

6. In conclusion, Criminal Revision No. 1471 of 2015 was allowed, and the order was directed to be transmitted to the concerned court through fax for necessary action. The judgment emphasized the importance of proving service of legal notices in cases under section 138 of the Negotiable Instruments Act, 1881 to ensure a fair trial and uphold legal standards.