Section 138 NI Act- Not Mentioning Date Of Service Of Demand Notice Is Not Fatal To Case: Allahabad High Court

The Allahabad High Court has held that a complaint for dishonour of cheque under Section 138 of the Negotiable Instruments Act, 1881, cannot be dismissed merely because it does not mention the date on which the demand notice was served upon the alleged defaulter/ drawer.

“The complaint cannot be thrown at the threshold even if it does not make a specific averment with regard to service of notice on the drawer on a given date. The complaint, however, must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the cheque,” a Single Bench of Justice Vivek Varma ruled.

While holding thus, it relied on the Supreme Court’s verdict in CC Alavi Haji v. Palapetty Muhammed & Anr. where it was held that held that absence of averments in the complaint about service of notice upon the accused is the matter of evidence.

“When the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with…It is then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the 5 address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect,” the Top Court had held.

Similarly, in Subodh S. Salaskar v. Jayprakash M. Shah & Anr., it was held that any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected.

“A person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice,” the Top Court had said.
In this backdrop, the Single Bench of the High Court has held that at the stage of summoning, the Magistrate has only to see whether a prima facie case is made out or not.

“The factum of disputed service of notice requires adjudication on the basis of evidence and the same can only be done and appreciated by the trial court and not by this Court under the jurisdiction conferred by Section 482 Cr.P.C.”
The Bench also ruled that the judgement of the High Court in the case of Alijan v. State of UP & Anr. cited by the applicant, seeking quashing of criminal proceedings under Section 138 pending in the Court of the Additional Chief Judicial Magistrate, is not good law in view of the above stated judgements of the Supreme Court.

The Applicant had argued that since the date of service of notice dated 19.09.2012 has not been mentioned, from which date the cause of action arose to the complainant to file the present complaint against the applicant cannot be determined.
Even otherwise, it was stated that the complaint on the basis of the second notice dated 02.11.2012 was also not legally maintainable, under the provisions of the Act.

Rejecting this contention, the Single Bench ruled that the cause of action to file the complaint in question arose under clause (c) of the proviso to Section 138 of the Act from sending of the first notice dated 19.09.2012 and not from the notice dated 02.11.2012, as the second notice dated 02.11.2012 is only a reminder notice to the drawer of the cheque and as such, it cannot be construed as an admission of non-service of first notice by the complainant.

“Second notice has no relevance at all, the second notice would be construed as a reminder of respondent’s obligation to discharge his liability,” it observed [N. Parameswaran Unni v. G. Kannan & Anr.].

Case Title:  Anil Kumar Goel v. State of UP & Anr.