V. BHASKARA RAO, J.

( 1 ) THIS is an appeal against acquittal filed by the complainant in CC No. 100 of 1997 on the file of XVI Metropolitan Magistrate, Hyderabad, dated 23-3-1998. The parties will be referred to as complainant and accused.

( 2 ) THE complainant is a dealer in steel scrap for re-rolling, melting and M. S. Flats, angles, TOR Steel etc. He supplied the iron and steel items of various specifications as required by the accused and raised various bills. The accused paid a sum of Rs. 12,94,000. 00 as part-payment, the last payment of Rs. 3 lakhs being on 14-12-1996. The accused was due to the complainant a sum of Rs. 3,5i,875. 25 ps. as on 15-12-1996. He issued a cheque bearing No. 646517, dated 1-1-1997 for the said amount drawn on State Bank of Hyderabad, Kavadiguda Branch, Secunderabad. When it was presented in the bank it was returned dishonoured with an endorsement "insufficient funds". It was brought to the notice of the accused and at his request, the complainant represented the cheque once again in his bank on 3-1-1997, but it was returned once again with the same endorsement on 7-1-1997. Thereupon the complainant got a legal notice issued on 17-1-1997 which was returned unserved on 17-2-1997 with an endorsement "addressee out of station-door locked for 7 days". According to the complainant the notice is deemed to have been duly served on the accused. Thus, he has failed to make payment inspite of demand made by the complainant and thereupon he has committed an offence under Section 138 of Negotiable Instruments Act.

( 3 ) THE learned Magistrate recorded the sworn statement of the complainant and took cognizance of the case under Section 138 of Negotiable Instruments Act and issued process to the accused. He entered appearance and received copies of the complaint and documents. When he was examined under Section 251 Cr. PC, he denied the complaint allegations and pleaded not guilty. Thereupon the complainant examined himself as PW1 and another witness as PW2. Exs. P1 to P26 have been marked for the complainant. The accused got Exs. D1 to D4 marked. The learned Magistrate scrutinized the above oral and documentary evidence and considered the contentions of both sides. On behalf of the accused it was firstly contended that the cheque was issued by the firm, but the firm is not arraigned as an accused and secondly that no notice is received by him.

( 4 ) THE learned Magistrate held on first objection that it is not necessary to arraign the firm. However, he upheld the second objection and held that the accused is not guilty and acquitted him. Hence the appeal by the complainant.

( 5 ) SRI M. Ramachandra Reddy, learned Counsel for the appellant contended that the complainant has complied with the requirement of issuing notice and that the finding of the learned Magistrate in that regard is erroneous. According to him the accused had knowledge of the bouncing of cheque and it was at his request that the complainant represented the cheque and thereafter it was bounced once again. He asserted that the registered notice which was returned by postal authorities that the addressee was absent is deemed service. He relied on the judgments in K Satyanarayana v, A. P, Travel and Tourism Dev. Corporation Ltd. , Secunderabad and another, 1997 (1) ALD (Crl.) 706 (AP); M. Ramachandra Reddy v. G. Ram Reddy, 1997 (2) ALD (Crl.) 189 (AP) = 1997 (2) ALT (Crl.) 347 (AP); M/s. Modem and Co. v. Wazir Jaivir Chand, AIR 1989 SC 630; G. S. Srikanth, M. D. , TRandm. Products v. Sri Lakshmi Financiers, 1998 (2) ALD (Crl.) 378 (AP); and Attabira Regulated Market Committee v. Ganesh Rice Mills, (1996) 9 SCC 471. Thus, he sought for allowing the appeal and to set aside the judgment under appeal and to remand the case for fresh disposal.

( 6 ) SRI Ashok Kumar, learned Counsel for the accused while supporting the judgment contended that prior notice is a sine qua non for a prosecution under Section 138 of Negotiable Instruments Act and in this

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