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2004 Supreme(AP) 442
2004 (4) Crimes 69
Bombay High Court
D.G. Deshpande, J.
D.C.W. Home Products Ltd.—Petitioners
versus
State of Maharashtra & Others — Respondents
Criminal Application No. 5169 of 2003
Decided on 8-4-2004
Counsel for the parties:
For the Petitioners : Mr. P.D. Desai, Advocate.
For the Respondent No. 1 : Mr. B.H. Mehta, A.P.P.
For the Respondent Nos. 2 and 3 : Mr. O.A. Siddiqui with Mr. J.R. Khan, Advocate.
Important Point
Demand notice in terms of Section 138(b) of Negotiable Instruments Act served upon sister concern of accused company in absence of evidence to prove that such concern or person was authorised to receive notice on behalf of accused company would not constitute proper service.
Headnote:Negotiable Instruments Act, 1881 — Section 138 — Prosecution for dishonour of cheque for Rs. 50 lacs — Acquittal of accused by Magistrate on ground that complainant failed to proved demand notice served upon accused company — Appeal — Demand notice was given by hand — Admittedly demand notice was not given to accused company on its registered office address but rather was addressed to sister concern of accused company — It was for complainant to prove by cogent reliable evidence that acknowledgement issued on copy of demand notice was issued by some one authorised on behalf of accused company and not by any body from sister concern — PW 1 examined on behalf of complainant on point had no knowledge who had put initials and whether person putting seal on initial was authorised by accused Co. to receive notice — Notice was not addressed to any specific individual i.e. accused No. 2 & 3 but simply to Director — Order of acquittal was not liable to be interfered with. (Paras 5 to 7)
Result: Appeal dismissed.
Deshpande D.G., J.— Heard Advocate for the petitioners and Advocate for respondent Nos. 2 and 3. This Special Leave Application is filed by the complainant against the judgment of acquittal of the accused under section 138 of the Negotiable Instruments Act by the Chief Metropolitan Magistrate, 37th Court, Esplanade, Mumbai, by judgment dated 19-9-2003. It was the case of the complainant that accused issued a cheque for Rs. 50 lacs dated 13-2-1997 for discharging their liability. Accused No. 3 signed the cheque, complainant deposited the cheque in the bank of 14-2-1997 but it was returned with remarks “insufficient funds in the account”. Thereafter company gave notice dated 27-2-1997 by hand delivery. The accused did not make the payment inspite of the notice and hence complaint came to be filed under section 138 of Negotiable Instruments Act.
2. On behalf of complainant only one witness was examined S. Rajgopalan. Defence of the accused was that no notice was served upon them as required by section 138 of Negotiable Instruments Act. Counsel for the petitioners tendered a zerox copy of notice dated 27-2-1997. It is addressed to.
Director
REPL Engineering Ltd.
Shivsagar Estate
Block ‘D’,
Dr. Annie Besant Road,
Worli,
Mumbai 400018.
3. It was the defence of the accused that the Registered or Administrative Office of the accused company is situate at Fort and not at Worli and notice which the complainant gave was addressed to some Director REPL Engineering Ltd., and therefore it is not compliance to section 138 of the Negotiable Instruments Act and since there is no compliance to this basic requirement they were required to be acquitted and were rightly acquitted by the trial Court.
4. Advocate for the petitioners strenuously urged that what is required by section 138 is that a notice has ‘to be given and it has to be in “writing. He repeatedly urged that a notice was accepted by the accused company and there is an acknowledgement in the form of the seal of the company. This according to him constitutes service and acknowledgement of receipt of the notice and therefore if the-notice is accepted then the accused cannot be permitted to challenge or deny the receipt of the notice. I do not find any substance in the submissions. Firstly because P.W. No. 1 S. Rajgopalan who was examined by the complainant has no personal knowledge of the matter. In his cross-examination he has clearly admitted that the original complainant Arvind Dagwekar have gone to serve the notice and P.W. 1 had not personally gone there. He has admitted in his cross-examination that the registered office of the company at Saroj Building, 2nd floor, D.N. Road, Mumbai, in the end of June, 1998. He admitted that the demand notice was not given to the accused on the above said registered office.
5. Admittedly the notice is tried to be served by hand delivery. No attempt is made to serve the notice by registered post. The question is even if the notice is sent by hand delivery it is for the complainant to prove that it war, properly and duly served upon the accused: Admittedly complainant is having a transaction with the accused much
prior to the issuance of the cheque. The amount involved in the cheque is very huge about Rs. 50 lacs or so. It cannot be said that the complainant dealing with the accused for such huge amount were not knowing about the registered office of the accused company. However, instead of addressing the notice to the accused to their registered office, it is addressed to Director REPL Engineering Ltd. which admittedly is the sister concern of the accused. There was absolutely no relevancy of serving the notice on the sister concern of the accused at Worli when the complainant fully knew that the registered office of the accused company is in Fort.
6. Secondly, it was urged by Advocate for the applicant that seal of the company on the copy of the notice proves acknowledgement or receipt of not
