The main legal point established in the judgment is the presumption of service of notice and the establishment of liability under section 138 and 139 of the Negotiable Instruments Act in cases of dishonoured cheques.

JUDGMENT - R.M.S. KHANDEPARKAR, J.:---Heard learned Advocates for the parties.

2. Rule. Rule made returnable forthwith by consent.

3. The petitioner challenges the judgment and order of conviction and sentence passed by the Chief Judicial Magistrate, at Latur in S.T.C.C. No. 6935 of 1993 on 19th July, 1996 and confirmed by the Sessions Judge, Latur on 18th January, 2000 in Criminal Appeal No. 36 of 1996. The petitioner has been convicted of the offence punishable under section 138 of the Negotiable Instruments Act and sentenced to pay a fine of Rs. 28,000/- and in default, to undergo S.I. for two months.

4. The facts in brief, relevant for the decision are that the respondent No. 1 filed complaint in the Court of C.J.M., Latur on 27-12-1993 complaining that the petitioner, on the day of Gudi Padwa of 1993, had borrowed a sum of Rs. 14,000/- with assurance to return the same in June, 1993 and accordingly, had issued two cheques, one dated 21-6-1993 for Rs. 5,000/- and another dated 15-7-1993 for Rs. 9,000/- in favour of the respondent-complainant but, on submission of the said cheques for encashment, they were dishonoured on 4-11-1993 and, therefore, the respondent-complainant issued demand notice dated 23-11-1993 by registered post to the petitioner. The postman visited the house of the petitioner at Waghala on 26, 27 and 28th November, 1993 but the petitioner was found absent at her residence. On 1st December, 1993 when the postman visited the house of the petitioner, she refused to accept the notice and, therefore, it was returned unserved as "refused" by the petitioner. It was further stated by the complainant that the petitioner having failed to repay the amount within the stipulated period in spite of notice of demand in that regard, the respondent was compelled to file the said complaint under section 138 of Negotiable Instruments Act. On service of summons in the said case, the petitioner appeared before the Magistrate and contested the claim of the respondent contending that there was no existing liability in favour of the respondent and, therefore, no offence was committed by the petitioner for dishonour of the said cheques and that, no notice as required under the law was served upon the petitioner prior to the institution of the complaint. The respondent examined himself whereas the petitioner examined two defence witnesses, one being the Bank Manager and another a relative of the petitioner. The trial Court, after hearing the parties and on analysis of the evidence on record, held that there was proper service of the notice of demand pursuant to dishonour of the cheques and prior to the institution of the complaint and that the petitioner has not rebutted the presumption arising under section 139 of the said Act and, therefore, the petitioner's liability in relation to the said cheques was fully established and, therefore, the petitioner was convicted for the offence punishable under section 138 of the said Act. Appeal preferred against the same by the petitioner did not yield any fruitful result for the petitioner. Hence, the present petition.

5. The challenge to the conviction of the petitioner under section 138 of the said Act is three fold. Firstly, that there was no service of demand notice upon the petitioner prior to institution of the complaint and, therefore, the entire proceedings are bad in law; Secondly, that even if it is presumed that the respondent has established that notice has been served upon the petitioner, it is not established that the notice so served was a notice of demand in relation to the cheques which were dishonoured in the case in hand; and thirdly, that the respondent has failed to establish the subsisting liability of the petitioner in favour of the respondent-complainant on the day the cheques were stated to have been dishonoured.

6. Placing reliance upon the decision of the Apex Court in the matter of (Sridhar M.A. v. Metalloy N. Steel Corporation)1, reported in 2000(5) Bom.C.R. 320, an

Click Here to Read the rest of this document