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2019 Supreme(Bom) 1570
IN THE HIGH COURT OF JUDICATURE AT BOMBAY AT AURANGABAD BENCH
P.R. BORA, J.
Vardhman Steel - Appellant
Versus
Sai Engineering, Aurangabad - Respondent
Criminal Appeal No. 263 of 2019
Decided On : 03-09-2019
M.V. Ghatge, Adv., R.V. Gore, Adv.
Headnote:
Negotiable Instruments Act, 1881 - Section 138 – Employment and service – Bank - Dishonored cheque - Trial Court – Circumstances evidence - In Summary Criminal Case No.3245 of 2016, it was the case of the present appellant (hereinafter referred to as the complainant) that the respondent had purchased CRCA Steel Sheets from the appellant Firm worth Rs.1,25,052/- and towards the payment of the said amount, had issued the subject cheque. It stood dis-honoured on the ground Account Closed. It was his further contention that he then issued a statutory notice as envisaged under Section 138(b) of the N.I.Act, to the respondent and demanded the amount of the cheque from him. The notice was duly served upon the respondent, but he did not pay the amount of the said cheque within the stipulated period. In the circumstances, the complainant filed a complaint under Section 138 of the N.I.Act, against the respondent. Alongwith complaint, the complainant had filed on record the copy of the cheque issued by the respondent, cheque return memo received from the bank, the office copy of the notice and the acknowledgement receipt – Held, fact so deposed by the complainant has not been denied or disputed by the respondent. Not only that the aforesaid fact was deposed on oath by the complainant but he has also filed on record the postal slip evidencing that the notice was despatched by him by R.P.A.D. and the acknowledgment receipt demonstrating that the same was served upon the respondent. The office copy of the said notice was also placed on record by the complainant. Though, the said office copy was unsigned, since the contents of the said notice were deposed on oath by the complainant before the Trial Court, having regard to the law laid down by the Honourable Apex Court in the case of Indra Kumar Patodia and Another (supra), the Trial Court must have held the requirement under Section 138(b) of the N.I.Act, to have been complied with by the complainant - For the reasons stated above, I have no hesitation in holding that the Trial Court has grossly erred in dismissing the complaint filed by the present appellant under Section 138 of the N.I.Act, on the ground that the office copy of the statutory mandatory notice as contemplated under Section 138(b) of the N.I.Act, filed alongwith complaint was not signed either by the complainant or his Advocate. The impugned Judgment and order, therefore, cannot be sustained and deserves to be set aside. From the evidence on record, it has to be held that the notice contemplated under Section 138(b) of the N.I.Act, was duly served upon the respondent. I reiterate that the Trial Court has already held that the complainant has successfully proved the fact of issuance of cheque in his favour by the respondent towards legally enforceable debt and said stood dishonoured for the reason that the account was closed. In view of the discussion made by me, the requirement as contemplated under Section 138(b) of the N.I.Act, is also held to be complied with. It is not in dispute that the respondent has not made the payment of the subject cheque within fifteen days of receiving summons from the Court – Appeal allowed
The legal document discusses the validity of service of statutory demand notices under Section 138(b) of the Negotiable Instruments Act, 1881, and the sufficiency of evidence related to such notices in criminal proceedings for dishonor of cheques. The key points are as follows:
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The court emphasizes that the primary purpose of issuing a notice under Section 138(b) is to inform the drawer of the dishonored cheque and provide an opportunity to make payment within a specified period. The object is to facilitate the settlement of the debt or liability.
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It is clarified that the statutory requirement does not explicitly mandate that the notice must be signed by the sender or their advocate. An unsigned office copy of the notice, if duly served and corroborated by other evidence such as postal receipts and acknowledgment, can be considered sufficient to establish service and compliance with the law (!) (!) (!) .
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The law recognizes that even if the office copy of the notice is unsigned, the actual notice sent and served upon the drawer—evidenced by postal reports and acknowledgment receipts—can be deemed valid and sufficient for legal purposes (!) (!) (!) (!) .
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The court notes that the purpose of the notice is to inform the drawer about the dishonor and to enable them to make payment. If the postal authorities confirm delivery, and the recipient does not dispute receipt or content, the service is presumed valid, even if the office copy in the record is unsigned (!) (!) (!) .
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The document underscores that procedural irregularities, such as lack of signature on the record copy of the notice, do not necessarily invalidate the service if other evidence substantiates that the notice was properly issued and received. The focus remains on whether the notice was effectively communicated to the drawer (!) (!) (!) .
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The importance of the complainant's testimony regarding the issuance and service of the notice is highlighted. Consistent, unchallenged testimony, supported by postal evidence, can establish compliance with the statutory requirement, even without the signature on the office copy (!) (!) .
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Overall, the procedural object is to ensure that the drawer receives proper notice, and technical defects such as missing signatures on internal records do not automatically nullify the process if the actual service and content are proven and unchallenged (!) (!) (!) .
In conclusion, the law permits a flexible approach regarding the signature requirement on the record copy of the statutory notice, provided that there is sufficient evidence of proper issuance, service, and receipt of the notice by the drawer of the cheque.
JUDGMENT :
P.R. Bora, J.
"Whether service of statutory demand notice as contemplated under Section 138(b) of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the N.I.Act'), on the drawer of the cheque can be held invalid on the ground that the office copy of the said notice filed by the complainant alongwith the complaint under Section 138 of the N.I.Act', does not bear the signature either of the counsel, who sent the said notice or of the drawee of the cheque ?" is the question which falls for my determination in the present appeal.
2. In Summary Criminal Case No.3245 of 2016, the learned Magistrate has held the service of statutory notice contemplated under Section 138(b) of the N.I.Act, invalid on the ground that office copy of the said notice does not bear the signature either of the complainant or his Advocate and eventually only on the said ground has dismissed the said complaint filed by the present appellant.
3. In Summary Criminal Case No.3245 of 2016, it was the case of the present appellant (hereinafter referred to as the complainant) that the respondent had purchased CRCA Steel Sheets from the appellant Firm worth Rs.1,25,052/- and towards the payment of the said amount, had issued the subject cheque. It stood dis-honoured on the ground 'Account Closed'. It was his further contention that he then issued a statutory notice as envisaged under Section 138(b) of the N.I.Act, to the respondent and demanded the amount of the cheque from him. The notice was duly served upon the respondent, but he did not pay the amount of the said cheque within the stipulated period. In the circumstances, the complainant filed a complaint under Section 138 of the N.I.Act, against the respondent. Alongwith complaint, the complainant had filed on record the copy of the cheque issued by the respondent, cheque return memo received from the bank, the office copy of the notice and the acknowledgement receipt. The acknowledgement receipt was not received within the expected period. The appellant had therefore lodged a complaint in that regard, in response to which, it was informed by the postal authorities that the said notice was duly served upon the noticee i.e. respondent. The said documents were also placed on record by the appellant. The learned Magistrate, after being satisfied that all ingredients for constituting an offence under Section 138 of the N.I.Act, were prima-facie fulfilled, issued the process against the respondent.
4. In order to prove the guilt of the accused, the complainant himself deposed and also placed his reliance on the documents filed on record by him. The defence of the respondent was of total denial. The learned Magistrate framed the following Points for determination and recorded his finding as mentioned against each of the said points:
| "Sr. No. | Points for Determination | Findings |
| 1. | Whether accused had issued cheque for discharge of legally enforceable debt or liability ? | Yes. |
| 2. | Whether the cheque was presented within statutory period and it was dishonoured? | Yes. |
| 3. | Whether accused had failed to pay the cheque amount after receipt of notice ? | No. |
| 4. | Whether accused has committed an offence punishable under Section 138 of N.I.Act ? | No. |
| 5. | What order ? | ..Accused is acquitted." |
5. The learned Magistrate, thus, though recorded an affirmative finding that the accused had issued cheque in favour of the complainant towards discharge of legally enforceable debt and also held that the subject cheque was presented within the statutory period and the same stood dishonoured because the concerned account was closed by the respondent, on the point of issuance of notice, he has recorded negative finding, which has resulted in dismissal of the complaint. The learned Magistrate in paragraph No.18
