IMPORTANT POINT
Demand notice returned with postal endorsement "not found for 7 days" is not a case of constructive notice & due to non service of notice in terms of Section 138(b) & (c) of Negotiable Instruments Act, an offence under that Section is not constituted.

B.S. Raikote, J. - This appeal is preferred against the Judgment and order of acquittal recorded by the I Addl. Metropolitan Sessions Judge. Hyderabad dated 30-11- 1994 in Crl. Appeal No. 52/94. By this order the learned Sessions Judge reversed the Judgment and order of conviction recorded by the XVII Metropolitan Magistrate. Hyderabad by his judgment and order dated 21-1-1994 in C.C. No. 24/1991. The learned Counsel for the appellant/complainant contended that the impugned Judgment and order of the appellate Court is illegal and without jurisdiction and it is contrary to law and the facts of the case. On the other hand learned Counsel for the respondent supported the impugned Judgment and order.

2. In order to appreciate the rival contentions it is necessary to note a few facts of the case. The sole respondent accused issued a cheque dated 8-91990 for an amount of Rs. 50.000/- in favour of the complainant towards the purchase of the iron scrap from the complainant. The said cheque was presented on 10-9-1990 but it was returned with endorsement of the bank on the same date as "note arranged for" which is marked as Ex. P. 2. The said cheque was again represented on 8-10-1990 but it was again returned on the same date with endorsement of the bank "effects not cleared. Please present again" which is marked as Ex. P. 3. Thereafter the complainant gave a notice dated 11-10-1990 vide Ex. P-4 to the respondent by Regd. post. But the said Regd. post was returned. The postman noted on the envelope that the party continuously absent for seven days and returned the cover, which is marked as Ex. P-5. Thereafter the complainant waited for 15 days up to 7-11-1990. But the respondent did not make the payment of the amount under cheque. After one month thereafter, i.e. on 4-12-1990, the complainant filed the case before the Court. The complainant examined himself as P.W. 1. His son was also examined as P.W. 2 P.W. 3 is the Branch Manager of the State Bank of Hyderabad, malakpet Branch. On the basis of the entire appreciation of the evidence on record, the trial Court convicted the accused for an offence punishable u/s 138 of the Negotiable Instruments Act and accordingly convicted him to undergo rigorous imprisonment for a period of six months and to pay a fine of Rs. 1,0001-, in default of payment of fine to undergo simple imprisonment for a period of two months. Being aggrieved by the said Judgment and order: the accused preferred an appeal before the I Addl. Metropolitan Sessions Judge, Hyderabad, who by his impugned order acquitted the accused of the offences. It is in these circumstances the complainant has come up in appeal, as I have already stated above.

3. The learned Counsel for the appellant contended that the appellate Court was in error in acquitting the accused solely on the ground that there was no sufficient notice to the accused in terms of Sec. 138 Clauses b & c of the Negotiable Instruments Act. He further submitted that so far as the complainant is concerned he has issued a notice as per Section l38 (b) and in case the notice is returned un served the said notice shall the taken as sufficient notice for the purpose of Clause (b) and within 15 days thereafter the accused shall make payment and in case of non- payment, the offence is automatically constituted u/s. 138 of the Negotiable Instruments Act. In support of his contention he relied upon the Judgment of the High Court of Madras in the case of Prasanna v. Vijayalakshmi1. On the basis of his Judgment he submitted that such notice returned with a postal endorsement as "Not found" shall be taken as a constructive notice, to the accused. On the other hand Counsel appearing for the respondent contended that in the instant case no notice is served under Clause (b) of Sec. 138 of the Act and as such no offence would be constituted under that clause. Therefore, payment of the amount within 15 days as contemplated under Sec. 138-C would not arise. In support of his argum