IMPORTANT POINT
In a complaint for offence under Section 138 of Negotiable Instruments Act When cheque was drawn by partnership firm and notice was given to the firm, no notice is required to individual partners of the firm.

S.N. Kapoor J. - This petition is directed against an order dated 17-1-1997 summoning the petitioner-firm and its two partners for offence under Section 138 read with Section 141 of Negotiable Instruments Act (hereinafter called the Act).

2. The contention of the petitioners herein is that there was no service of notice under Section 138 of the Act on the petitioners-Jain Associates, Shri Prahlad Rat Jain and Shri Deepak Kumar Jain. The notice which purports to have been sent under registered envelope returned without any postal remark from Postal Authorities. The petitioners rely on L. Mani v. Kandan Finance1.

3. On the other hand contention of the learned Counsel for the complainant/respondent is that in addition to the registered envelope the notice was also sent under UPC and postal receipt of the notice was already thereon the record. Accordingly, the presumption is that the notice sent under UPC and the registered letter was served on the petitioners. They cleverly avoided the service of notice sent under registered post and the petitioners had knowledge of notice sent under UPC.

4. Having heard both the parties and after going through the record it appears that two points are required to be considered; (1) whether notice was to be sent to the partnership-firm as well as the partners thereof under Section 138 in case a cheque issued on behalf of the partnership is dishonoured, and (ii) if the notice is not required to be served on individual partners whether the notice sent at the address of the partnership firm under UPC is sufficient to proceed with the matter for the purpose of summoning the petitioners.

5. Before further proceedings let us see what the complainant claims insofar as the service of the notice is concerned. The complainant discloses in paras 7, 8 and 9 as under:

(1) This notice was sent both under Registered AD cover and under certificate of posting.

(2) The notice which was sent under registered cover was received back in the office of the Counsel without any postal remarks. The other which was sent under certificate of posting is not received back.

(3) Subsequently, enquiries were conducted at BJ 70, West Shalimar Bagh, Delhi and the complainant came to know that the building, a double storey, is known as "Jain Niwas" and the Accused No.2 is residing there. He also has a telephone No. 7120133.

(4) Thus the return of the notice sent under registered cover is deliberate and intentional. The accused deliberately evaded receipt of the registered notice. This amounts to his knowledge that such a notice was sent by the complainant and deliberate refusal of the same. That would clearly amount to constructive service of notice. The very purpose of the Act cannot be thwarted by simply refusing the notice.

6. There is no dispute in-between the parties that on 28-1-1994 cheque No. 56124 was issued on behalf of the petitioner No.1 and it was signed by Mr. Prahlad Rat Jain, authorised signatory of the partnership-firm. The same was dishonoured on 31-1-1994 with an endorsement indicating that the payment was stopped by the drawer. The complainant served the notice as mentioned above. When the payment was not received, the complaint was filed and the learned Metropolitan Magistrate on 22-3-1999 passed the impugned order summoning the accused rejecting the contention of the learned Counsel for the petitioners.

7. In this case, there is no dispute that petitioner No.1 is a partnership-firm as such a Company within the meaning of Clause (a) of Explanation to Section 141 of the Act and petitioner Nos. 1 and 2 being the partners are directors within Clause (b) of Explanation to Section 141 of the Act.

8. Section 138 of the Act refers to dishonour of cheque either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that Bank.

9. The Supreme Court in M/s. Electroni