Proper service of statutory notice under Section 138 is essential to establish a cause of action for dishonour of cheque; mere dispatch is insufficient.

Order :

(FARJAND ALI, J.)

1. The instant appeal is directed against the judgment dated 13.02.2020 passed by the learned Trial Court, whereby the respondent, Smt. Nirmala Devi, was acquitted of the charges levelled against her. Leave was granted to the appellant to prefer an appeal. There was a delay of 228 days in filing the appeal, which was also condoned.

2. The respondent has been duly served and is represented by learned counsel, Shri R.S. Chundawat. The respondent no.1 was not present on the previous date of hearing. Furthermore, the respondent no.1 and his counsel were also absent on 17.03.2025, 16.12.2024, 06.05.2024, 08.04.2024, and 05.02.2024. In pursuance of the process issued, the respondent, who is an elderly lady, appeared in person along with her counsel.

3. Briefly stated, the facts of the case are that a criminal complaint was filed at the instance of the appellant, alleging, inter alia, that the accused-respondent had borrowed a sum of money and, in discharge of said liability, issued a cheque drawn on ICICI Bank, Bhilwara, dated 07.03.2008, amounting to Rs. 4,00,000/-. On 30.08.2008, the said cheque was returned unpaid, having been dishonoured due to insufficiency of funds in the account.

4. It is further contended that a legal notice dated 24.09.2008 was issued to the accused to apprise her of the dishonour of the cheque; however, the said notice was returned unserved with the remark of the postal authority indicating that the addressee was not found at the stated address, as she had reportedly relocated. Thereafter, a criminal complaint was instituted by the appellant, which was duly contested by the respondent. Upon hearing both sides and after extensive discussion of the factual matrix and legal propositions, the learned Trial Court acquitted the respondent of all charges. Hence, the present appeal.

5. The pivotal legal issue in this matter pertains to the proper service of the statutory notice under Section 138 of the Negotiable Instruments Act, 1881 , upon the accused to establish her awareness of the cheque's dishonour. The appellant alleged collusion between the accused and the postman; however, no cogent evidence has been led to substantiate this claim. The admission made by PW-1, the complainant, that he was aware of the accused’s residence at Village Karohi, assumes significance, particularly in light of the fact that the notice was sent to House No. 9-D-17, New Bapu Nagar, Bhilwara. The respondent's ordinary residence at Village Karohi stands duly established. There is sufficient material on record to support the conclusion that the notice was deliberately not dispatched to the correct address of the accused. Furthermore, Ex. P/5, the returned envelope, bears an endorsement indicating the non-availability of the accused at the mentioned address, thereby strengthening the defence's contention that she did not reside at the location to which the notice was sent. The record convincingly reflects that no earnest effort was made by the complainant to serve the respondent with the requisite information regarding the dishonour of the cheque.

6. As per the mandate of Section 138 of the Negotiable Instruments Act, it is incumbent upon the complainant, after receiving intimation from the bank regarding the dishonour of the cheque, to duly inform the accused by way of a legal notice before instituting a criminal complaint.

7. In order to appreciate the legal framework governing the offence in question, it would be apposite to reproduce hereinbelow the relevant provision, i.e., Section 138 of the Negotiable Instruments Act, 1881 , which reads as under:

“138. Dishonour of cheque for insufficiency, etc., of funds in the account.—

Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of m