A proper demand notice under Section 138 of the Negotiable Instruments Act is essential before initiating proceedings; failure to comply invalidates the complaint.

Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Quashing of complaint - The petitioner sought to quash proceedings under Section 138, arguing that no demand notice was served and that the cheque was issued by a firm, not the petitioner - The trial court issued process without considering the statutory requirements - The court emphasized the necessity of a proper demand notice before initiating proceedings under Section 138. (Paras 1, 10, 11)

(B) Criminal Procedure Code, 1973 - Section 200 - The trial court failed to follow the mandate of Section 200 before issuing process against the petitioner - The court highlighted the importance of the magistrate's careful scrutiny of evidence before summoning an accused. (Paras 1, 9)

Facts of the case:
The petitioner challenged the issuance of process in a complaint under Section 138, claiming no notice was served and that the cheque was issued by a firm. The respondent's notice was issued by his son, not the complainant himself. (Paras 1, 6)

Findings of Court:
The court found that the respondent did not follow the statutory requirement of issuing a proper notice under Section 138 before filing the complaint, leading to the quashing of the proceedings. (Paras 10, 11)

Issues: The main issues were whether a proper demand notice was served and whether the trial court followed the procedural requirements before issuing process against the petitioner. (Paras 1, 10)

Ratio Decidendi: The court ruled that the absence of a proper demand notice under Section 138 precludes the initiation of proceedings, emphasizing the need for the trial court to apply its mind to the facts and law before summoning an accused. (Paras 9, 10)

Result: The proceedings of the complaint are quashed.

JUDGMENT :

1. The petitioner has sought quashing of the proceedings of the complaint titled ‘Mir Noor-ullah vs Parvaiz Ahmad Dar’ under section 138 of the Negotiable Instruments Act, 1881 (for short ‘the Act’) pending before the court of Chief Judicial Magistrate, Pulwama (hereinafter to be referred as ‘the Trial Court’) on the following grounds:

(i) That the learned trial court has not followed the mandate of section 200 Code of Criminal Procedure before issuing the process against the petitioner.

(ii) That no demand notice was served upon the petitioner by the respondent in terms of section 138 of the Act.

(iii) That the cheque has been issued by the firm and not by the petitioner and it was incumbent on the part of the respondent to array the firm ‘M/s Marazia Agro Chemicals’ as accused in the complaint.

2. Learned counsel for the petitioner has submitted that as per the complaint, the complainant/respondent is running the business under the banner of M/S Muneer Agro Agencies, whereas in the cheque the name of the payee has been mentioned as Numis Agro Agencies (Mir Noor-ullah) and the notice has been issued by one Mir Muneer Iqbal and not the complainant himself but the learned trial court has not considered this aspect of the case and has issued the process against the petitioner in a mechanical manner.

3. Per contra, learned counsel for the respondent has argued that there was a procedural lapse and, as such, the complaint cannot be dismissed on the technical grounds. He has placed reliance on the judgment of the Hon’ble Supreme Court of India in ‘Bijoy Shankar Mishra v the State of Jharkhand and another’, 2023LiveLaw(SC) 798.

4. Heard and perused the record.

5. A perusal of the complaint reveals that the respondent had pleaded that he is a reputed dealer of agrochemicals products and is running his business under the banner of M/s Muneer Agro Agencies and the petitioner was appointed as a distributor by him. The petitioner had received huge supplies from the respondent for sale but could not make the payment in lieu of the supplies. The parties had settled their accounts and in terms of agreement dated 14.10.2011, he agreed to pay the outstanding balance of Rs.25,00,002/- to the respondent but he could not comply with the terms and conditions of the said agreement and, as such, issued the cheque of Rs. 25,00,002/- in favour of the respondent which was dishonoured, and the respondent/claimant served the demand notice dated 28.03.2012 on the accused. The learned trial court after recording the statement of the respondent and one witness, issued the process against the petitioner for commission of offence under section 138 of the Act vide order dated 23.04.2012.

6. The main contention raised by the petitioner is that no notice was served by the respondent upon the petitioner, as such, the process could not have been issued against the petitioner. A perusal of the cheque reveals that the same has been issued in the name of Numis Agro Agencies (Mir Noor Ullah) and the notice was issued by one Mir Muneer Iqbal S/o. Mir Noor-ullah, R/o Uricharsoo, Tehsil and District Pulwama, who claims to be the proprietor of M/s Numis Agro Chemicals, Pulwama.

7. It is evident that the notice dated 28.03.2012 has been issued by Mr. A. M. Padroo on the instructions of the son of the respondent and in the notice it was specifically pleaded by Mr. Mir Muneer Iqbal i.e. son of the respondent that the petitioner had cheated his client by issuing a cheque for which he had no funds in his account and the account had been closed before the cheque was issued by the petitioner. Though the petitioner has denied to have received any notice, but the respondent has filed the complaint under section 138 of the Act by placing reliance upon the notice which has never been issued by the respondent but by his son. In the cheque, the payee has been mentioned as M/s Numis Agro Agencies (Mir Muneer Ullah) and in the notice dated 22.03.2012, Mir Muneer Iqbal, i.e. the son o

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