Strict compliance with Section 138's notice requirements is essential for maintaining a complaint, and the presumption of liability under Sections 118 and 139 can be rebutted by the accused.

JUDGMENT

1. The present leave to appeal is filed against the judgment dated 26.04.2017 (hereafter ‘impugned judgment’) passed by the learned Metropolitan Magistrate (‘MM’), Patiala House Courts, New Delhi in CC No. 42989/2016 dismissing the complaint filed by the petitioner under Section 138 of the Negotiable Instruments Act, 1881 (‘NI Act’).

2. Briefly stated, the petitioner is the proprietor of M/s A. B. Consultants and is in the business of providing consultancy and other services in relation to custom clearance and freight forwarding to exporters and importers. It is alleged that the petitioner provided its services to the respondents and consequently raised regular invoices. It is alleged that a sum of ₹2,64,689/- was due to the petitioner. It is alleged that Respondent No. 1 through its managing director being Respondent No. 2, in discharge of the liability, issued two cheques bearing nos. 465680 and 465681 for a sum of ₹50,000/- each duly signed by Respondent No. 2. It is alleged that the subject cheques, on presentation, got dishonoured and returned unpaid vide return memo dated 05.01.2009 with the remarks “payment stopped.” Subsequently, when the respondents failed to make the payment within the stipulated period despite the issuance of the legal demand notice, the petitioner instituted the subject complaint under Section 138 of the NI Act.

3. By the impugned judgment, the learned MM dismissed the complaint filed by the petitioner and acquitted the respondents of the offence under Section 138 of the NI Act. It was noted that the petitioner failed to file a valid legal notice in terms of Section 138 of the NI Act; the petitioner failed to make a demand for the amount that was to be paid by the respondents; the petitioner failed to specify or raise a demand for the amount in the subject cheques; while the legal demand notice raised the issue that a sum of ₹2,64,689/- was outstanding, and that two cheques were issued by the respondents towards part payment, the details of the two cheques issued by the respondent towards part payment of the outstanding amount had not been specified.

4. The learned MM held that the petitioner failed to raise a demand for money in the legal notice as is stipulated under Section 138 (b) of the NI Act and vaguely mentioned to clear all the outstanding dues which does not meet the requisite under Section 138 of the NI Act. It was held that while the accused can be prosecuted even when the cheque gets dishonored for the reason “payment stopped by drawer”, the accused is liable to acquitted where he is able to raise a probable defence on a preponderance of probabilities to show that there existed no debt in the manner so pleaded by the complainant.

5. It was held that the respondents were able to raise a probable defence on a preponderance of probabilities by highlighting that the petitioner issued incorrect as well as double bills for the same consignment. The respondents pointed out that the petitioner failed to maintain proper statement of accounts. It was noted that while the petitioner in his complaint stated that the total outstanding sum was ₹2,64,689/-, the document produced by the petitioner in Court showed that the outstanding sum was ₹2,43,982/-. It was noted that the petitioner failed to render any explanation as to why the legal demand notice reflected the outstanding amount as ₹2,64,689/- when the amount due was only ₹2,43,982/-. Consequently, considering the invalid legal notice and the defence of the respondents, the learned MM acquitted