important point
Service of notice being a part of cause of action for lodging the complaint, once the notice is dispatched, payee’s part is over.

Headnote:(a)Negotiable Instruments Act, 1881 – Section 138 – Service of notice – The requirements of service of a notice is no longer res-integra – The notice was only required to be dispatched and its contents were required to be communicated – The court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure – The context envisaged in Section 138 of the act invites a liberal interpretation for the person who has the statutory obligation to give notice because he is presumed to be the loser in the transaction and it is for his interest the very provision is made by the legislature – Once the notice is dispatched payee’s part is over – Service of notice is a part of cause of action for lodging the complaint. (Paras 16, 18, 20 and 21)
       JT 2007(7) SC 498; (1999) 7 SCC 510; JT 2007 (9) SC 496 – Relied upon.
       (b)Negotiable Instruments Act, 1881 – Sections 138 and 141 – Being a Director of Appellant No. 1 Company, Appellant No. 2 is merely vicariously liable for the acts of the company – He could be prosecuted only if the ingredients laid down in Section 141 of the Act are satisfied. (Para 21)
       (2007) 9 SCALE 371– Relied upon.
       (c)Negotiable Instruments Act, 1881 – Section 138 – The affidavits with regard to service of notice do not disclose the time and place of service – Moreover, complaint petition having been filed within two days of the affidavits was premature – The impugned judgment therefore can not be sustained. (Para 23)
       (d)Negotiable Instruments Act, 1881 – Section 138 – Conduct of the appellant, is not material for determining the issue of service of notice.(Para 25)
       Facts of the case:
       1.Respondent filed a complaint petition in the 33rd Court of Learned Metropolitan Magistrate at Ballard Pier, Mumbai on 9.4.2000 against the appellant herein alleging, inter alia, that as nine cheques delivered by him have bounced, they have committed an offence under Section 138 of the Negotiable Instruments Act.
       2. Cheques were admittedly issued on 16.3.2000. The memo in regard to non-payment of the said cheques was received by the respondent on 16.3.2000. Legal notices were allegedly issued on 30.3.2000. However the notice was not sent under registered cover with acknowledgment due. Even the couriers’ service was not availed. Employees belonging to Advocates for the respondents were asked to serve notices. Affidavit of service was filed on 8.5.2000.
       3.Cognizance was taken by the Metropolitan Magistrate, 33rd Court Ballard Pier, Mumbai on 24.4.2003.
       5. Appellants filed an application for recalling of the processes served on them on the premise that the requirements to comply with proviso (c) appended to Section 138 of the Act having not been complied with, issuance of summons was illegal. The said plea was rejected by the Magistrate.
       6.The Criminal Revision Application was allowed by the Sessions Judge, Bombay on 1.4.2004,
       7.The High Court on the second revision filed by the respondent herein, however, passed the impugned order holding that the service of the notice by hand delivery, would be sufficient for issuance of process against the respondents.
       Findings of the Court:
       In absence of mention of any date or place of hand delivery in the affidavit, notice cannot be said to have been validly served. Even if the service of notice was held to be proper, filing of complaint case within two days of the affidavit affirming service was pre-mature. Hence impugned judgment could not be sustained.
       Result : Appeal allowed.

judgment

S.B. Sinha, J. —

1.Leave granted.

2.Respondent filed a complaint petition in the 33rd Court of Learned Metropolitan Magistrate at Ballard Pier, Mumbai against the appellant herein alleging, inter alia, that as nine cheques delivered by him having bounced, they have committed an offence under Section 138 of the Negotiable Instruments Act (hereinafter referred to as “the Act”).

3. It was alleged that a notice was served asking the appellants to pay the amount in question within a period of 15 days from the date of receipt thereof.

4.Cheques were admittedly issued on 16.3.2000. The memo in regard to non-payment of the said cheques was received by the respondent on 16.3.2000. Legal notices were allegedly issued on 30.3.2000 by the respondents Advocate intimating the appellants as regards the dishonour of the said cheques and calling upon them to make payment of the amount of cheque, stating;

4.Our clients presented all the aforesaid cheques for payment on 16th March, 2000 through their bankers, Saraswant Co-op Bank Ltd., Woli Branch, Mumbai 400 018. All the aforesaid cheques were dishonoured and returned to our clients by their bankers, vide advice dated 16th March, 2000, with the remark “Funds Insufficient”, which was received by our clients on 16/3/2000.

5.Under these circumstances, we hereby give you notice under section 138 of the Negotiable Instruments Act, 1881, as amended to date to make payment of the said sum of Rs. 5,31,47,792/- payable by you to our clients being the aggregate amount of the aforesaid dishonoured cheques, together with interest thereon at the rate of 18% p.a. from 16th March 2000, within fifteen days of receipt of this notice by you, failing which our clients shall be constrained to initiate criminal proceedings against you under section 138 of the Negotiable Instruments Act, 1881 at your entire risk as to costs and consequences.

5.The said notice was not sent under registered cover with acknowledgment due. Even the couriers service was not availed. Employees belonging to M/s. Mulla & Mulla & Craigie Blunt & Caroe, Advocates for the respondents were asked to serve notices. Affidavit of service was filed on 8.5.2000. Ramchandra Damaji Khadpe, one of the employees of the Lawyers Firm affirmed on affidavit in that behalf stating:-

“2. I say that I went to 34, Adarsh Nagar Worli, Mumbai, 25 being the address of and furnished by Arvind Naik the Director of M/s Sarav Investment and Financial Consultancy Pvt. Ltd. However the said premises were locked. On making enquiries with the neighbour it was found that they had shifted to Bhatachi Chawl in Worli. I say that I also went to this address, however even there accused. Arvind Naik was not available and after making enquiries from the occupants I understood that Accused Arvind Naik had sold the premises and was no longer available there.

4. In view of the above I say that the said notice has been duly served upon Mr. Arvind Naik Director of M/s. Sarav Investments & Consultancy Pvt. Ltd. the said service upon them has been duly completed in accordance with law.”

6.Vilas Salvi, another employee of the firm, in his affidavit stated:-

“2. I say that I went to 407, Jayesh Smruti, Near Bhagshala Ground, Dombivili (W), Thane being the address of the registered office of Sarav Investment & Financial consultancy Pvt. Ltd. as furnished by accused No. 2 However, there was no office and the door was answered by a lady who was not for with any information and also refused to accept service of the letter.

4. In view of the above I say that the said notice has been duly served upon Mr. Arvind Naik Accused No. 2 Director of M/s. Sarav Investments & Consultancy Pvt. Ltd. and upon the company Accused No. 1. The said service upon them has been duly completed in accordance with law.”

7.The complaint petition was filed on 9.4.2000. In regard to the alleged service of notice, it was stated:-

“6. The said notice was sent to Accused Nos. 1 and 2 by Hand Delivery, but to the shock of the re

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2007 Supreme(SC) 1431

important pointService of notice being a part of cause of action for lodging the complaint, once the notice is dispatched, payee’s part is over.

Cases Referred (3)

important point
Service of notice being a part of cause of action for lodging the complaint, once the notice is dispatched, payee’s part is over.