Cheque - Dishonour, Service of Legal Notice and Acquittal under S.138 of Negotiable Instruments Act, 1881

Cheque - Dishonour,  Service of Legal Notice and Acquittal under S.138 of Negotiable Instruments Act, 1881

In the case of Kids Collection v. Shrishti Collection [2018] GCtR 6597 (Delhi), the complaint for offence under S.138 of Negotiable Instruments Act, 1881 was dismissed. 

The case highlights the role of notice in cases of cheque - dishonour and how it affects the prosecution. 

Although accused did not denied issuing the cheque and the cheque were dishonoured, Court noted that "on perusal of the evidence led on record, it is evident that the petitioner failed to produce the certified or audited statement of running account of the respondent maintained by the petitioner to evaluate the exact liability towards the petitioner. Furthermore, no particular date was mentioned by the witnesses as to when the cheques in question were handed over by the respondent to the petitioner because the last bill in respect of material supplied was dated 27th April, 2006 and the cheques in question were of much later date of the last bill and as per the statement of Venus Kumar (CW-1), the petitioner firm did not give credit period beyond 45 days. Furthermore, though Venus Kumar claimed himself to be one of the partners of the petitioner's firm, however, no power of attorney in his favour by other partners to depose or prosecute on behalf of the petitioner's firm has been placed on record." 

Another point observed was that the "Legal notice sent to the respondent was received back with the endorsement "unclaimed and returned to sender". Address upon which the legal notice was sent to the respondent was different from the address upon which the respondent was served summons from the court. Moreover, the last bill issued to the respondent by the petitioner also mentions some other address of the respondent. Petitioner did not examine any witness from post office to prove service of legal notice upon the respondent. Thus, there cannot be any presumption of deemed service of legal notice in the present case."