Kerala High Court ruled that notice served to a relative isn’t valid under Section 138(b) of the NI Act. Conviction quashed due to lack of proper legal notice to the accused.
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KERALA: In the case of Saju v. Shalimar Hardwares & Anr., the Kerala High Court addressed a crucial procedural requirement under Section 138(b) of the Negotiable Instruments Act, 1881, whether a statutory notice served on a relative of the cheque drawer satisfies legal mandates.
The Court ruled that service of notice must be effected directly upon the drawer of the cheque, and failure to do so vitiates the prosecution. This judgment reaffirms the sanctity of procedural compliance in cheque dishonour cases.
Background of the Case
The revision petitioner was the accused in C.C. No. 325 of 2019 before the Judicial First Class Magistrate Court-II, Kayamkulam, facing charges under Section 138 of the Negotiable Instruments Act, 1881.
The complainant, a proprietary concern named M/s Shalimar Hardwares, alleged that the accused purchased construction materials worth Rs. 92,500 on 02.03.2019 and issued a cheque for the said amount dated 02.04.2019. However, the cheque was dishonoured due to insufficient funds.
A statutory notice was sent on 27.04.2019, which was claimed to have been received on 30.04.2019. Despite this, the accused failed to repay the amount, leading to the initiation of criminal proceedings.
During the trial, two witnesses and multiple documents were presented by the complainant. The trial court convicted the accused and sentenced him to three months’ simple imprisonment along with a compensation of Rs. 92,500 under Section 357(3) of CrPC, with an additional one-month imprisonment in case of default.
On appeal, the conviction was upheld but the sentence was reduced to one month. The compensation order remained unchanged, prompting the present revision petition.
Arguments by the Parties
In the revision proceedings, Advocate Manjusha, appearing for the accused, argued that the statutory notice required under Section 138(b) of the Negotiable Instruments Act, 1881, was never directly served on the accused.
Instead, it was received by a relative of the accused. Crucially, there was no evidence to suggest that the accused was ever made aware of the notice.
Finding of the Court
The Court examined this contention and emphasized that
“Section 138(b) mandates that notice must be personally served on the drawer of the cheque.”
The deposition of PW1 confirmed that the notice was accepted by someone other than the accused, and there was no indication that the accused had any knowledge of this.
The Court relied on the Supreme Court’s precedent in Thomas M.D. v. P.S. Jaleel (2009 KHC 4398), where it was held that service of notice on a family member (in that case, the wife) does not fulfill the statutory requirement.
Applying the same principle, the Kerala High Court held that
“The notice served on a relative cannot be deemed valid service under Section 138(b).”
Justice P.V.Kunhikrishnan said,
“The service of notice on the relative of the accused is not sufficient, especially when there is no evidence from the side of the complainant that the accused was aware of the service of notice on his relative.”
Since the mandatory notice was not properly served, the prosecution was rendered invalid. Consequently, the Court set aside the conviction and sentence imposed by both the trial and appellate courts and acquitted the accused. All bail bonds and any deposited amounts were ordered to be released.
Case Title: Saju v. Shalimar Hardwares & Anr.
CRL.REV.PET NO. 1015 OF 2024
READ ORDER HERE
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