Sec. 138 NI Act Proceedings cannot be quashed for mere non service of notice within Statutory Period

Kishore Sharma Vs Sachin Dubey (Supreme Court of India)

The present appeal takes exception to the order dated 15th November, 2018 passed by the High Court of Madhya Pradesh, Indore Bench, thereby it allowed the application filed by the respondent for quashing of proceedings instituted against him under Section 138 of the Negotiable Instruments Act, 1881. The sole argument of the respondent commended to the High Court was that a legal notice was not duly served on him within the statutory period.  After hearing counsel for the appellant, we have no manner of doubt that the reason commended to the High Court, is unacceptable. For, the fact that notice was duly served on the respondent or otherwise, is a triable issue; and cannot be proceeded as an indisputable position-as is expounded by this Court in ‘Ajeet Seeds Limited vs. K. Gopala Krishnaiah’ reported in (2014) 12 SCC 685. Accordingly, the impugned judgment and order is set aside and the appeal is allowed. Consequently, the complaint shall now proceed against the respondent in accordance with law. 

FULL TEXT OF THE SUPREME COURT JUDGEMENT

1. Leave granted.

2. Despite successive notices served on the respondent, he has chosen not to appear. The last notice clearly mentioned that the matter will be finally disposed of at notice stage.

3. The present appeal takes exception to the order dated 15th November, 2018 passed by the High Court of Madhya Pradesh, Indore Bench, thereby it allowed the application filed by the respondent for quashing of proceedings instituted against him under Section 138 of the Negotiable Instruments Act, 1881. The sole argument of the respondent commended to the High Court was that a legal notice was not duly served on him within the statutory period.

4. After hearing counsel for the appellant, we have no manner of doubt that the reason commended to the High Court, is unacceptable. For, the fact that notice was duly served on the respondent or otherwise, is a triable issue; and cannot be proceeded as an indisputable position-as is expounded by this Court in ‘Ajeet Seeds Limited vs. K. Gopala Krishnaiah’ reported in (2014) 12 SCC 685.

5. Accordingly, the impugned judgment and order is set aside and the appeal is allowed. Consequently, the complaint shall now proceed against the respondent in accordance with law.

6. The parties shall appear before the Trial Court on 14th October, 2019.

Crl.A. @ SLP(Crl.) No.166/2019  

1. Leave granted.

2. Despite successive notices served on the respondent, he has chosen not to appear. The last notice clearly mentioned that the matter will be finally disposed of at notice stage.

3. The present appeal arises from the judgement and order dated 15.11.2018 passed by the High Court of Madhya Pradesh, Indore Bench in M.Cr.C. No.17894 of 2018 whereby the High Court allowed the quashing petition filed by the respondent under Section 482 of Cr.P.C. on two counts. Firstly, that the legal notice has not been served on the respondent within the statutory period and secondly, because of the remark noted on the cheque return memo.

4. Both these facts would require the parties to produce evidence and are triable issues, as expounded by this Court in ‘Ajeet Seeds Limited vs. K. Gopala Krishnaiah’ reported in (2014) 12 SCC 685 and in ‘Laxmi Dyechem vs. State of Gujarat and Others’ reported in (2012) 13 SCC 375. As a result, even this appeal ought to succeed. The impugned judgement and order is accordingly set aside and the appeal is allowed.

5. Consequently, the complaint shall now proceed against the respondent in accordance with law.

6. The parties shall appear before the Trial Court on 14th October, 2019 before the Trial Court.