Notice Served on Family Member Not Valid Compliance u/s 138 NI Act: Tripura HC Acquits Accused in Cheque Dishonour Case [Read Order]

In a recent ruling, the Tripura High Court held that service of demand notice on a family member of the accused is not valid compliance with Section 138 of the Negotiable Instruments Act and acquitted the accused in a cheque dishonour case after finding that the complainant also failed to prove her financial capacity to advance the alleged loan.

Sonatan Murasingh filed a criminal revision petition challenging the judgment of the Sessions Judge, Gomati District, Udaipur, which had affirmed his conviction by the Chief Judicial Magistrate in a cheque dishonour complaint filed by Tinku Sarkar.

The complainant alleged that the accused had taken a loan of Rs. 2,00,000 from her on 16 February 2022 for construction of a house. She claimed that the money was given at her house in the presence of her husband and two others, and that the accused had agreed to return it within six months.

According to the complainant, when the accused failed to repay the amount, he issued a cheque dated 21 November 2022 for Rs. 2,00,000. The cheque was dishonoured on 5 December 2022. She then issued a demand notice dated 9 December 2022 and later filed a complaint under Section 138 NI Act.

The Trial Court convicted the accused and sentenced him to pay a fine of Rs. 4,00,000, with a default sentence of six months’ rigorous imprisonment. The Appellate Court affirmed the conviction.

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Before the High Court, the accused argued that the statutory notice was not served on him. His counsel pointed out that postal correspondence showed that the notice was received by one Abhijit Murasingh, and not by the accused. He relied on M.D. Thomas v. P.S. Jaleel to argue that notice served on a family member is not valid service under Section 138 NI Act.

The accused also argued that the complainant failed to prove her source of funds. It was pointed out that she had not filed any bank statement, income tax return or document showing proprietorship over Datta Autospare.

The Bench comprising Justice Biswajit Palit observed that the complainant had failed to explain how she arranged Rs. 2,00,000. The court also observed that the notice was not served on the accused himself. The court held that both the Trial Court and Appellate Court failed to properly appreciate the evidence and law. It allowed the revision petition, set aside the conviction and sentence and acquitted the accused.

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