D.C.W. Home Products Ltd. vs State Of Maharashtra And Ors.
2004 Latest Caselaw 442 Bom

JUDGMENT

D.G. Deshpande, J.

1. Heard Advocate for the petitioners and Advocates for respondent Nos. 2 and 3. This Special Leave Application is filed by the complainant against the judgment of acquittal of the accused under Section 138 of the Negotiable Instruments Act by the Chief Metropolitan Magistrate, 37th Court, Esplande, Mumbai, by judgment dated 19.9.2003. It was case of the complainant that accused issued a cheque for Rs. 50 lacs dated 13.2.1997 for discharging their liability. Accused No. 3 signed the cheque, complainant deposited the cheque in the Bank on 14.2.1997 but it was returned with remarks "insufficient funds in the account". Thereafter company gave notice dated 27.2.1997 by hand delivery. The accused did not make the payment inspite of the notice and hence complaint came to be filed under Section 138 of the Negotiable Instruments Act.

2. On behalf of complainant only one witness was examined S. Rajgopalan. Defence of the accused was that no notice was served upon them as required by Section 138 of Negotiable Instruments Act. Counsel for the petitioners tendered a zerox copy of notice dated 27.2.1997. It is addressed to:

Director,

REPL Engineering Ltd.,

Shivsagar Estate,

Block 'D'

Dr. Annie Besant Road,

Worli, Mumbai-400018.

3. It was the defence of the accused that the Registered or Administrative Office of the accused company is situate at Fort and not at Worli and notice which the complainant gave was addressed to some Director REPL Engineering Ltd. and, therefore, it is not compliance to Section 138 of the Negotiable Instruments Act and since there is no compliance to this basic requirement they were required to be acquitted and were rightly acquitted by the Trial Court.

4. Advocate for the petitioners strenuously urged that what is required by Section 138 is that a notice has to be given and it has to be in writing. He repeatedly urged that a notice was accepted by the accused company and there is an acknowledgement in the form of the seal of the company. This according to him constitutes service and acknowledgement of receipt of the notice and therefore if the notice is accepted then the accused cannot be permitted to challenge or deny the receipt of the notice. I do not find any substance in the submissions. Firstly, because P.W. No. 1 S. Rajgopalan who was examined by the complainant has no personal knowledge of the matter. In his cross-examination he has clearly admitted that the original complainant Arvind Dagwekar have gone to serve the notice and P.W. I had not personally gone there. He has admitted in his cross-examination that the registered office of the company was at Saroj Building, 2nd floor, D.N. Road, Mumbai, in the end of June, 1998. He admitted that the demand notice was not given to the accused on the above said registered office.

5. Admittedly the notice is tried to be served by hand delivery. No attempt is made to serve the notice by registered post. The question is even if the notice is sent by hand delivery it is for the complainant to prove that it was properly and duly served upon the accused. Admittedly complainant is having a transaction with the accused much prior to the issuance of the cheque. The amount involved in the cheque is very huge about Rs. 50 lacs or so. It cannot be said that the complainant dealing with the accused for such huge amount were not knowing about the registered office of the accused company. However, instead of addressing the notice to the accused to their registered office, it is addressed to Director, REPL Engineering Ltd., which admittedly is the sister concern of the accused. There was absolutely no relevancy of serving the notice on the sister concern of the accused at Worli when the complainant fully knew that the registered office of the accused company is in Fort.

6. Secondly, it was urged by Advocate for the applicant that seal of the company on the copy of the notice proves acknowledgement of receipt of notice by the accused. I do not find any substance in this submission also. When the accused have specifically denied receipt of the notice, when there is no acknowledgement in any other form by the accused of the receipt of the notice nor any attempt to give reply to that notice, it was for the complainant to prove by cogent, convincing and reliable evidence that this acknowledgement was issued by some one authorised on behalf of the accused company in token of having received the notice on behalf of the accused company and not by anybody from the sister concern. In the eyes of law both the companies i.e. accused company and sister concern REPL Engineering Ltd. are different legal entities. May be some of the Directors of one company are also Directors of other company but that does not affect legal status. Both Companies are totally independent of each other. P.W. 1 who was examined by the complainant has absolutely no knowledge as to where, how and by whom the seal was affixed on the copy of the notice. He has no knowledge who has put initials and he does not know whether the person putting seal or whether the person putting the initials was authorised by the company to receive the notice. Admittedly the notice is not addressed at the registered office of the company. Even it is not addressed to any specific individual i.e. accused Nos. 2 and 3. It is addressed simply to a Director.

7. Service of the notice as required by Section 138 is a crucial aspect. It is the right given to the drawer of the cheque to be aware of the steps that the holder of cheque is going to take. The notice has to be given in writing, but that is not sufficient to prove service of notice and proper proof of proper service has to be given by the complainant. Complainant has utterly failed in this matter. The Trial Court has on the admissions given by the witness for the complainant rightly dismissed the complaint. No interference is called for. Leave rejected. Application dismissed.