Sarat Chandra Pani vs State Of Odisha & Anr
2026 Latest Caselaw 3560 Ori

Orissa High Court

Sarat Chandra Pani vs State Of Odisha & Anr on 17 April, 2026

Author: Sanjeeb K Panigrahi

Bench: Sanjeeb K Panigrahi

                                            IN THE HIGH COURT OF ORISSA AT CUTTACK
                                                            CRLLP No.18 of 2023
                                      (From the judgment dated 02.01.2023, passed by the learned
                                      J.M.F.C. (LR & LTV), Baripada in 1C(c) Case No.128/ 2017/ T.C.
                                      No.608/2019)

                                      Sarat Chandra Pani                          ....              Appellant(s)
                                                                       -versus-
                                      State of Odisha & Anr.                      ....           Respondent (s)

                                      Advocates appeared in the case:
                                      For Appellant(s)          :          Mr. Debi Prasad Dhalsamant, Adv.
                                                                  -versus-

                                      For Respondent(s)            :                   Mr. Udit Ranjan Jena, AGA
                                                                                           Mr. J.K. Khuntia, Adv.

                                                  CORAM:
                                                  DR. JUSTICE SANJEEB K PANIGRAHI

                                                    DATE OF HEARING:-25.02.2026
                                                   DATE OF JUDGMENT:-17.04.2026

                                     Dr. Sanjeeb K Panigrahi, J.

1. The Appellant/complainant has preferred this CRLLP under Section

378 of the Code of Criminal Procedure, 1973 challenging the

judgment dated 02.01.2023, passed by the learned J.M.F.C. (LR &

LTV), Baripada in 1C(c) Case No.128/ 2017/ T.C. No.608/2019,

whereby the Respondent No.2 has been acquitted of the charge

under Section 138 of the N.I. Act.

I. CASE OF THE PROSECUTION:

2. Bereft of unnecessary details, the prosecution story is that the

proprietor, Maa Sarala Tour & Travels at Plot No.2472/288,

pg. 1 Ganeswarpur Januganj, a Balasore. The accused has promised to

provide an auction sale of Tata Magic Vehicle to the complainant at

the cost of Rs.2,30,000/- (Rupees Two Lakhs Thirty Thousand only).

As per the instruction of the accused, the complainant had deposited

Rs.1,00,000/- (Rupees One Lakh only) on 08.03.2017 and another

Rs.1,00,000/- (Rupees One Lakh only) on 28.03.2017 in the SBD

Account No.551620110000033 of the accused accused/ Respondent

No.2 with Bank of India, Ganeshwarpur, Ganuganj Branch, Balasore

through the Appellant/complainant in Bank of India, Kuliana

Branch. The accused had handed over a piece of paper mentioning

the accused person's and his wife's SBD account number. The terms

of agreement were that the remaining amount of Rs.30,000/- (Rupees

Thirty Thousand only) shall be paid on the date of delivery of the

said auctioned vehicle on 05.04,2017. However, the accused failed to

deliver the said auctioned vehicle.

3. On 07.04.2017, the Respondent No.2/ accused on his own accord

handed over a cheque amounting to Rs.2,00,000/- bearing No.001730

dated 07.04.2017 of Bank of India, Ganeswarpur Januganj Branch

towards dues of the Appellant/ complainant and requested to

deposit on 08.06.2017 for encashment.

4. Accordingly, on 08.06.5017 the Appellant submitted the cheque for

encashment with Bank of Indian Kuliana Branch in his SBD Account

No.5479101100002418. But, the said cheque was dishonored due to

insufficient funds in the account of the Respondent No.2/ accused.

pg. 2

5. Thereafter, the Appellant/ complainant issued a Pleader's

Notice/Demand Notice through its Advocate Sri B.K. Padhi to the

accused. However, the registered notice with A.D. dated 21.06.2017

was returned on 30.06.2017 with postal remaks "All Times Closed".

Thereafter, the Appellant filed 1C(c) Case No.128 of 2017 before the

learned Judicial Magistrate First Class (LR & LTV), Baripada,

Mayurbhanj.

6. The accused appeared on 27.11.2017 and denied the allegations. The

prosecution examined and cross-examined three witnesses. On the

other hand, no witness was examined by the accused.

7. The learned trial court held that the complainant failed to prove the

major averment which questions the maintainability of the case, of

difference in the address of the accused in the demand notice for

which the case is not maintainable as because Section 138(b) of the

N.I. Act has not been complied with. Hence, the accused has not

been found guilty for offences under Section 138 of the N.I. Act and

acquitted therefrom as per the provision under Section 255(1) of the

Cr.P.C.

8. Being aggrieved by the said judgment of acquittal, the Appellant/

complainant has preferred the present CRLLP.

II. SUBMISSIONS ON BEHALF OF THE APPELLANT/COMPLAINANT:

9. In assailing the impugned judgment, learned counsel for the

Appellant/complainant submitted that though the Court below

satisfied that the cheque in question was issued by the accused in

pg. 3 favour of the Appellant to discharge his legally enforceable debt and

the cheque was returned unpaid due to insufficient funds in the

account of the accused, but found the Respondent No.2 not guilty is

bad in law.

10. Learned court below erred in law and fact that in the demand notice

the address of the accused was given as Plot No.247/288,

Ganeswarpur, Janugang, Balasore as per the address of the accused

mentioned in his Bank account and in the complaint petition the

address of the complainant has been mentioned as Plot No.2472/2188

Ganeswarpur, Janugang, Balasore which is a typographical error.

Therefore, the demand notice has not been duly served.

11. The demand notice dated 21.06.2017 was returned with a postal

remark All Times Closed. In view of the law laid down by the Apex

Court that in order to avoid to receive notice if the accused closed

the shop, the notice itself be treated as sufficient.

12. The Learned Court below is erred that the demand notice was

issued in a wrong address but the accused/ Respondent No.2 has

submitted his address in bank Account as Plot No.2472/288,

Ganeswarpur, Janugang, Balasore and the accused received the

notice issued from the court below in a wrong address (Plot

No.2472/2188 mentioned in the complaint petition.

13. In such view of the matter, it was contended that the impugned

judgment of acquittal should be set aside.

pg. 4 III. SUBMISSIONS ON BEHALF OF THE RESPONDENT NO.2:

14. In reply, learned counsel for the Respondent No.2 submitted that

the Appellant had given Rs.2,00,000/- to the Respondent No.2 for

purchasing one auction sale TATA Magic vehicle. However, the

Respondent No.2 failed to deliver the said auctioned vehicle and

promised to return the amount but handed over a cheque of Bank of

India, Ganeswarpur, Januganj Branch towards dues. The Appellant

deposited the said cheque in Bank of India but the same was

dishonoured due to insufficient funds in the account of the accused.

Hence, this case arises.

15. He further submitted that the legal notice has not been served in the

correct address of the Respondent No.2. Section 138 of N.I. Act

mandates issuance of the statutory notice as a precondition to filing

of a complaint. The cause of action to file a complaint under Section

138 of N.I. Act arises only on issuance and service of statutory notice

and failure of the accused to comply with the statutory notice as has

been decided in M/s. Ajeet Seeds -vrs- K. Gopala Krishnaiah1.

16. It was contended that in absence of service of statutory notice, the

cause of action would not accrue. Service of statutory notice would

also include legal presumption of service of circumstances so

warrant.

17. The Clause (b) of Section 138 of NI Act clearly states that the said

demand notice has not been duly served to the accused.

(2014) 12 SCC 685 Date: 30-Apr-2026 14:53:51 pg. 5

18. In this case, the complainant/Appellant failed to prove his case

against the accused beyond all reasonable doubt and the

complainant failed to prove the major factor which question the

maintainability of the case oi difference on the address of the

accused in the demand notice.

19. Since the provision under Section 138(b) of N.I. Act is not complied

with which is mandatory for the complainant, the accused

(Respondent No.2) is not found guilty and no cause of action arose

for initiation of the complaint case under Section 138 of N.I. Act.

20.Based on the aforementioned submissions, it is submitted that there

is no merit in the present Appeal filed by the

Appellant/complainant, and the same is liable to be dismissed in

limine.

IV. FINDINGS OF THE LEARNED TRIAL COURT:

21. The learned trial court while passing the impugned judgment of

conviction and order of sentence has recorded as follows:

(i) After taking into consideration the facts and circumstances and

also the materials available on record, the trial court held that the

complainant has entirely failed to prove its case against the

accused beyond all reasonable doubt. The complainant has also

failed to proof the major averment which questions the

maintainability of the case, of difference in the address of the

accused in the demand notice and complaint petition which has

not been duly satisfied by the complainant. Therefore, the said

pg. 6 case is not maintainable as Section 138(b) of the NI Act has not

been complied with which is sine qua non for the complainant to

bring forth the said case. In the result, the accused is not found

guilty for the offence under Section 138 of N.I. Act and is

acquitted therefrom as per the provision under Section 255(1) of

the Cr.P.C. as no cause of action for launching a prosecution on

the basis of a cheque being dishonoured is made out.

V. COURT'S REASONING AND ANALYSIS:

22. This Court has heard the submissions made by the learned counsel

for the Parties and also carefully perused the evidence on record.

(i) At the outset, this Court is mindful of the settled parameters

governing interference with an order of acquittal. Though the

appellate court possesses full power to reappreciate evidence,

such power must be exercised with circumspection.

However, where the findings of the trial court are manifestly

erroneous, based on erroneous application of law, or result

in miscarriage of justice, interference by this Court is not only

permissible but imperative. The present case falls squarely

within such an exception, as the acquittal rests not on an

appreciation of evidence but on a hyper-technical

interpretation of statutory compliance.

(ii) The basic facts are largely undisputed. The issuance of the

cheque by the accused and its dishonour for insufficiency of

funds have been accepted by the learned trial court. Once

pg. 7 these foundational facts are established, the statutory

presumptions under Sections 118 and 139 of the Negotiable

Instruments Act, 1881 come into operation which compel the

Court to presume that the cheque was issued in discharge of

a legally enforceable debt or liability. This presumption,

though rebuttable, places a reverse burden upon the accused.

In the present case, the accused has chosen not to adduce any

evidence to rebut such presumption. A mere denial, bereft of

supporting material, does not suffice to discharge this

burden. Thus, the existence of legally enforceable liability

stands proved.

(iii) The principal ground on which the learned trial court has

recorded acquittal pertains to alleged non-compliance with

clause (b) of Section 138, namely, non-service of the statutory

demand notices due to discrepancy in the address. This

Court finds such reasoning to be legally untenable.

(iv) The requirement of issuance of notice under Section 138(b) is

indeed mandatory; however, the law does not insist upon

actual service in every conceivable circumstance.

Jurisprudence in this aspect has consistently evolved to

recognize the doctrine of deemed service, particularly where

the conduct of the drawer indicates evasion. When a notice is

dispatched to the correct or substantially correct address of

the drawer and is returned with endorsements such as

"refused," "not claimed," or, as in the present case, "All

pg. 8 Times Closed," the Court is entitled to draw a presumption

of due service. Any contrary interpretation would enable a

dishonest drawer to defeat the statutory mandate by the

simple expedient of avoiding service.

(v) The discrepancy in the address, which weighed heavily with

the trial court, appears on closer scrutiny to be trivial rather

than substantive. The address mentioned in the notice and

that in the complaint substantially refer to the same premises

and locality. Significantly, the address corresponds with

what has been furnished by the accused in his bank records.

More importantly, the accused has received process from the

court at the very address now alleged to be incorrect. This

circumstance demolishes the defense of non-service and

reinforces the presumption that the notice, when sent, was

directed to the correct destination.

(vi) The law does not require pedantic perfection in drafting of

addresses; it requires substantial compliance sufficient to

identify and reach the addressee. To hold otherwise would be

to elevate form over substance, thereby frustrating the object

of the statute.

(vii) It is also necessary to bear in mind that the object of

introducing Chapter XVII of the Negotiable Instruments Act

was to enhance the credibility of commercial transactions and

to instill faith in the banking system. The provision must,

pg. 9 therefore, receive an interpretation that advances the

legislative intent rather than defeats it.

(viii) The approach of the learned trial court, in isolating a minor

clerical discrepancy and treating it as fatal, runs contrary to

this settled principle of purposive interpretation. Courts are

not to be swayed by inconsequential irregularities when the

substantive ingredients of the offence stand established.

(ix) Furthermore, the reasoning of the trial court reflects an error

in law inasmuch as it failed to consider that the accused had

knowledge of the transaction, issuance of cheque, and the

consequential liability. The purpose of the statutory notice is

to afford an opportunity to the drawer to make payment and

avoid prosecution. In the present case, the conduct of the

accused, coupled with the surrounding circumstances, clearly

indicates awareness of the liability and deliberate avoidance.

In such a situation, insistence on strict proof of actual service

would amount to rewarding evasive conduct, which the law

does not countenance such a proposition.

(x) Viewed from another angle, even assuming arguendo that

there was some irregularity in the address, the same does not

go to the root of the matter so as to vitiate the entire

prosecution. Criminal jurisprudence recognizes that

procedural prescriptions are handmaids of justice and not its

mistress. Unless prejudice is demonstrated, such

irregularities cannot be elevated to the status of fatal defects.

pg. 10 In the present case, no prejudice whatsoever has been shown

to have been caused to the accused.

(xi) Thus, the overall effect of the above discussion leads this

Court to the irresistible conclusion that the learned trial court

has erred in law by discarding an otherwise cogent

prosecution case on an untenable and hyper-technical

ground. The finding of non-maintainability is perverse, being

contrary to both the evidence on record and the settled legal

position governing Section 138 of the Negotiable Instruments

Act.

VI. CONCLUSION:

23. In the conspectus of the foregoing analysis, this Court is persuaded

to hold that the impugned judgment of acquittal is vitiated by a clear

misapplication of law and an approach that accords undue primacy

to inconsequential technicalities over substantive justice. The learned

trial court, having rightly appreciated the foundational facts relating

to issuance and dishonour of the cheque, fell into manifest error in

non-suiting the complainant on the purported ground of non-service

of statutory notice, without appreciating the settled doctrine of

deemed service and the principle of substantial compliance.

24. The discrepancy in the address, being purely clerical in nature and

not affecting the identity or reachability of the accused, could not

have been construed as fatal to the prosecution. The statutory

presumptions operating in favour of the complainant under the

pg. 11 Negotiable Instruments Act, 1881 having remained unrebutted, the

existence of a legally enforceable debt stands firmly established. The

accused, by neither rebutting the presumption nor demonstrating

any prejudice arising from the alleged defect, cannot be permitted to

escape liability on such tenuous grounds.

25. This Court, therefore, finds that the acquittal recorded by the learned

trial court is perverse, unsustainable in law, and has resulted in a

miscarriage of justice. The same is, accordingly, set aside. The

prosecution having successfully established all essential ingredients

of the offence under Section 138 of the Act, the liability of the

accused stands proved in accordance with law.

26. The Criminal Leave Petition is thus allowed, and the impugned

judgment is hereby reversed, restoring the sanctity of the legislative

intent underlying the statute and reaffirming that the process of law

cannot be thwarted by evasive tactics or trivial irregularities.

( Dr. Sanjeeb K Panigrahi ) Judge Orissa High Court, Cuttack, Dated the 17th April, 2026/

pg. 12