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“Given the above-mentioned settled legal position, it is clear that the complaint cannot be thrown at the threshold even if it does not make a specific averment regarding service of notice on the drawer on a specific date. The complaint, on the other hand, must include basic information about the mode and manner of providing notice to the drawer of the cheque”, said Justice Vivek Varma J of the Allahabad High Court in the matter of “Ganesh Babu Gupta v. State of UP and others [APPLICATION U/S 482 No. – 4656 of 2021].

The order was issued in response to the petition filed where the applicant’s learned counsel contended that the entire set of allegations is false. The cheque in question was not issued to pay off any existing debts or liabilities. In reference to the complaint, it was also argued that the date of service of notice was not disclosed. Until and unless the date of service of the notice is disclosed, there is no cause of action to initiate a prosecution under Section 138 of the Act.

Section 138 of the Act says :

“138. Dishonour of cheque for insufficiency, etc., of funds in the accounts: 

Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both: 

PROVIDED that nothing contained in this section shall apply unless- 

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier. 

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and 

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

The court held in the following matter that applying the foregoing conclusions to the facts of this case, it must be concluded that the High Court clearly erred in dismissing the complaint on the grounds that there was no recital in the complaint that the notice under Section 138 of the NI Act was served on the accused. The High Court also erred in dismissing the complaint because there was no proof that the notice was served or that it was returned undelivered/unclaimed. That is a matter of proof.

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