The High Court · 2025

..-Respondenfl De-facto Complainant Petition under Section 482 of Cr 'P 'C praying that in the circumstances stated in the Memorandum of c'*nOt oiC'iminat petition' the High Court may be pleased s i c r'r'r'No go of 2ozz' on the file of to ouash the i"r," T nliiti.nur LJi"iir Magistrate of First Class' at Jagtial' "o*prani"li - l.A. NO: 20F 2023 Petition under Section 482 of Cr'P C praying that in the circumstances stated in the Memorandum of ctorno"li ciiminat'peiition,the High Court may q:.plt1t:g of the petitioner tn to stav of all further pio"t"Aingt including .appearance i-," ii" oi ih" rlooitionat Judicial Magistrate of First L"r]ililr ,.'nrr'id "i'ztzi.'"i Class, at Jagtial. ThisPetitioncomingonforhearing,uponperusingtheMemorandumof -petition and upon hearing the arguments of Grounds of Criminal Sri K.Venumadhav , Advocate for the Petitioner and Smt S' Madhavi' learned Assistant Public Prosecutor on behalf of the Respondent No' 1 and of Sri Alluri Divakar Reddy, learned counsel for the Respondent No 2 ' The Court made the following: ORDER ,".4^*/.- ) THE HONOURABLE SMT. JUSTICE JUWADISRIDEVI CRIMINAL PETITION No.'l'l 2610F 2023 ORDER This Criminal petition is filed by the petitioner-accused seeking to quash the proceedings against him in S.T C.N.l No.36 of 2022 on the fire of the rearned r Additionar Judiciar tVlagistrate of First Class at Jagtial, registered for the offence under Section 138 of Negotiable lnstruments Act (for short ,N.l Act,).

02. Heard Sri K.Venumadhav, learned counsel for the petitioner-accused, Smt.S.l\rladhavi, learned Assistant public Prosecutor for the State respondent No.1 and Sri Alluri Divakar Reddy' learned counser for the respondent No.2. perused the record

03. Brief facts of the case are that the respondent No.2_ complainant is the owner and possessor of land admeasuring Acs.10-01 guntas in Survey Nos 2i0, 211,21111,212,21311, and 214, and his friend lVlohammad lVlasood, S/o Abdul, R/o Jagtial, is also the owner and possessor of land admeasuring Acs.10_01 guntas in Survey Nos.210, 21112, 212, and 213, situated at Kondapur Viilage, Medipaly rVrandar rt is aileged that the 2 petitioner-accused approached the respondent No.2 with a proposal to purchase the said lands, and an agreement dated 08.07.2020 was executed in writing. pursuant thereto, the petitioner-accused paid Rs.52,60,000/_, with the balance consideration to be paid within two months for registration of the sale deed. Subsequenfly, the respondent No.2 received multiple payments from the petitioner_accused. However, despite repeated demands, the petitioner_accused failed to clear the remaining amount. ln the first week of February 2021 , respondent No.2 demanded a refund, upon lvhich the petitioner_ accused issued a cheque dated 22.03.2021 for Rs.4,50,000/_. When presented, the cheque was dishonoured with an endorsement "insufficient funds,,. A legal notice dated 17.O4.2021 was issued by the respondent No.2, whrch was returned unclaimed as the petitioner-accused was absent. Hence, the present complaint.

04. Learned counsel for the petitioner_accused submits that the respondent No.2 suppressed the fact that the petitioner_ accused had paid the entire sale consideration to the respondent No.2 and his friend on 20.03.202,1 , and, upon receipt thereof, both executed registered sale deeds in favour of the petitioner_ :"--4 i:' ,::a:E;+=r 3 accused. lt is contended that the complaint is not maintainable as it was filed against Sri Rajanna Hospital, represented by Dr. Bathula Ramaiah, though the sale transaction was with Dr. Bathula Ramaiah in his personal capacity and not with Sri Rajanna Hospital lt is fu(her submitted that no statutory legal notice was served upon the petitioner-accused, and in the absence of such notice as required under Sectiorr 138(b) of the N.l. Act, the initiation and continuation of criminal proceedings amount to an abuse of process of law. lt is also urged that since respondent No 2 and his friend had already executed registered sale deeds on 20.03.2021, there was no legally enforceable debt or liability on the part of the petitioner-accused. Hence, while praying to quash the criminal proceedings against the petitioner- accused, he relied on a decision of the Hon'ble Supreme Court in M.D. Thomas v. P.S. Jaleell , wherein, in paragraphs 4 and 5, it was held that. !Q. Learned Counsel for the appellant argued that his client's conviction is liable to be et aside because before filing complaint, the respondent did not serve upon his notice as per the requirement of clause (b) of proviso to Section 138 of the Act. He submitted that service of notice on the appellant's wife 1 2009 Lawsuit (sc) 1050 4 cannot be treated as compliance of the mandate of law. Learned counsel for respondent No.1 did not dispute that the notice. issued by his client was, in fact, upon the appellant's wife but ,rgu"d ;erye-d that this should be treated as suffiiient compliance of the requirement of giving notice of demand. (il Section 138 deats with the dishonour of cheque for insufficiency. etc., of funds in the accounts of the person who draws the cheque and lays down that such person shall be deemed to have commitied an offence and shall, without prejudice to any other provisions of this Act, be punishei with imprisonment for a term which may be extended to two years, or with firre wirich may extend to twice the amount of the cheque, or with both. proviso to Section '1 38 specifies the conditions which are required to be satisfied before a person can be convicted for an offence enumerated in the substantive part of the section, clause (b) of the proviso to Section 138 cast on the payee or the holder in due course of the cheque, as the case may be, a duty to make a demand for payment of the iaid amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return oi the cheque as unpaid. In the present case, the notice of demand was served upon the yjte of the appellant and not the appellant. Therefore, there is no escape from the conclusion that compla inant_respon dent had not complied with the requirement of giving notice in terms of Clause (b) of proviso to Section 1 38 of the Act. Unfortunately, the High Court overlooked this important lacuna in the complainant,s :.,, --- rj:+u'a-,r' 5 case. Therefore, the convtction of the appellant cannot be sustained."

05. On the other hand, learned Assistant Public Prosecutor appearing for the State-respondent No.1 as well as learned counsel for respondent No.2 contended that there are triable issues and factual aspects to be examined by the learned trial Cou( and it is not a fit case to quash the proceedings against the petitioner-accused at this juncture and the matter is to be decided after conducting trial by the learned trial Court and hence, prayed to dismiss the criminal petition. Perused the record

06. The primary rssues that anse for consideration are (i) Whether there was a legally enforceable debt or liability on the date of presentation of the cheque; and (ii) Whether the absence of service of statutory notice under Section 138(b) N.l. Act vitiates the proceed ing s.

07. lt is an admitted fact that registered sale deeds were executed by respondent No.2 and his friend in favour of the petitioner-accused on 20.03.2021. The execution of such sale deeds ordinarily signifies that the entire sale consideration has 6 &x$i*t1{ been paid, unless proved otherwise. No material has been produced by respondent No.2 to demonstrate that any further liability subsisted post-execution of the sale deeds. ln the absence of such liabitity, the provisions of Section 138 N.l Act cannot be invoked

08. As regards the statutory notice, Section .l 3B(b) of the N.l. Act mandates that the payee shall make a demand for the payment of the said amount by giving a notice in writing to the drawer of the cheque within thirty days of the receipt of information regarding dishonour service of notice is not a mere procedural formality but a condition precedent to the cause of action. 1i

09. ln the present case, the statutory: notice sent by respondent No.2 was returned with the ,,unclaimed.,, "noor."rJft The record does not reveal that any further attempt was made to serve the notice personally or through alternative modes as recognized under law. Though deemed service may be presumed in certain circumstances, such presumption is rebuttable, and in the facts of this case, particularly when the petitioner asserts non_ receipt and the complaint itself rs based on a disputed transaction, the benefit must go to the accused.

10. ln view of the above findings, both on the absence of a legally enforceable debt and on non_service of statutory notice, the continuation of criminal proceedings against the petitioner_ accused would amount to an abuse of process of law. 11 . Accordingly, this Criminal petition is allowed and the criminal proceedings against the petitioner_accused in S.T.C.N.l. No.36 of 2022 on the file of the learned I Additronal Judicial lVlagistrate of First Class at Jagtial, are hereby quashed. As a sequel, pending miscellaneous applications, if any, shall stand closed. ASSI t1 SD/- C. DEEPIKA TANT REGISTRAR ECTION OFFICER //TRUE COPY// To, I\i

1. The I Additional Judicial Magistrate of First class at Ja\ti al, District Jagtial 2. One CC to Sri K.Venumadhav, Advocate IOPUC] 3. One CC to Sri Alluri Divakar Reddy, Advocate [OPUC] 4. Two CCs to the Public Prosecutor, High Court for the State of Telangana' Hyderabad. [OUT]

5. Two CD CoPies GA/gh 0k HIGH COURT DATED:2910812025 (l i.1 S iA I6' f ) 1E SEP 2$5 j -: *-,/ J. -/ .b/ .1- g, i'," .i/ 'a--:=::)"' ORDER CRLP.No.11261 o12023 * C6 ALLOWING THE GRL.PETITION Yp- tA s(