High Court

1. Vakalatnama filed by Sri Rohit Chaudhary and Sri Rahul Chaudhary on behalf of O.P. No.2 is taken on record.

2. Heard Sri Rajiv Chowdhury, learned counsel for the applicant, Sri Moti Lal, learned A.G.A. for the State and Sri Rahul Chaudhary for O.P. No.2.

3. This is an application under Section 528 of BNSS preferred by the applicant for quashing the summoning order dated 16.10.2024 passed by Additional Chief Judicial Magistrate Court No.5, Agra in complaint Case No.12797 of 2024 (M/s Mahindra & Mahindra Financial Services Limited Vs Jitendra Bhardwaj) Under Section 138 of N.I. Act, P.S. Hariparwat, District Agra.

4. Learned counsel for the applicant has submitted that a complaint was lodged by the O.P. No.2 on 10.05.2024 under Section 138 of N.I. Act against the applicant with an allegation that the applicant herein had drawn a cheque bearing number "5509" of an amount Rs.1,60,000/- dated 27.02.2024, which on presentation in the bank on 07.03.2024 came to be dishonoured with the remarks 'fund insufficient' followed by a statutory demand notice issued on 03.04.2024 and a complaint on 10.05.2024 and the applicant came to be summoned under Section 138 of N.I. Act on 16.10.2024. Learned counsel for the applicant has submitted that the summoning order cannot be sustained for more than one reason. Firstly, there is a recital in the complaint in para-6 that the statutory demand notice came to be issued on 03.04.2024, but there is no date of service of the said notice, thus there has been infraction and non-compliance of the provisions contained under Section 138 read with Section 142 of N.I. Act. Secondly the cheque in question is a security cheque with the O.P. No.2 and thus it does not answer the description of debt and liability under Section 138 of the N.I. Act.

5. Learned A.G.A. on the other hand submits that so far as the issue relatable to non-service of the statutory demand notice is concerned, the same is subject matter of trial and further whether the cheque is a security cheque or not is a question which is to be taken into account in trial proceeding.

6. I have heard submissions so made across the Bar and perused the record carefully.

7. The sole question which arises for determination is the extent of judicial intervention at this stage. Apparently, as per the allegations made in the complaint, the cheque, which came to be dishonoured on 07.03.2024 followed by a statutory demand notice dated 03.04.2024. The issue as to whether the statutory demand notice came to be served is a question of trial, as what would be suffice is a clear recital in the complaint regarding issuing of the statutory demand notice. The Hon'ble Apex Court in the case of Ajeet Seeds Ltd. Vs. K. Gopala Krishnaiah, (2014) 12 SCC 685, in paragraph- 10 and 11 has held as under: - "10. It is thus clear that Section 114 of the Evidence Act enables the Court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. Section 27 of the GC Act gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. It is not necessary to aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business.

11. Applying the above conclusions to the facts of this case, it must be held that the High Court clearly erred in quashing the complaint on the ground that there was no recital in the complaint that the notice under Section 138 of the NI Act was served upon the accused. The High Court also erred in quashing the complaint on the ground that there was no proof either that the notice was served or it was returned unserved/unclaimed. That is a matter of evidence. We must mention that in C.C. Alavi Haji, this Court did not deviate from the view taken in Vinod Shivappa, but reiterated the view expressed therein with certain clarification. We have already quoted the relevant paragraphs from Vinod Shivappa where this Court has held that service of notice is a matter of evidence and proof and it would be premature at the stage of issuance of process to move the High Court for quashing of the proceeding under Section 482 of the Cr.P.C. These observations are squarely attracted to the present case. The High Court?s reliance on an order passed by a two-Judge Bench in Shakti Travel & Tours is misplaced. The order in Shakti Travel & Tours does not give any idea about the factual matrix of that case. It does not advert to rival submissions. It cannot be said therefore that it lays down any law. In any case in C.C. Alavi Haji, to which we have made a reference, the three- Judge Bench has conclusively decided the issue. In our opinion, the judgment of the two-Judge Bench in Shakti Travel & Tours does not hold the field any more."

8. As regards the second submission of learned counsel for the applicant that the said cheque was a security cheque is concerned, the same is a subject matter of trial. In M/s Womb Laboratories Private Limited Vs. Vijay Ahuja & another, (2022) 18 SCC 631, the Hon'ble Apex Court had the occasion to consider the issue as to whether the determination can be done at the stage of summoning when the allegation that the cheque was a security cheque is concerned. The Hon'ble Apex Court has observed as under: - "In our opinion, the High Court has muddled the entire issue. The averment in the complaint does indicate that the signed cheques were handed over by the accused to the complainant. The cheques were given by way of security, is a matter of defence. Further, it was not for the discharge of any debt or any liability is also a matter of defence. The relevant facts to countenance the defence will have to be proved - that such security could not be treated as debt or other liability of the accused. That would be a triable issue. We say so because, handing over of the cheques by way of security per se would not extricate the accused from the discharge of liability arising from such cheques."

9. The aforesaid law has been followed subsequently in Sunil Todi and others vs. State of Gujarat, (2022) 16 SCC 762.

10. Further this Court in Application u/s 528 of BNSS No.8615 of 2025, Amarjeet Yadav vs. State of U.P. and another, has also decided the said issue.

11. Accordingly, interference is declined. The application is disposed of leaving it open to the applicant to contest the trial before the court below while taking all the legal and factual grounds and this Court has no reason to disbelieve that the court below shall consider the same in correct perspective. Order Date :- 4.8.2025 N.S.Rathour (Vikas Budhwar, J)

1. Vakalatnama filed by Sri Rohit Chaudhary and Sri Rahul Chaudhary on behalf of O.P. No.2 is taken on record.

2. Heard Sri Rajiv Chowdhury, learned counsel for the applicant, Sri Moti Lal, learned A.G.A. for the State and Sri Rahul Chaudhary for O.P. No.2.

3. This is an application under Section 528 of BNSS preferred by the applicant for quashing the summoning order dated 16.10.2024 passed by Additional Chief Judicial Magistrate Court No.5, Agra in complaint Case No.12797 of 2024 (M/s Mahindra & Mahindra Financial Services Limited Vs Jitendra Bhardwaj) Under Section 138 of N.I. Act, P.S. Hariparwat, District Agra.

4. Learned counsel for the applicant has submitted that a complaint was lodged by the O.P. No.2 on 10.05.2024 under Section 138 of N.I. Act against the applicant with an allegation that the applicant herein had drawn a cheque bearing number "5509" of an amount Rs.1,60,000/- dated 27.02.2024, which on presentation in the bank on 07.03.2024 came to be dishonoured with the remarks 'fund insufficient' followed by a statutory demand notice issued on 03.04.2024 and a complaint on 10.05.2024 and the applicant came to be summoned under Section 138 of N.I. Act on 16.10.2024. Learned counsel for the applicant has submitted that the summoning order cannot be sustained for more than one reason. Firstly, there is a recital in the complaint in para-6 that the statutory demand notice came to be issued on 03.04.2024, but there is no date of service of the said notice, thus there has been infraction and non-compliance of the provisions contained under Section 138 read with Section 142 of N.I. Act. Secondly the cheque in question is a security cheque with the O.P. No.2 and thus it does not answer the description of debt and liability under Section 138 of the N.I. Act.

5. Learned A.G.A. on the other hand submits that so far as the issue relatable to non-service of the statutory demand notice is concerned, the same is subject matter of trial and further whether the cheque is a security cheque or not is a question which is to be taken into account in trial proceeding.

6. I have heard submissions so made across the Bar and perused the record carefully.

7. The sole question which arises for determination is the extent of judicial intervention at this stage. Apparently, as per the allegations made in the complaint, the cheque, which came to be dishonoured on 07.03.2024 followed by a statutory demand notice dated 03.04.2024. The issue as to whether the statutory demand notice came to be served is a question of trial, as what would be suffice is a clear recital in the complaint regarding issuing of the statutory demand notice. The Hon'ble Apex Court in the case of Ajeet Seeds Ltd. Vs. K. Gopala Krishnaiah, (2014) 12 SCC 685, in paragraph- 10 and 11 has held as under: - "10. It is thus clear that Section 114 of the Evidence Act enables the Court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. Section 27 of the GC Act gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. It is not necessary to aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business.

11. Applying the above conclusions to the facts of this case, it must be held that the High Court clearly erred in quashing the complaint on the ground that there was no recital in the complaint that the notice under Section 138 of the NI Act was served upon the accused. The High Court also erred in quashing the complaint on the ground that there was no proof either that the notice was served or it was returned unserved/unclaimed. That is a matter of evidence. We must mention that in C.C. Alavi Haji, this Court did not deviate from the view taken in Vinod Shivappa, but reiterated the view expressed therein with certain clarification. We have already quoted the relevant paragraphs from Vinod Shivappa where this Court has held that service of notice is a matter of evidence and proof and it would be premature at the stage of issuance of process to move the High Court for quashing of the proceeding under Section 482 of the Cr.P.C. These observations are squarely attracted to the present case. The High Court?s reliance on an order passed by a two-Judge Bench in Shakti Travel & Tours is misplaced. The order in Shakti Travel & Tours does not give any idea about the factual matrix of that case. It does not advert to rival submissions. It cannot be said therefore that it lays down any law. In any case in C.C. Alavi Haji, to which we have made a reference, the three- Judge Bench has conclusively decided the issue. In our opinion, the judgment of the two-Judge Bench in Shakti Travel & Tours does not hold the field any more."

8. As regards the second submission of learned counsel for the applicant that the said cheque was a security cheque is concerned, the same is a subject matter of trial. In M/s Womb Laboratories Private Limited Vs. Vijay Ahuja & another, (2022) 18 SCC 631, the Hon'ble Apex Court had the occasion to consider the issue as to whether the determination can be done at the stage of summoning when the allegation that the cheque was a security cheque is concerned. The Hon'ble Apex Court has observed as under: - "In our opinion, the High Court has muddled the entire issue. The averment in the complaint does indicate that the signed cheques were handed over by the accused to the complainant. The cheques were given by way of security, is a matter of defence. Further, it was not for the discharge of any debt or any liability is also a matter of defence. The relevant facts to countenance the defence will have to be proved - that such security could not be treated as debt or other liability of the accused. That would be a triable issue. We say so because, handing over of the cheques by way of security per se would not extricate the accused from the discharge of liability arising from such cheques."

9. The aforesaid law has been followed subsequently in Sunil Todi and others vs. State of Gujarat, (2022) 16 SCC 762.

10. Further this Court in Application u/s 528 of BNSS No.8615 of 2025, Amarjeet Yadav vs. State of U.P. and another, has also decided the said issue.

11. Accordingly, interference is declined. The application is disposed of leaving it open to the applicant to contest the trial before the court below while taking all the legal and factual grounds and this Court has no reason to disbelieve that the court below shall consider the same in correct perspective. Order Date :- 4.8.2025 N.S.Rathour (Vikas Budhwar, J)