High Court of Karnataka Quashes Complaint in Dishonour of Cheque Case Due to Lack of Proper Service of Demand Notice. Section 138 of Negotiable Instruments Act, 1881 requires that demand notice be served on the drawer within 30 days of dishonour; failure to prove service renders complaint not maintainable.

High Court: Karnataka High Court Bench: BENGALURU In Favour of Accused

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2026-05-18 16:17:30

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Case Note & Summary

The petitioners, Jai Agarwal and Anjana Agarwal, filed criminal petitions under Section 482 of the Code of Criminal Procedure, 1973 (read with Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023) seeking quashing of the complaint and proceedings in C.C. No. 9585/2023 (arising out of PCR No. 1439/2023) pending before the 36th Additional Chief Metropolitan Magistrate at Bangalore, for the alleged offence under Section 138 of the Negotiable Instruments Act, 1881. The respondent, Inflow Technologies Private Limited, had filed the complaint alleging that a cheque issued by the petitioners was dishonoured. The petitioners contended that the demand notice was not served on them within the statutory period of 30 days from the date of dishonour, and therefore the complaint was not maintainable. The court examined the records and found that the notice was sent but there was no proof of service on the petitioners. The court held that the requirement of service of notice under Section 138 of the Negotiable Instruments Act is mandatory and failure to prove service renders the complaint not maintainable. Consequently, the court allowed the petitions and quashed the complaint and all proceedings therein.

Headnote

A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Demand Notice - Service - The complaint under Section 138 of the Negotiable Instruments Act, 1881 was quashed as the demand notice was not served on the accused within the statutory period. The court held that the requirement of service of notice is mandatory and failure to prove service renders the complaint not maintainable. (Paras 1-10)

Issue of Consideration

Whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 is liable to be quashed for non-compliance with the statutory requirement of service of demand notice?

Final Decision

The petitions are allowed. The complaint and all proceedings in C.C. No. 9585/2023 (arising out of PCR No. 1439/2023) pending before the 36th Additional Chief Metropolitan Magistrate at Bangalore are quashed.

Law Points

Section 138 of Negotiable Instruments Act
1881
demand notice
service of notice
quashing of complaint
inherent powers under Section 482 CrPC

Case Details

NC: 2024:KHC:45265

CRL.P No. 9443 of 2024 C/W CRL.P No. 8100 of 2023, CRL.P No. 13150 of 2023, and CRL.P No. 8523 of 2024

2024-11-08

M. Nagaprasanna

NC: 2024:KHC:45265

Arun G. for petitioners, R. Kiran for respondent

Jai Agarwal and Anjana Agarwal

Inflow Technologies Private Limited

Nature of Litigation

Criminal petition under Section 482 CrPC seeking quashing of complaint under Section 138 of Negotiable Instruments Act, 1881.

Remedy Sought

Quashing of complaint and proceedings in C.C. No. 9585/2023 (PCR No. 1439/2023) for offence under Section 138 of NI Act.

Filing Reason

Alleged dishonour of cheque; petitioners contended that demand notice was not served on them within statutory period.

Issues

Whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 is liable to be quashed for non-compliance with the statutory requirement of service of demand notice?

Submissions/Arguments

Petitioners argued that the demand notice was not served on them within 30 days from the date of dishonour, making the complaint not maintainable. Respondent argued that the notice was sent and service was effected.

Ratio Decidendi

The requirement of service of demand notice under Section 138 of the Negotiable Instruments Act, 1881 is mandatory. Failure to prove service of notice within the statutory period renders the complaint not maintainable.

Judgment Excerpts

The requirement of service of notice under Section 138 of the Negotiable Instruments Act is mandatory and failure to prove service renders the complaint not maintainable.

Procedural History

The complaint was filed before the 36th Additional Chief Metropolitan Magistrate at Bangalore. The petitioners filed criminal petitions under Section 482 CrPC before the High Court of Karnataka seeking quashing of the complaint. The High Court allowed the petitions and quashed the complaint.