Shakti Travel & Tours v. State Of Bihar And Another

Factual and Procedural Background

The appellant (accused) faced a complaint under Section 138 of the Negotiable Instruments Act, 1881 (“NI Act”) for dishonour of a cheque. He filed an application before the High Court seeking quashing of that complaint. The High Court rejected the application. The appellant then approached the Supreme Court by way of the present appeal, which is decided through this order.

Legal Issues Presented

1. Whether a complaint under Section 138 of the NI Act is maintainable when the complaint itself admits that statutory notice of dishonour was not served on the accused.
2. Whether, in such circumstances, the High Court’s refusal to quash the complaint was legally sustainable.

Arguments of the Parties

Appellant's Arguments

• Paragraph 8 of the complaint expressly states that statutory notice had not been served on the accused.
• Service of notice is a condition precedent under Section 138; without such service, the complainant acquires no cause of action.
• Consequently, the complaint is inherently defective and liable to be quashed.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court affirmed the statutory scheme of Section 138 NI Act, emphasizing that:

• The accused must be given 15 days from the date of service of notice to make payment.
• Only upon failure to pay within that period does the complainant obtain the right to initiate proceedings.
• Since the complaint itself admits non-service of notice, an essential prerequisite for maintaining a Section 138 action is absent.

On this short point, the Court concluded that the complaint was not maintainable and that the High Court erred in refusing to quash it.

Holding and Implications

Appeal Allowed; Complaint Quashed.

The immediate consequence is that the complaint under Section 138 NI Act against the appellant stands quashed. The order does not set out any broader precedent beyond reaffirming the necessity of alleging and proving service of statutory notice before initiating proceedings under Section 138.