The High Court of Karnataka, exercising revisional jurisdiction under Section 397 Cr.P.C. (Section 438 BNSS), partly allowed two criminal revision petitions challenging convictions under Section 138 of the Negotiable Instruments Act, 1881.
The complainant invested Rs.30 lakh in an LLP (accused No.1) based on representations by accused No.2 and 3. When the LLP defaulted, accused No.2 issued three personal cheques (Ex.P.2 to P.4) which were dishonoured. The complainant sent an e-mail notice (Ex.D.1) on 26.05.2016 demanding repayment within 15 days, followed by a formal legal notice (Ex.P.8) on 11.06.2016 specifying cheque numbers, amounts, dates and dishonour details.
The court held:
1. The e-mail (Ex.D.1) did not mention cheque numbers, amounts or dishonour dates and therefore was not a valid statutory notice under Section 138 NI Act. A defective notice does not trigger limitation; the complainant was entitled to cure it by issuing a proper notice (Ex.P.8). Reliance was placed on Raghuvir Goswami v. Nirmal Thakur and Nityanand v. Jamuna Prakash.
2. Ex.P.8 specified the three cheque amounts (Rs.11,94,300; Rs.12,08,600; Rs.12,23,900) separately at paragraph 7-8 and demanded the total cheque amount of Rs.36,26,800 at paragraph 11, with interest and notice charges mentioned distinctly. It was therefore not an omnibus notice. The principles from Suman Sethi v. Ajay K and Kaveri Plastics v. Mahadadu Bhava Behruddin Nuru were applied.
3. The cheques were issued by accused No.2 in his individual capacity, drawn on his personal account, and signed by him alone. Accused No.2 was not a partner of the LLP (accused No.1) as established by official documents (Ex.D.2 to D.4). Accused No.3 had not signed the cheques. Section 141 NI Act applies only to companies, firms or associations of individuals; it cannot be invoked against individuals who are merely jointly liable. The Supreme Court's decision in Alka Khandu Avhad v. Amar Syamprasad Mishra was directly on point: a husband and wife are not an "association of individuals" under Section 141. The decisions in Anil Sachar and Don Ayengia were distinguished as they involved the same person being a director/partner in both the cheque-issuing entity and the beneficiary entity.
4. The trial court and appellate court failed to examine the documentary evidence showing accused No.2 was not a partner of the LLP and that the cheques were issued in his individual capacity. Their conviction of accused No.1 and 3 under Section 141 was perverse and required interference.
Disposition: CRL.RP No.558/2026 (filed by accused No.3) allowed in part; CRL.RP No.565/2026 (filed by accused No.2) dismissed. The conviction and sentence against accused No.2 confirmed; convictions against accused No.1 and 3 set aside.
