IMPORTANT POINT
Where demand notice u/s 138 Negotiable Instruments Act was returned with endorsement "house locked" burden will be on complainant to show that accused managed to get incorrect postal endorsement made and infact it would be deemed service.

Headnote:Negotiable Instruments Act, 1881 -Section 138(b)(c)-Dishonour of cheque-Demand notice was returned with endorsement that door of house of accused was locked-Magistrate holding that service of notice on drawer was mandatory and mere sending of notice could not be considered to be sufficient, dismissed complaint-High Court in revision set aside order of dismissal of complaint taking a view that effect of non-service of notice when door of house of accused was closed will be considered during trial-Appeal -Point for consideration whether cause of action arose as notice sent by complainant to accused was returned with endorsement "house locked"-Context envisaged in Section 138 of the Act invited a liberal interpretation for person who had statutory obligation to give notice-Notice refused to be accepted by addressee could be presumed to have been served-Burden was on complainant to show that accused had managed to get incorrect postal endorsement made as alleged in complaint-High Court was justified in its view and no interference was called for.
       Held : On the part of the payee he has to make a demand by "giving a notice" in writing. If that was the only requirement to complete the offence on the failure of the drawer to pay the cheque amount within 15 days from the date of such "giving", the travails of the prosecution would have been very much lessened. But the legislature says that failure on the part of the drawer to pay the amount should be within 15 days "of the receipt" of the said notice. It is, therefore, clear that "giving notice" in the context is not the same as receipt of notice. Giving is a process of which receipt is the accomplishment. It is for the payee to perform the former process by sending the notice to the drawer at the correct address. (Para 8)
       No doubt Section 138 of the Act does not require that the notice should be given only by "post". Nonetheless the principle incorporated in Section 27 (quoted above) can profitably be imported in a case where the sender has despatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such non-service. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice. (Para 14)
       Burden is on the complainant to show that the accused has managed to get an incorrect postal endorsement made. What is the effect of it has to be considered during trial, as the statutory scheme unmistakably shows the burden is on the complainant to show the service of notice. Therefore, where material is brought to show that there was false endorsement about the non-availability of noticee, the inference that is to be drawn has to be judged on the background facts of each case. (Para 19)

JUDGMENT

Arijit Pasayat, J.-The appellant (hereinafter referred to as the accused ) calls in question legality of judgment rendered by learned Single Judge of the Andhra Pradesh High Court holding that the question whether notice as required under Section 138 of the Negotiable Instruments Act, 1881 (in short the Act ) has been served has to be decided during trial and the complaint ought not to be dismissed at the threshold on the purported ground that there was no proper service of notice.

2. Backgrounds facts in a nutshell are as follows:

Complaint was filed by respondent No.1 alleging commission of offence punishable under Section 138 read with Section 142 of the Act. It was alleged that cheque dated 30.6.1997 bearing No. SB/A/31 839579 for an amount of Rs. 80,000/- issued by the accused in discharge of the advance amount paid by the complainant in respect of the sale consideration was dishonoured by the drawee bank on account of insufficiency of funds. The complainant received this intimation on 2.8.1997. He got issued legal notice on 9.8.1997 through his advocate to the correct address of the accused. In the complaint, it is stated that the said legal notice was returned with an endorsement that the door of the house of the accused was locked. Subsequently, the amount was not paid by the accused. Hence, he filed the complaint. The learned Magistrate after going through the contents of the complaint recorded the sworn statement of the complainant. Taking into consideration of the contents of the sworn statement, he opined that under Section 138 of the Act, the service of notice on the person, whose cheque was dishonoured is mandatory and in the instant case the notice was not served on the accused and mere sending of notice by the complainant to the accused cannot be taken into consideration. Holding thus, he dismissed the complaint. The said order was assailed before the High Court. A revision petition in terms of Sections 397 and 401 of the Code of Criminal Procedure, 1973 (in short the Code ) was filed before High Court. The High Court by the impugned order held that the procedure followed by the Magistrate is not correct. The complainant complied with the requirement of law by sending registered legal notice. Non-service of notice is not a ground for rejecting the complaint, even before it is numbered. What is the effect of non-service of the notice when the door of the house of the accused was closed, will be considered after trial. Reference was made to a decision of the High Court in V. Satyanarayana v. A.P. Travel & Tourism Development Corporation Ltd. (1) (1997 (2) ALT (Crl.) 1 A.P.) where it was held that the complaint under Section 138 of the Act cannot be quashed or dismissed merely because the notice was not served on the accused or drawer, without enquiring into the circumstances leading to the non-service of notice.

3. In support of the appeal learned counsel for the appellant submitted that basic requirement for initiation of proceeding is service of notice. If the complaint itself does not show that notice has been served, it is to be thrown out at the threshold as was rightly done by the learned Magistrate and the High Court erroneously interfered with it.

4. Strong reliance was placed on Shakti Travel & Tours v. State of Bihar and Another (2002 (9) SCC 415), stating that when the complainant did not assert that demand notice has been served, the complaint was not maintainable.

5. Learned counsel for the respondent-complainant, on the other hand, submitted that the complaint clearly indicated that the accused managed to get an endorsement about the house been locked . This was clearly stated to be incorrect endorsement. Therefore, as rightly held by the High Court the effect of the endorsement has to be considered during trial.

6. The factual position in Shakti Travel (supra) as appears from the short order of this Court was different. There was no mention in the complaint about service of notice. In the ins

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2004 Supreme(SC) 1383

IMPORTANT POINTWhere demand notice u/s 138 Negotiable Instruments Act was returned with endorsement "house locked" burden will be on complainant to show that accused managed to get incorrect postal endorsement made and infact it would be deemed service.

Cases Referred (5)

IMPORTANT POINT
Where demand notice u/s 138 Negotiable Instruments Act was returned with endorsement "house locked" burden will be on complainant to show that accused managed to get incorrect postal endorsement made and infact it would be deemed service.