Key Points

• The appeal arises from a High Court order allowing a criminal revision, setting aside concurrent judgments convicting the first respondent under Section 138 of the Negotiable Instruments Act, 1881 (N.I. Act), on grounds of non-compliance with proviso (b) to Section 138. [1000591600001] (!) (!)
• The first respondent borrowed Rs. 64,000/- from the appellant on 13-10-1990 and issued two cheques dated 13-10-1990 for Rs. 10,000/- and Rs. 25,000/- drawn on State Bank of India, Alappuzha Branch; another cheque for Rs. 29,000/- dated 08-10-1990 was also provided, drawn on State Bank of Travancore. [1000591600001][1000591600002]
• The appellant presented the two cheques dated 13-10-1990 on 04-04-1991; they were returned unpaid on 05-04-1991 with endorsement "Refer to drawer," and intimation was received by the appellant on 08-04-1991. [1000591600002]
• A legal notice was issued on 12-04-1991, returned on 20-04-1991 with endorsement "intimation served, addressee absent," received back by appellant's advocate on 25-04-1991; a second notice was sent on 04-05-1991, returned with endorsement "Refused, returned to sender." [1000591600003]
• The appellant filed a private complaint on 23-05-1991 under Section 138 of the N.I. Act; the Trial Court convicted and sentenced the first respondent to three months' simple imprisonment, confirmed by the Appellate Court. [1000591600004][1000591600005]
• The High Court allowed the revision, holding the notice of 04-05-1991 was beyond 15 days from bank intimation on 08-04-1991, thus non-compliant with proviso (b) to Section 138. [1000591600006][1000591600007]
• The issue is whether the first notice (issued within time to the correct address) satisfies proviso (b), or if the second notice (issued beyond 15 days) invalidates the complaint. [1000591600008]
• Section 138 deems an offence for dishonour of cheque due to insufficient funds, subject to provisos: (a) presentation within six months/validity period; (b) written demand notice within 15 days of bank information on dishonour; (c) non-payment within 15 days of notice receipt. (!) (!) (!) (!) (!) (!) (!) [1000591600009]
• The purpose of Section 138 is to punish dishonest cheque drawers evading liability; proviso (b) requires notice within 15 days of bank intimation, and proviso (c) gives 15 days post-notice for payment before offence is complete. [1000591600010][1000591600011]
• Under Section 27 of the General Clauses Act and Section 114 of the Evidence Act, service of notice sent by registered post to the correct address is presumed; the drawer may rebut this. [1000591600012]
• Statutory interpretation must harmonize with legislative object to effectuate intent. [1000591600013] (!)
• Notices returned with endorsements like "refused" or "addressee absent" presume due service. [1000591600014]
• The first notice of 12-04-1991 was within time and deemed served; the second notice of 04-05-1991 is merely a reminder, not an admission of non-service of the first, and there is no bar to sending a reminder notice. [1000591600015]
• The complaint filed on 23-05-1991 was within one month from the date of the first notice under Section 142, making it maintainable; Section 138 read with Section 142 is attracted. [1000591600015]
• The High Court judgment is set aside; the first respondent to deposit Rs. 2,00,000/- by 30-04-2017, with Rs. 1,30,000/- as compensation to appellant; failure restores conviction and sentence, cancelling bail. [1000591600015][1000591600016][1000591600017][1000591600018][1000591600019]