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2006(1) Bankmann 504
SUPREME COURT OF INDIA
Arijit Pasayat, C.K. Thakker, JJ.
V. Raja Kumari — Appellant
versus
P. Subarama Naidu & Anr. — Respondents
Crl. Appeal No. 887 of 1999
Decided on 2-11-2004
For the Appellant:Mr. G. Ramakrishna Prasad, Mr. Wasay Khan and Mr. S. Udaya Kumar Sagar, Advocates.
For the Respondents:Dr. Sunil Kumar, Mr. B. Vikas and Ms. D. Bharathi Reddy, Advocates.
IMPORTANT POINT
Where notice in terms of Section 138(b) of Negotiable Instruments Act was dispatched by post with correct address it would be deemed to have been served on sendee unless he proved that it was not really served and that he was not responsible for such service.
Headnote:Negotiable Instruments Act, 1881—Section 138—Prosecution for dishonour of cheque—Complaint averment that legal notice was returned with endorsement that door of house of accused was locked—Magistrate dismissed complaint taking a view that notice was not served upon accused and mere sending of notice by complainant to accused could not be taken into consideration—High Court set aside order in revision holding that question whether notice had been served or not was to be decided during trial—Appeal—There was assertion in complaint about incorrect endorsement regarding locking of house—Principle incorporated in Section 27 of General Clauses Act could be imported where sender had dispatched notice by post with correct address then it could be deemed to have been served on sendee unless he proved that it was not really served and he was not responsible for such non-service—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 among 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 the 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) profitably be imported in a case where the sender has dispatched 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 which is liable to pay the amount would resort to the strategy of subterfuge by successful 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 that 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 notice, the inference that is to be drawn has to be judged on the background facts of each case. (Para 19)
Result: Appeal dismissed.
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 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. Background 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 hearing 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 allowed 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 and Tourism Development Cor-poration Ltd.1 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 inquiring 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 and Tours v. State of Bihar and Anr.2, 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 instant case there is an assertion about incorrect endo
