2006 Supreme(Del) 1279
High Court Of Delhi
A. K. Sikri
V.K.JAIN - Appellant
Versus
SHARAD JAGTIANI - Respondents
Crl. M. 2406 Of 2005
Decided On : 08/03/2006
B.S.SHUKLA, RAJIV CHANDOK, Rishi Agrawala, VIJAY AGARWAL
The mode of service for notice under Section 138 of the Negotiable Instruments Act is not prescribed, and service by UPC is considered a proper mode of service. The question of whether the notice was received by the petitioner is a matter of trial and cannot be determined at the pre-trial stage.
Headnote:
Negotiable Instruments Act - Complaint under Section 138 - Judgment refers to Section 138 of the Negotiable Instruments Act
Fact of the Case:
The respondent filed a complaint under Section 138 of the Negotiable Instruments Act, alleging that the accused failed to repay a loan advanced through a cheque, which was returned due to insufficient funds. The accused disputed the service of the legal notice and challenged the summoning order.
Finding of the Court:
The court held that the mode of service for notice under Section 138 is not prescribed and that service by UPC is a proper mode of service. The court also emphasized that the question of whether the notice was received by the petitioner is a matter of trial and cannot be determined at this stage.
Issues: Dispute over the service of legal notice and the summoning order under Section 138 of the Negotiable Instruments Act.
Ratio Decidendi: The court relied on the judgments of M/s. Prakash Jewellers v. M/s. A. K. Jewellers and other similar judgments, which held that notice under Section 138 can be served through Registered Post or UPC, and that the presumption of service arises if the notice is dispatched with the correct address of the drawer written on it.
Final Decision: The petition was dismissed, and the court emphasized that the disputed questions of facts cannot be determined in these proceedings, leaving it open for the petitioners to show that they did not receive the notice.
A. K. SIKRI, J.
( 1 ) THE respondent herein had filed a complaint under Section 138 of the Negotiable Instruments Act. According to the averments made in this complaint he had advanced a loan of Rs. 4. 75 lakh to the accused (petitioner herein ). For the repayment of the said loan, petitioner acting on behalf of petitioner company had issued a cheque No. 786356 dated 31. 7. 1998 drawn on the Bank of rajasthan Ltd. , Panchsheel Park, New Delh. This cheque was presented by the respondent for encashment. However, the same was returned back with memo dated 15. 1. 1999 of the Bank giving reasons "insufficient funds". Thereafter, notice by UPC was sent by the respondent to the petitioners and according to the respondent since payment was not made even thereafter, the aforesaid complaint was filed. As there is dispute about the service of notice, paras 6 and 7 of the complaint, touching this aspect, are reproduced below:
"6. That thereafter the complainant through his Counsel sent a legal notice dated 23. 1. 1999 through UPC to the accused persons calling upon them to pay the loan amount of the said cheque of Rs. 4,75,000/- (Rupees four lac and seventy thousand only) within fifteen days of the receipt of the notice. "
"7. That the accused persons failed to pay the loan amount within fifteen days of the receipt of legal notice. "
( 2 ) PRE-SUMMONING evidence was recorded and thereafter summoning orders dated 26. 4. 2000 have been issued by the learned MM observing that prima facie there appears to be sufficient material on record to summon the accused persons for having committed an offence punishable under Section 138 of the N.. Act. Against these orders, present petition is filed. As indicated above, the case of the petitioners is that petitioners never served with any such legal notice dated 23. 1. 1999 purported to have been sent by the respondent through UPC. It is the submission of learned Counsel forthe petitioners that notice was allegedly by UPC and in para 6 it is only stated that the notice was sent and there is no averment that this notice was ever received by the petitioners. He further submits that the petitioners had filed an application for recall of the summoning order and reply to this application was filed by the respondent and in the said reply the respondent had stated that there is a presumption that the notice sent under UPC was served on the accused persons. e. the petitioners. His submission is that from these averments also it would be clear that respondent is accepting that notice is not served upon the petitioners but is only drawing presumption of service. He contended that such a presumption cannot be drawn as, as per the provision of Section 27 of the General Clauses Act it is only when the notice is sent by Registered Post and not by UPC with such a presumption drawn. In support of this he relied upon judgment of Supreme Court in the case of Shiv Kumar and Others v. State of Haryana and Others, (1994) 4 scc 445. He, therefore, submitted that since it is not established that there was any service of notice even as per the complaint, summoning order could not have been issued as in the absence thereof no cause of action had arisen as held by Karnataka high Court in the case of Ramanna v. T. Jayaprakash, (1998) Vol. 92 Company cases 517. Learned Counsel for the respondent on the other hand submitted that section 138 of the N.. Act does not prescribe any specific mode of service. Therefore, service by UPC is also proper mode of service. He further submits that once confirmation is made in the complaint, the document is placed on record showing that notice was sent by UPC, presumption under Section 114 of the evidence Act would arise in favour of the sender of the notice. He also submits that ultimately the question as to whether notice was received by the petitioner or not is a question of fact which has to be determined on the basis of evidence before the trial Court and this Court should not exercise the d