Case: D. Vinod Shivappa Vs. Nanda Belliappa

of its partners the statutory notice under Section 138 of Act and received the postal acknowledgement of the notice on June 15, 1998 which was the last date of limitation on the basis of the said notice. However, the appellant again presented the cheque on July 1, 1998 which was again dishonoured on July 2, 1998. The appellant sent a second notice of dishonour of the cheque but the respondent having received the notice on July 27, 1998 did not make the payment. On September 9, 1998 the appellant filed a complaint. The respondent moved a petition before the High Court for quashing of the complaint under Section 482 of the Code of Criminal Procedure on the ground that it was time barred since acknowledgement of the first notice was received by the complainant on June 15, 1998 and the complaint was filed after July 15, 1998. The appellant on the other hand contended that the respondents having denied receipt of the first notice, the only course open to the appellant was to present the cheque again. The High Court quashed the complaint as time barred. This Court allowed the appeal of the appellant after considering the authorities cited at the bar and observed: - Section 27 of the General Clauses Act deals with the presumption of service of a letter sent by post. The despatcher of a notice has, therefore, a right to insist upon and claim the benefit of such a presumption. But as the presumption is rebuttable one, he has two options before him. One is to concede to the stand of the sendee that as a matter of fact he did not receive the notice, and the other is to contest the sendees stand and take the risk for proving that he in fact received the notice. It is open to the despatcher to adopt either of the options. If he opts the former, he can afford to take appropriate steps for the effective service of notice upon the addressee. Such a course appears to have been adopted by the appellant-company in this case and the complaint filed, admittedly, within limitation from the date of the notice of service conceded to have been served upon the respondents. 21. This Court also held that though the payee may successively re-present a dischonoured cheque but once a notice under Section 138 of the Act was received by the drawer of the cheque, the payee or the holder of the cheque forfeits his right to again present the cheque, since the cause of action had accrued when there was failure to pay the amount within the prescribed period. 22. Counsel for the appellant relied on paragraph 6 of the report wherein it was observed that it is not the giving of the notice but it is the failure to pay after receipt of the notice by the drawer which gives the cause of action to the complainant to file the complaint within the statutory period. It is no doubt true that the receipt of the notice has to be proved, but as held by this Court consistently, refusal of notice amounts to service of notice. Similarly in a case where notice is not claimed even though sent by registered post, with the aid of Section 27 of the General Clauses Act, the drawer of the cheque may be called upon to rebut the presumption which arises in favour of service of notice. 23. In (2004) 8 SCC 774 : V. Raja Kumari vs. P. Subbarama Naidu and another, dealing with a case where the notice could not be served on account of the fact that the door of the house of the drawer was found locked, this Court held that the principle incorporated in Section 27 of the General Clauses Act will apply to a notice sent by post, and it would be for the drawer to prove that it was not really served and that he was not responsible for such non-service. This Court reiterated the principle laid down in K. Bhaskaran vs. Sankaran Vaidhyan Balan and another case (supra). This Court while dismissing the appeal concluded: - 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 notice, the inference that is to be drawn has to be judged on the background facts of each case. 24. In (2005) 4 SCC 417 : Prem Chand Vijay Kuamr vs. Yashpal Singh and another, the Court relied upon the principle laid down in (1998) 6 SCC 514 : Sadanandan Bhadran vs. Madhavan Sunil Kumar which was followed in Dalmia Cement (Bharat) Ltd. vs. Galaxy Traders & Agencies Ltd. and others (supra). 25. None of the decisions considered above take a view different from the view we have taken. The question as to whether there was deemed service of notice, in the sense that the endorsement made on the returned envelope was a manipulated and false endorsement, is essentially a question of fact, and that must be considered in the light of the evidence on record. The High Court was thus right in rejecting the petitions filed by the appellant under Section 482 of the Code of Criminal Procedure. 26. Learned counsel for the appellant submitted that there may be unscrupulous complainants, who may manage to get a false postal endorsement of refusal or unclaimed or party not available and then prosecute an innocent or bona fide drawer. We do not think that the drawer is without remedy. He can also establish by evidence that said endorsement of refusal or unclaimed or not found during delivery time to be false. Alternatively, he may pay the amount due and compound the matter. Be that it may.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]12. Section 138 of the Act was enacted to punish those unscrupulous persons who purported to discharge their liability by issuing cheques without really intending to do so, which was demonstrated by the fact that there was no sufficient balance in the account to discharge the liability. Apart from civil liability, a criminal liability was imposed on such unscrupulous drawers of cheques. The prosecution, however, was made subject to certain conditions. With a view to avoid unnecessary prosecution of an honest drawer of a cheque, or to give an opportunity to the drawer to make amends, the proviso to Section 138 provides that after dis-honour of the cheque, the payee or the holder of the cheque in due course must give a written notice to the drawer to make good the payment. The drawer is given 15 days time from date of receipt of notice to make the payment, and only if he fails to make the payment he may be prosecuted. The object which the proviso seeks to achieve is quite obvious. It may be that on account of mistake of the bank, a cheque may be returned despite the fact that there is sufficient balance in the account from which the amount is to be paid. In such a case if the drawer of the cheque is prosecuted without notice, it would result in great in-justice and hardship to an honest drawer. One can also conceive of cases where a well intentioned drawer may have inadvertently missed to make necessary arrangements for reasons beyond his control, even though he genuinely intended to honour the cheque drawn by him13. The law treats such lapses induced by inadvertence or negligence to be pardonable, provided the drawer after notice makes amends and pays the amount within the prescribed period. It is for this reason that clause (c) of proviso to Section 138 provides that the section shall not apply unless the drawer of the cheque fails to make the payment within 15 days of the receipt of the said notice. To repeat, the proviso is meant to protect honest drawers whose cheques may have been dishonoured for the fault of others, or who may have genuinely wanted to fulfil their promise but on account of inadvertence or negligence failed to make necessary arrangements for the payment of the cheque. The proviso is not meant to protect unscrupulous drawers who never intended to honour the cheques issued by them, it being a part of their modus operandi to cheat unsuspecting persons14. If a notice is issued and served upon the drawer of the cheque, no controversy arises. Similarly if the notice is refused by the addressee, it may be presumed to have been served. This is also not disputed. This leaves us with the third situation where the notice could not be served on the addressee for one or the other reason, such as his non availability at the time of delivery, or premises remaining locked on account of his having gone elsewhere etc. etc. If in each such case the law is understood to mean that there has been no service of notice, it would completely defeat the very purpose of the Act. It would then be very easy for an unscrupulous and dishonest drawer of a cheque to make himself scarce for sometime after issuing the cheque so that the requisite statutory notice can never be served upon him and consequently he can never be prosecuted. There is good authority to support the proposition that once the complainant, the payee of the cheque, issues notice to the drawer of the cheque, the cause of action to file a complaint arises on the expiry of the period prescribed for payment by the drawer of the cheque. If he does not file a complaint within one month of the date on which the cause of action arises under clause (c) of the proviso to Section 138 of the Act, his complaint gets barred by time. Thus, a person who can dodge the postman for about a month or two, or a person who can get a fake endorsement made regarding his non availability can successfully avoid his prosecution because the payee is bound to issue notice to him within a period of 30 days from the date of receipt of information from the bank regarding the return of the cheque as unpaid. He is, therefore, bound to issue the legal notice which may be returned with an endorsement that the addressee is not available on the given address18. This Court noticed the position well settled in law that the notice refused to be accepted by the drawer can be presumed to have been served on him. In that case the notice was returned as unclaimed and not as refused. The Court posed the question Will there be any significant difference between the two so far as the presumption of service is concerned? Their Lordships referred to Section 27 of the General Clauses Act and observed that the principle incorporated therein could profitably be imported in a case where the sender had 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. This Court dismissed the appeal preferred by the drawer holding that where the notice is returned by the addressee as unclaimed such date of return to the sender would be the commencing date in reckoning the period of 15 days contemplated in clause (c) to the proviso of Section 138 of the Act. This would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to his address. Since the appellant did not attempt to discharge the burden to rebut the aforesaid presumption, the appeal was dismissed by this Court25. None of the decisions considered above take a view different from the view we have taken. The question as to whether there was deemed service of notice, in the sense that the endorsement made on the returned envelope was a manipulated and false endorsement, is essentially a question of fact, and that must be considered in the light of the evidence on record. The High Court was thus right in rejecting the petitions filed by the appellant under Section 482 of the Code of Criminal Procedure