[2014] 8 S.C.R. 880

MIS. AJEET SEEDS LTD. v.

K. GOPALA KRISHNAIAH (Criminal Appeal No.1523 of 2014)

JULY 16, 2014.

[RANJANA PRAKASH DESAI AND N.V. RAMANA, JJ.]

NEGOTIABLE INSTRUMENTS ACT, 1881:

c s. 138 - Complaint of dishonour of cheque - Service of notice u/s 138 and proof thereof - Held: It is not necessary to aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice - D Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business - High Court clearly erred in quashing the . complaint on the ground that there was no recital in the E . complaint that the notice uls 138 of the NI Act was served upon the accused - It also e"ed in quashing the complaint on the ground that there was no proof either that the notice was served or it was returned unserved/unclaimed - That is a matter of evidence - Section 114 of Evidence Act enables the court to presume that in the common course of natural F events, the communication would have been delivered at the address of the addressee - Section 27 of General Clauses Act gives rise to a presumption that service of notice has been effected when it is sent to the , correct address by registered post - Evidence Act, 1872 - f 114 - General Clauses Act, G 1897 - s.27. .

The complaint filed by the complainant against the respondent of offence u/s 138 of the Negotiable Instruments Act, 1881 was quashed by the High Court on H 880

AJEET SEEDS LTD. v. K. GOPALA KRISHNAIAH 881

A the petition u/s 482 Cr.P.C. filed by the respondent, on the grounds that there were no recitals in the complaint to demonstrate that the notice issued u/s 138 of the Act by the complainant was served upon the respondent~ accused on any specified date and that there was no proof that either the notice was served or it was returned 8

unserved/unclaimed and that there was no averment in the complaint about the same.

Allowing the appeal, the Court

HELD: 1.1. Section 114 of the Evidence Act enables c

the Court to presume that ir. the common course of natural events, the communication would have been delivered at the address of the addressee. Section 27 of the General Clauses Act gives rise to a presumption that 0 service of notice has been effected when it is sent to the correct addcess by registered post. It is not necessary to aver in. the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice.

Unless and until the contrary is proved by the addressee, E service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. [para 10] [888-E-G)

C. C. Alavi Haji v. Palapetty Muhammed & Anr. 2007 F

(7) SCR 326 = 2007 (6) SCC 555; D. Vinod Shivappa v.

Nanda Belliappa 2006 (2) Suppl. SCR 1008 = 2006

(6) SCC 456; and K. Bhaskaran v. Sankaran Vaidhyan , Ba/an 1999 (3) Suppl. SCR 271 = 1999 (7) SCC 510 - relied on

Shakti Travel & Tours v. State of Bihar & Anr. (2002) 9 sec 415 - held inapplicable.

1.2. In the facts of the instant case, the High Court clearly erred in quashing the complaint on the ground H

A that there was no recital in the complaint that the notice u/s 138 of the NI Act was served upon the accused. The High Court also erred in quashing the complaint on the ground that there was no proof either that the notice was served or it was returned unserved/unclaimed. That is a B matter of evidence. In the circumstances, the impugned judgment is set aside and the complaint restored.[para 11 and 13] [888-H; S89-A-B, F]

Case Law Reference :

(2902) 9 sec 415 held inapplicable para 3

2007 (7) SCR 326 relied on para 4

2006 (2) Suppl. SCR 1008 relied on para 6

199~ (3) Suppl. SCR 271 relied on para 7

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.1523 of 2014.

From the Judgment and Order dated 21.03.2013 in E Criminal Writ Petition No. 1131/2012 of the High Court of Bombay Bench at Aurangabad.

Sudhanshu S. Choudhari and Vaisalya Vigya for the Appellant.

F Amol Nirmalkumar Suryawanshi for the Respondent.

The Judgment of the Court was delivered by

(SMT.) RANJANA PRAKASH DESAI, J. 1. Leave G granted.

2. The appellant is the complainant. He has chanenged the judgment and order dated 21/03/2013 passed by the High Court of Judicature of Bombay, Bench at Aurangabad in Criminal Writ Petition No.1131 of 2012 whereby the High Court H has quashed the complaint filed by him under Section 138 of

the Negotiable Instruments Act, 1881 ('the NI Act') being SCC A No. 4118 of 2007 in the court of Chief Judic; ial Magistrate, First Class, Aurangabad.

3. For the purpose of disposal of this appeal, it is not necessary to narrate all the facts of the case. Suffice it to say 8 that the complaint was filed alleging that the cheque issued by the respondent-accused for repayment of a legally recoverable debt bounced. On 17 /612011 learned Magistrate issued process. The respondent-accused filed a criminal revision application before the Additional Sessions Judge, Aurangabad C mainly on the assertion that the demand notice was not served on him. The said criminal revision appllcation was rejected.

Being aggrieved by the said order, the respondent-accused filed criminal writ petition in the High Court under Section 482 of the Code of Criminal Procedure, 1973 ('the Cr.P.C.'). The High Court quashed the complaint on a short ground that on D reading -verification of the complaint dated 17/6/2011, it is explicit that there are no recitals to demonstrate that the notice issued under Section 138 of the NI Act by the complainant was served upon the respondent-accused on any specific date. The High Court observed that there is no proof that either the notice E was served O"r it was returned unserved/unclaimed and. that that there is no averment in the complaint about the same. The High Court concluded that, therefore, there could not be a cause of action to prosecute the accused under Section 138 of the NI Act. For coming to this conclusion, the High Court relied on the F order of this Court in Shakti Travel & rours v. State of Bihar & Anr1. The extract on which the High Court relied upon could be quoted:

"2. The accused who is the appellant, assails the order G of the High Court refusing to quash the complaint filed under Section 138 of the Negotiable Instruments Act.

The only ground on which the learned counsel for the appellant prays for quashing of the complaint is that on

(2002) sec 415.

A the assertions made in paragraph 8 of the complqint,' ft must be held that notice has not been served and, therefore, an application under Section 1.38 could not have been maintained. Undoubtedly, the accused has a right to pay the money within 15 days from the date of B the service of notice and only when it fails to pay, is it open for the complainant to file a case under Section 138 of the Negotiable Instruments Act. That being the position and in the complaint itself having not been mentioned tha( the notice has been served, on the c assertions made in para 8, the complainant'itse/f is not maintainable. We accordingly quash the complaint. D

4. We have heard, at some length, Mr. S.S. Choudhari, learned counsel appearing for the appellant. Counsel submitted that the High Court has erred in quashing the complaint on the D ground that complaint is silent about service of notice. Counsel

submitted that in C. C. Alavi Haji v. Palapetty Muhammed & Anr. 2, a three Judge Bench of this Court has conclusively decided this issue. It is held in this case that it is not necessary to aver. in the complaint that notice was served upon the E accused. The impugned order, therefore, deserves to be set aside.

5. We are inclined to agree with the counselJor the appellant.

, .

6. In .C..C. Alavi Haji, a three-Judge Bench of this Court was dealing with the question referred by a two-Judge Bench for consideration. The referring Bench was of the view that in D. Vinod Shivappa v. Nanda Bel/iappa3, this Court did not take note of Section 114 of the Evidence Act in its proper G perspective. It felt that presumption under Section 114 of the Evidence Act being a rebuttable presumption, the complainant should make certain necessary averments to raise the

2. c2001) 6 sec 555.

H 3. c2006) 6 sec 456.

presumption of service of notice; that it was not sufficient for a A complainant to state that a notice was sent by registered post and that the notice was returned with the endorsement 'out of station' and that there should be a further averment that the addressee-drawer had deliberately avoided receiving the notice or that the addressee had knowledge of the notice, for B raising a presumption under Section 114 of the Evidence Act.

The following question was, therefore, referred to the larger Bench for consideration.

7. Dealing with the above question, this Court referred to C K. Bhaskaran v. Sankaran Vaidhyan Balan4, where this Court referred to Section 27 of the General Clauses Act, 1897 ('the GC Act') and observed that since the NI Act does not require that notice should only be given by 'post' in a case where the sender has despatched the notice by post with correct address written on it, Section 27 of the GC Act could be profitably D imported and in such a situation service of notice is deemed to have been effected on the sender unless he proves that it was really not served and that he was not responsible for such non-service.

8. Thjs Court then referred to Vinod Shivappa's case, where the above aspects have been highlighted. This Court quoted the following paragraph from Vinod Shivappa with approval.

"15. We cannot also lose sight of the fact that the drawer F may by dubious means manage to get an incorrect endorsement made on the envelope that the premises has been found locked or that the addressee was not available at the time when postman went for delivery of the letter. It may be that the address is correct and even G the addressee is available but a wrong endorsement is manipulated by the addressee. In such a case, if the facts are proved, it may amount to refusal of the notice. If the

(1999) 1 sec s10.

complainant is able to prove that the drawer of the cheque knew about the notice and deliberately evaded. service and got a false endorsement made only to defeat the process bf law, the Court shall presume service of notice. This, however, is a matter of evidence and proof.

Thus even in a case where the notice is returned with the endorsement that the premises has always been foun~ locked or the addressee was not available at the time of postal delivery, it will be open to the complainant to prove at the trial by evidence that the endorsement is not correct and that the addressee, namely the drawer of the cheque, with knowledge of the notice had deliberately avoided to receive notice. Therefore, it would be premature at the stage of issuance of process, to move the High Court for quashing of the proceeding under Section 482 of the Code of Criminal Procedure. The question as to whether tl}e service of notice has been fraudulently refused by llrtSC/1.l{)_ulous means is a question of fact to be decided on the basis of evidence. In such a case the High Court ought not to exercise its jurisdiction under Section 482 of the Code of Criminal Procedure."

9. This Court then explained the nature of presumptions under Section 114 of the Evidence Act and under Section 27 of the GC Act and pointed out how these two presumptions are to be employed while considering the question of service of notice under Section 138 of the NI Act. The relevant paragraphs read as under:

"13. According to Section 114 of the Act, read with Illustration (f) thereunder, when it appears to the Court that the common course of business renders it probable that a thing would happen, the Court may draw presumption that the thing would have happened, unless there are circumstances in a particular case to show that the common course of business was not followed. Thus, Section 114 enables the Court to presume the existence

of any fact which it thinks likely to have happened, regard A being had to the common course of natural events, human conduct and public and private business in their relation to the facts of the particular case. Consequently, the court can presumf] that the common course of business has been followed in particular cases. When B applied to communications sent by post, Section 114 enables the Court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. But the presumption that is raised under Sectiorf 27 of the G. C. c Act is a far stronger presumption. Furthef; while Section

114 of Eviaence Act refers to a general presumption, Section 27 refers to a specific presumption. For the sake of ready reference, Section 27 of G. C. Act is extracted below: D

"27. Meaning of service by post.- Where any

Cntral Act or regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression 'serve' or either of the expressions 'give' E or 'send' or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless F the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post''.

14. Section 27 gives rise to a presumption that service G of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite H

of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business.

This Court has already held that when a notice is sent , by registered post and is returned with a postal endorsement 'refused' or 'not available in the house' or 'house locked' or 'shop closed' or 'addressee not in station', due service has to be presumed. [Vide Jagdish Singh Vs. Natthu Singh (1992) 1 SCC 647; State of M.P.

Vs. Hirata/ & Ors. (1996) 7 SCC 523 and V.Raja Kumari Vs. P. Subbarama Naidu & Anr. (2004) 8 SCC 7 4) It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved."

10. It is thus clear that Section 114 of the Evidence Act enables the Court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. Section 27 of the GC Act gives rise to a presumption that service of notice has been F effected when it is sent to the correct address by registered post. It is not necessary to aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the G addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business.

11. Applying the above conclusions to the facts of this H case, it must be held that the High Court clearly erred in

quashing the complaint on the ground that there was no recital A in the complaint that the notice under Section 138 of the NI Act was served upon the accused. The High Court also erred in quashing the complaint on the ground that there was no proof either that the notice was served or it was returned unserved/

unclaimed. That is a matter of evidence. We must mention that B in C. C. Alavi Haji, this Court did not deviate from the view taken in Vinod Shivappa, but reiterated the view expressed therein with certain clarification. We have already quoted the relevant

paragraphs from Vinod Shivappa where this Court has held that service of notice is a matter of evidence and proof and it C would be premature at the stage of issuance of process to move the High Court for quashing of the proceeding under Section 482 of the Cr.P.C. These observations are squarely attracted to the present case. The High Court's reliance on an order passed by a two-Judge Bench in Shakti Travel & Tours D is misplaced. The order in Shakti Travel & Tours does not give any idea about the factual matrix of that case. It does not advert to rival submissions. It cannot be said therefore that it lays down any law. In any case in C. C. Alavi Haji, to which we have made a reference, the three-Judge Benell has conclusively decided E the issue. In our opinion, the judgment of the two-Judge Bench in Shakti Travel & Tours does not hold the field any more.

13. In the circumstances, the impugned judgment is set aside and the instant complaint is restored. The appeal is allowed.

Rajendra Prasad Appeal allowed.