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C.C. Alavi Haji v. Palapetty Muhammed 2007 (7) SCALE 380

C.C. Alavi Haji v. Palapetty Muhammed 2007 (7) SCALE 380

FACTS-

  • In the present case, The complaint alleged that the complainant issued a lawyer's notice regarding the dishonour of a cheque and demanded payment on 4th August 2001.
  • The notice was returned on 10th August 2001 with a note stating that the accused was "out of station."
  • The case revolves around the service of notice under Clause (b) of the proviso to Section 138 of the Negotiable Instruments Act, 1881.
  • A two-Judge Bench referred the matter to this court (i.e.,three-Judge Bench )due to a perceived oversight in a previous decision (D. Vinod Shivappa v. Nanda Belliappa) regarding the presumption of an official act under Section 114 of the Indian Evidence Act, 1872.

ISSUE-

  • Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 have sufficiently complied with the requirement of Clause (b) of the proviso to Section 138 of the ACT,1881.

RULE-

  • The payee of the cheque must serve the notice at the correct address and if notice is served at the correct address it will be deemed that notice is duly served under S. 138 NI ACT.

HELD-

  • Sending notice by registered post to the correct address of the drawer fulfills the mandatory requirement of issuing notice under Section 138.
  • The presumption under Section 27 of the General Clauses Act applies when a notice is sent by registered post, and the burden of proof shifts to the addressee to rebut the presumption.
  • Also, Section 114 of the Indian Evidence Act allows courts to presume the existence of facts likely to have happened, considering the common course of business.
  • Failure to make necessary arrangements for payment within 15 days of receiving a summons along with the complaint bars the drawer from claiming improper service of notice.
  • In K. Bhaskaran v. Sankaran Vaidhyan Balan, Considering the question with particular reference to the scheme of Section 138 of the Act, it was held that failure on the part of the drawer to pay the amount should be within fifteen days “of the receipt” of the said notice. “Giving notice” in the context is not the same as receipt of notice.
  • Although the complaint didn't explicitly state that the notice was sent to the correct address of the drawer of the cheque via registered post acknowledgment due, the returned envelope, which was attached to the complaint, indicated that the notice was indeed sent by registered post acknowledgment due to the correct address and was returned with a note stating that the addressee was abroad
  • The complaint under Section 138 was sufficiently compliant with the requirements, and the decision of the High Court did not warrant interference. The appeal was dismissed accordingly, with no order as to costs.

COMMENTARIES RATIO/NOTE-

 

  • 19.208 Deemed service of notice

 

The issuance of notice was not challenged by the petitioner. It became deemed service of proper notice and created presumption of liability [ D.K. Saha v Debendra Dholkia,(2001) 1 BC 451 (Cal)].

Where a notice was sent by registered post and it was returned by postal authorities, it was held that this became a deemed service. A presumption arose under section 27 of the General Clauses Act, 1897 and section 114(e) of the Evidence Act, 1872.

 

The court read the relevant provisions viz., section 27 of the General Clauses Act and section 114(e) of Evidence Act again and again with a view to see whether what was the proper interpretation. The plain meaning of the above provisions is that service shall be deemed to be effected by (1) properly addressing; (2) pre-paying; and (3) posting by registered post. These are the 3 requirements for invoking section 27 of the General Clauses Act and nothing more. It is evident from the judgment under appeal that the only ground on which the respondent was acquitted was the ground of non-service of mandatory notice under section 138 of the NI Act and such a finding was set aside. Accordingly the order of acquittal on that ground was also set aside. However, the matter required reassessment of evidence by the Trial court [ Aparana Agencies v P. Sudhaka Rao].

 

A cognizance was not allowed to be faulted with merely by showing that AD from was not received back. Its non-receipt is not a token of non-service of notice [ Bhagyadhar Dash v State of Orissa, (2003) 3 BC 597 (Ori)].