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Wednesday, July 30, 2014

Sec.138 of N.I.Act - Sec.27 of General clauses Act and Sec.114 of Evidence Act - Presumption of service of Statutory Notice under sec.138 - when it was given to correct address - then there is no need to plead specifically that the accused managed and got return the notice un served in the pleadings of complaint - High court erred in quashing the complaint basing on Shakti Travel & Tours which does not hold the field any more. - Apex court held that 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, 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. and set aside the High court order= CRIMINAL APPEAL NO.1523 OF 2014 [Arising out of Special Leave Petition (Crl.)No.8783 of 2013] M/s. Ajeet Seeds Ltd. … Appellant Vs. K. Gopala Krishnaiah … Respondent = 2014 – July. Part – http://judis.nic.in/supremecourt/filename=41790

      Sec.138 of N.I.Act - Sec.27 of General clauses Act and Sec.114 of Evidence Act - Presumption of service of Statutory Notice under sec.138 - when it was given to correct address - then there is no need to plead specifically that the accused managed and got return the notice un served in the pleadings of complaint - High court erred in quashing the complaint basing on Shakti Travel & Tours which does not  hold  the field any more. - Apex court held that 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, 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. and set aside the High court order=

 High Court has quashed the complaint filed by him under Section 138  of  the
Negotiable Instruments Act, 1881 (‘the NI Act’) being SCC No. 4118  of  2007
in the court of Chief Judicial Magistrate, First Class, Aurangabad.=

Addt. Sessions Judge court
The  respondent-accused  filed   a   criminal
revision  application  before  the  Additional  Sessions  Judge,  Aurangabad
mainly on the assertion that the demand notice was not served on  him.   The
said criminal revision application was rejected.=
High court

  The High Court quashed the complaint on a short ground  that  on
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 was served or 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  order  of  this  Court  in  Shakti
Travel & Tours v. State of Bihar & Anr[1].  The extract on  which  the  High
Court relied upon could be quoted :

“2. The accused who is the appellant, assails the order 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  the  assertions
made in paragraph 8 of the complaint, it must be held that  notice  has  not
been served and, therefore, an application under Section 138 could not  have
been maintained.  Undoubtedly, the accused has a  right  to  pay  the  money
within 15 days from the date of 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 that the notice has been  served,
on  the  assertions  made  in  para  8,  the  complainant  itself   is   not
maintainable.  We accordingly quash the complaint.”=
Apex court 

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
Belliappa[3], this Court did not take note of Section 114  of  the  Evidence
Act in its proper perspective.

that it was not sufficient for 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  raising  a  presumption
under Section  114  of  the  Evidence  Act.  

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

“Whether in absence of any averments in the complaint  to  the  effect  that
the accused had a role to  play  in  the  matter  of  non-receipt  of  legal
notice; or that the accused deliberately  avoided  service  of  notice,  the
same could have been entertained keeping in view the decision of this  Court
in Vinod Shivappa’s case?” =

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  accused.
K.  Bhaskaran v.  Sankaran Vaidhyan Balan[4], 
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 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.
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. Hiralal  &  Ors.  (1996)  7
SCC 523 and V.Raja Kumari Vs. P.Subbarama Naidu & Anr. (2004) 8 SCC  74]
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.”

Apex court held that
  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 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 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.
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  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
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 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 Bench has conclusively  decided  the  issue.  
In  our  opinion,  the
judgment of the two-Judge Bench in Shakti Travel & Tours does not  hold  the
field any more.
In the circumstances, the impugned  judgment  is  set  aside  and  the
instant complaint is restored.  The appeal is allowed.

2014 – July. Part – http://judis.nic.in/supremecourt/filename=41790

RANJANA PRAKASH DESAI, N.V. RAMANA
                                                         REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                    CRIMINAL APPEAL NO.1523      OF 2014
        [Arising out of Special Leave Petition (Crl.)No.8783 of 2013]


M/s. Ajeet Seeds Ltd.             …          Appellant

Vs.

K. Gopala Krishnaiah              …          Respondent


                               J U D G M E N T


(SMT.) RANJANA PRAKASH DESAI, J.

1.    Leave granted.

2.    The appellant is the complainant.  He has challenged 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 has quashed the complaint filed by him under Section 138  of  the
Negotiable Instruments Act, 1881 (‘the NI Act’) being SCC No. 4118  of  2007
in the court of Chief Judicial 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  that  the  complaint
was filed alleging that the cheque  issued  by  the  respondent-accused  for
repayment of a legally  recoverable  debt  bounced.   On  17/6/2011  learned
Magistrate  issued  process.   The  respondent-accused  filed   a   criminal
revision  application  before  the  Additional  Sessions  Judge,  Aurangabad
mainly on the assertion that the demand notice was not served on  him.   The
said criminal revision application 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
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 was served or 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  order  of  this  Court  in  Shakti
Travel & Tours v. State of Bihar & Anr[1].  The extract on  which  the  High
Court relied upon could be quoted :

“2. The accused who is the appellant, assails the order 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  the  assertions
made in paragraph 8 of the complaint, it must be held that  notice  has  not
been served and, therefore, an application under Section 138 could not  have
been maintained.  Undoubtedly, the accused has a  right  to  pay  the  money
within 15 days from the date of 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 that the notice has been  served,
on  the  assertions  made  in  para  8,  the  complainant  itself   is   not
maintainable.  We accordingly quash the complaint.”


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  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  accused.
 The impugned order, therefore, deserves to be set aside.

5.    We are inclined to agree with the counsel for 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
Belliappa[3], this Court did not take note of Section 114  of  the  Evidence
Act in its proper 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  presumption  of  service  of
notice; that it was not sufficient for 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  raising  a  presumption
under Section  114  of  the  Evidence  Act.   The  following  question  was,
therefore, referred to the larger Bench for consideration.

“Whether in absence of any averments in the complaint  to  the  effect  that
the accused had a role to  play  in  the  matter  of  non-receipt  of  legal
notice; or that the accused deliberately  avoided  service  of  notice,  the
same could have been entertained keeping in view the decision of this  Court
in Vinod Shivappa’s case?”

7.    Dealing with the above question, this Court referred to  K.  Bhaskaran
v.  Sankaran Vaidhyan Balan[4], 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 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.    This 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 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  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  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 of 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
found 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  pre-mature
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 the service of notice has been  fraudulently  refused
by  unscrupulous 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
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 presume that the common course of  business  has
been followed in particular cases. When 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  Section  27  of
the G.C. Act is a far stronger presumption. Further, while  Section  114  of
Evidence 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:

“27. Meaning of service by post.- Where any Central 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’ 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 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 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 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. Hiralal  &  Ors.  (1996)  7
SCC 523 and V.Raja Kumari Vs. P.Subbarama Naidu & Anr. (2004) 8 SCC  74]  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 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 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 case, it  must  be
held that the High Court clearly erred in  quashing  the  complaint  on  the
ground that there was no recital 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  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
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 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 Bench has conclusively  decided  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.


                                                              ………………………………J.
                                                     (Ranjana Prakash Desai)



                                                              ………………………………J.
                                                               (N.V. Ramana)
New Delhi;
July 16, 2014.
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[1]    (2002) 9 SCC 415
[2]    (2007) 6 SCC 555
[3]    (2006) 6 SCC 456
[4]    (1999) 7 SCC 510

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