Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the Court can make payment of the cheque amount
The present matter namely, C.C. Alavi Haji vs. Palapetty Muhammed & Anr. [2007 137 comp Case 692(SC)], was in reference to the issuance of notice in terms of Section 138 of the Negotiable Instruments Act, 1881 (NI Act) vis-à-vis provisions pertaining to presumption about its service upon the drawer. The case further dealt with the issue as to what happens if after the service of summons of complaint, if filed, drawer makes the payment.
The present matter was in reference to the issuance of notice in terms of Section 138 of the Negotiable Instruments Act, 1881 (NI Act) vis-à-vis provisions pertaining to presumption about its service upon the drawer. The case further dealt with the issue as to what happens if after the service of summons of complaint, if filed, drawer makes the payment.
Service of notice upon the drawer of cheque prior to filing of complaint under Section 138 is a mandatory requirement. In a 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; it was observed that if in each such case, the law is understood to mean that there has been no service of notice. This would completely defeat the very purpose of the NI Act. It would then be very easy for an 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.
Once the notice is issued 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. If he does not file a complaint within one month of the date on which the cause of action arises 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 notice, which may be returned with an endorsement that the addressee is not available on the given address.
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. The court can presume that the common course of business has been followed in particular cases and accordingly where communications have been sent by post, the Court presumes that in the common course of natural events, the communication would have been delivered at the address of the addressee. The above presumption comes under Section 114 of the Indian Evidence Act, however, when such presumption as raised under Section 27 of the General Clauses Act is a much stronger presumption.
It is well settled that at the time of taking cognizance of the complaint under Section 138 of the Act, the Court is required to be prima facie satisfied all mandatory procedural requirements have been duly complied with and then it is for the drawer to rebut the presumption about the service of notice and show that:
– He had no knowledge about notice being brought to his address; or
– The address mentioned on the cover was incorrect; or
– The letter was never tendered; or
– The report of the postman was incorrect
The entire purpose of requiring a notice is to give an opportunity to the drawer to pay the cheque amount within the stipulated time period in order to free himself from the penal consequences of Section 138.
The judgment clarified that any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the Court for complaint filed under Section 138 of the NI Act, make payment of the cheque amount and make submission to this effect before the Court and accordingly the complaint is liable to be rejected. Where no payment is made under the above circumstances, such person cannot contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the General Clauses Act and Section 114 of the Evidence Act.
In the instant case, the complaint as was filed, had the envelope annexed therewith carrying a remark that the accused was out of station. There was no mention in the complaint that the notice was sent at the correct address of the drawer of the cheque by registered post acknowledgement due. But the returned envelope was annexed to the complaint which formed a part of the complaint showing that the notice was sent by registered post acknowledgement due to the correct address and was returned with an endorsement that the addressee was abroad. The requirements of Section 138 of the NI Act were held to have sufficiently complied with.