TMI Blog2006 (5) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... B.P. SINGH, J. These seven appeals arise out of seven separate orders passed by a learned Single Judge of the Karnataka High Court on July 19, 2004 dismissing seven criminal petitions filed under Section 482 of the Code of Criminal Procedure for setting aside the orders of the JMFC Medikeri issuing process against the appellant on the complaints filed by the respondent under Section 138 of the Negotiable Instruments Act, 1881 (for short 'Act'). The facts of the cases are similar and the same question arises for consideration in each of the appeals. The only distinction is that whereas in Criminal Appeal Nos. 1256 and 1257 of 2004 the notices sent to the appellant were returned with the endorsement "addressee always absent during delivery time. Hence returned to sender", in the remaining five cases the notices were returned with the endorsement "party not in station. Arrival not known." The representative facts are taken from Criminal Appeal No. 1255 of 2004. The case of the complainant-respondent is that the appellant had issued a cheque in his favour for a sum of Rs.1,25,000/- on November 7, 2003. The cheque was presented to the bank for encashment but the same was ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce has been sent to the last known place of residence of accused. 10. Under the circumstances it is prayed that this Hon'ble Court be pleased to consider that the notice issued by the complainant as sufficient and it be deemed served." We do not agree with the counsel for the appellant that the complainant has admitted in the complaint that notice had not been served within the meaning of Section 138 of the Act. What has been stated in paragraph 8 of the complaint is the factum of the legal notice having been returned unserved on March 25, 2004 with an endorsement. This was a fact the complainant could not deny. But in paragraph 10 of the complaint the complainant has stated that notice may be deemed to have been served. The reasons for deeming service, are stated in the earlier paragraphs of the complaint. The question which, therefore, arises is whether in these circumstances the appellant could pray for quashing of the proceedings under Section 482 of the Code of Criminal Procedure. Under Section 138 of the Act, where a cheque issued by the drawer in the discharge of any debt or any other liability is returned by the bank unpaid, because the amount standing to the credit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r reason, it cannot be said to be deemed service of notice giving rise to a cause of action. He submitted, that apart from the seven notices in these seven cases, several other notices were issued to the appellant on the same address which he accepted, and where due, paid the amount also. He, therefore, submitted that the appellant has settled all those disputes where the claim of the respondent was justified, but he is not willing to pay the amount claimed by the respondent unjustifiably. It is a queer co-incidence that the appellant received all those notices where the demand was justified, and all the notices which could not be served upon him on account of his absence from his residence are those where the demand of the respondent is, according to the appellant, not justified. We need not make any further comment on this aspect of the matter. The question is whether in a case of this nature, where the postal endorsement shows that the notice could not be served on account of the non availability of the addressee, a cause of action may still arise for prosecution of the drawer of the cheque on the basis of deemed service of notice under clause (c) of proviso to Section 138 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eque 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 persons. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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. We may now consider some of the authorities cited at the Bar. In (1999) 7 SCC 510 : K. Bhaskaran vs. Sankaran Vaidhyan Balan and another, the drawee had presented a cheque issued by the drawer but the same was dishonoured. A notice was sent by registered post but the same was returned with the endorsement that the addressee was found absent on 3rd , 4th and 5th February, 1993 and intimation was served on addressee's house on 6th February, 2003. Thereafter the postal article remained unclaimed till 15th February, 1993 and it was returned to the sender with a further endorsement "unclaimed". The complaint filed by the drawee was dismissed on the ground of territorial jurisdiction as also on the ground that since the notice had not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 Court. The aforesaid decision is significant for two reasons. Firstly it was held that the principle incorporated in Section 27 of the General Clauses Act would apply in a case where the sender despatched the notice by post with the correct address written on it, but that 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. In (2001) 6 SCC 463 : Dalmia Cement (Bharat) Ltd. vs. Galaxy Traders Agencies Ltd. and others, the facts were that a cheque given by the respondent to the appellant was dishonoured on May 28, 1998 of which intimation was received by the appellant on June 2, 1998. On June 13, 1998 the appellant issued to the respondent and one 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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