C.C. Alavi Haji v. Palapetty Muhammed
Supreme Court of India, 18 May 2007, 3 judges
A Section 138 notice sent by registered post to the drawer's correct address is presumed served under Section 27 of the General Clauses Act; the complaint need not further allege that the drawer evaded service.
Facts
A two-Judge Bench referred to a three-Judge Bench the question whether a complaint under Section 138 of the Negotiable Instruments Act could be entertained without averments that the accused had a role in the non-receipt of the legal notice or had deliberately avoided it, given the earlier decision in Vinod Shivappa and the presumption under Section 114 of the Evidence Act. In the case before the Court, the complaint stated that the lawyer's notice demanding payment, sent on 4.8.2001, was returned on 10.8.2001 with the remark that the accused was out of station. The returned envelope, annexed to the complaint, showed that it was sent by registered post acknowledgement due to the correct address.
Questions before the Court
- Must a complaint under Section 138 of the Negotiable Instruments Act aver that the accused deliberately avoided service of the statutory notice, or had a role in its non-receipt, when the notice sent by registered post is returned unserved?
- How do Section 27 of the General Clauses Act and Section 114 of the Evidence Act apply to service of the notice under clause (b) of the proviso to Section 138?
What the Court held
- Giving notice to the drawer under clause (b) of the proviso to Section 138 is a mandatory precondition. When the notice is sent by registered post to the drawer's correct address, that requirement is complied with, and Section 27 of the General Clauses Act raises a presumption of service.
- Because of that presumption, the complaint need not aver that the drawer evaded service or had a role in the return of the notice unserved. It must, however, contain the basic facts on the mode and manner of issuing the notice. The drawer may rebut the presumption by showing, for example, a wrong address or no tender.
- A drawer who claims non-receipt may pay the cheque amount within 15 days of receiving the summons with a copy of the complaint. One who does not pay then cannot contend that the notice was not properly served.
- The returned envelope annexed to the complaint showed dispatch by registered post to the correct address, so Section 138 was sufficiently complied with. The Court reiterated K. Bhaskaran and Vinod Shivappa with this clarification and dismissed the appeal.
Why it matters
The judgment settles, on a reference, how service of the statutory notice under Section 138 of the Negotiable Instruments Act is proved. It applies the presumption in Section 27 of the General Clauses Act to a notice sent by registered post to the correct address, removes any need to plead evasion in the complaint, and allows a drawer who denies receiving the notice to pay within 15 days of the summons.
In the Court's words
Copied from the official judgment; each passage links to its page.
“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.”
“In our opinion, therefore, when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. It is needless to emphasise that the complaint must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the cheque.”
“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 in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected.”
Provisions interpreted
- Section 138, Negotiable Instruments Act, 1881
- Section 27, General Clauses Act, 1897
- Section 114, Indian Evidence Act, 1872Now: BSA 119 (NCRB correspondence table)
Case and bench
- Parties
- C.C. Alavi Haji v. Palapetty Muhammed
- Case
- Criminal Appeal No. 767 of 2007 (arising out of S.L.P. (Criminal) No. 3910 of 2006)
- Decided
- 18 May 2007
- Bench
- K.G. Balakrishnan (CJI), R.V. Raveendran, D.K. Jain
- Opinions
- Unanimous. Judgment delivered by D.K. Jain, J.
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