2007 (2) TMI 713 - SC - Indian Laws

Summary

Issues involved:
1. Whether service of notice u/s 138 of the Negotiable Instruments Act is mandatory.

The judgment dealt with the issue of whether service of notice in terms of the proviso (b) appended to Section 138 of the Negotiable Instruments Act, 1881 is mandatory. It was acknowledged that service of notice is an essential element of the offence. The complainant admitted that the notice could not be served on the petitioner and was returned unserved with an endorsement of the postal peon "Out of Station." The question arose as to whether the Court could take cognizance of the offence under Section 138 based on the averments in the complaint petition without alleging deliberate avoidance of service by the petitioner or wrongful postal endorsement.

The Court referred to a previous decision where it was highlighted that if the notice could not be served on the addressee due to reasons such as non-availability or locked premises, it should not be understood as no service. This was to prevent dishonest drawers from evading prosecution by avoiding notice. The Court emphasized that if the complainant can prove that the drawer deliberately evaded service and obtained a false endorsement to defeat the law, service of notice would be presumed. The Court stressed that this determination is based on evidence and proof, and premature quashing of proceedings under Section 482 of the Criminal Procedure Code should not be sought. The Court noted the importance of evidence in establishing the correctness of the endorsement and the addressee's deliberate avoidance of notice.

The judgment pointed out that the previous decision did not consider the presumption under Section 114 of the Evidence Act, which is a rebuttal presumption. It was emphasized that necessary averments must be made in the complaint petition to rebut such a presumption. The Court raised the question of whether, in the absence of averments implicating the accused in the endorsement matter, the case could proceed for trial under Section 138. It was concluded that a larger Bench should consider the matter, as even if no offence was apparent from the complaint petition, the accused should still be tried for the offence under Section 138.

In conclusion, the matter was referred to the Chief Justice of India for appropriate orders, highlighting the need for a larger Bench to address the complexities surrounding the mandatory service of notice under Section 138 of the Negotiable Instruments Act.