2021 (4) TMI 740 - HC - Indian Laws

Dishonor of Cheque - service of notice - legal notice sent, returned as claimed - acquittal of accused - rebuttal of presumption - HELD THAT - The postal cover sent through RPAD returned as not claimed does not mean due service of notice. Even during the course of cross-examination of P.W.1, nothing has been elicited regarding service of notice. When the appellant-complainant has not sent the legal notice to the respondent-accused under certificate of posting, there is no presumption of due service of notice to the respondent-accused. It is pertinent to note that the respondent-accused has not placed rebuttal evidence to prove that the notice was not sent to the correct address and the respondent-accused was not working at the address shown in the envelope sent through legal notice. Ex.P-12 is the legal notice postal cover, the address shown in the said postal cover and the address shown in the cause title of the complaint are one and the same. The respondent-accused has not at all denied that he was working as Health Inspector at the City Municipality Council, Davanagere. When a sender has dispatched the notice through registered post with correct address written on it, Section 27 of General Clauses Act could be profitably imported and in such a situation service of notice deemed to have been effected on the sender unless he proves that it was really not served and he was not responsible for such non-service. In the present case, there is no rebuttal evidence to show that the complainant has deliberately and intentionally sent the legal notice to the wrong address and the accused was not working at the place and address shown in the registered envelope. The finding recorded by the Court below regarding service of notice through registered post holding that there is no proper service of notice is contrary to Section 138 of N.I. Act - the respondent-accused has failed to rebut the presumption by placing cogent and convincing evidence. Therefore, this Court is of the view that the findings recorded by the Court below cannot be sustained in law. Appeal allowed - decided in favor of appellant.

Issues Involved:
1. Whether the trial court was justified in acquitting the accused under Section 138 of the Negotiable Instruments Act.
2. Whether the legal notice was properly served to the respondent-accused as per the procedure prescribed under Section 94 of the Negotiable Instruments Act and the General Clauses Act.

Detailed Analysis:

Issue 1: Justification of Acquittal under Section 138 of the Negotiable Instruments Act

The trial court acquitted the respondent-accused for the offence punishable under Section 138 of the N.I. Act, despite finding that the respondent-accused had issued three cheques for ?50,000 each, which were dishonoured due to insufficient funds. The trial court based its acquittal on the observation that the appellant-complainant failed to issue a notice under Certificate of Posting (COP) in addition to the Registered Post with Acknowledgment Due (RPAD). The trial court concluded that there was no presumption of proper service of notice to the respondent-accused, leading to the dismissal of the complaint.

Issue 2: Proper Service of Legal Notice

The main contention revolves around whether the legal notice was properly served as required under Section 94 of the Negotiable Instruments Act and Section 27 of the General Clauses Act. The appellant-complainant argued that the trial court erred in dismissing the complaint based on the absence of COP, asserting that the legal notice sent through RPAD, which was returned as "unclaimed," should be considered proper service under Section 27 of the General Clauses Act.

Legal Principles and Precedents:

- Section 94 of the Negotiable Instruments Act: This section outlines the modes of giving notice of dishonour, including sending it by post to the correct address.

- Section 17 of the General Clauses Act: This section allows for the presumption of service of notice when sent to the correct address by registered post.

- Relevant Case Law: The appellant-complainant cited several decisions, including *Ajeet Seeds Ltd. vs. K.Gopala Krishnaiah* and *M.S.Srikara Rao vs. H.C.Prakash*, which support the presumption of service of notice when sent by registered post to the correct address.

Court's Analysis and Conclusion:

Upon reviewing the evidence, the court found that the trial court correctly determined that the respondent-accused had issued the cheques in question and that these cheques were dishonoured due to insufficient funds. The statutory notice of dishonour was duly issued, and the trial court correctly concluded that the appellant-complainant had the financial capacity to lend money.

However, the court disagreed with the trial court's finding regarding the service of notice. The court emphasized that when a notice is dispatched through registered post with the correct address, Section 27 of the General Clauses Act presumes effective service unless proven otherwise. The respondent-accused did not provide rebuttal evidence to show that the notice was sent to an incorrect address or that he was not working at the address shown.

The court held that the trial court's finding that there was no proper service of notice was contrary to the provisions of Section 138 of the N.I. Act and the General Clauses Act. The court concluded that the appellant-complainant had properly served the notice and that the respondent-accused failed to rebut the presumption of service.

Judgment:

1. Appeal Allowed: The appeal is allowed.
2. Acquittal Set Aside: The impugned judgment and order of acquittal dated 05.07.2011 passed in C.C.No.1575/2009 is set aside.
3. Conviction: The respondent-accused is convicted for the offence punishable under Section 138 of the N.I. Act.
4. Fine Imposed: The respondent-accused is directed to pay a fine of ?1,60,000. Out of this amount, ?10,000 shall be remitted to the State as a fine, and ?1,50,000 shall be paid to the appellant-complainant as compensation along with interest at the rate of 6% p.a. from the date of the complaint until the realization of the cheque amount.
5. Deadline for Payment: The amount shall be deposited within eight weeks from the date of this order. In case of default, the appellant may initiate proceedings.

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