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2014 (8) TMI 464 - SC - Companies LawProof of service of notice under Section 138 of the Negotiable Instruments Act 1881 - cheque bounced - Whether in absence of any averments in the complaint to the effect that the accused had a role to play in the matter of non-receipt of legal notice; or that the accused deliberately avoided service of notice the same could have been entertained keeping in view the decision of this Court in Vinod Shivappa 2006 (5) TMI 441 - SUPREME COURT - Held that - It is clear that Section 114 of the Evidence Act enables the Court to presume that in the common course of natural events the communication would have been delivered at the address of the addressee. Section 27 of the GC Act gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. It is not necessary to 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. Unless and until the contrary is proved by the addressee service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. High Court clearly erred in quashing the complaint on the ground that there was no recital in the complaint that the notice under Section 138 of the NI Act was served upon the accused. The High Court also erred in quashing the complaint on the ground that there was no proof either that the notice was served or it was returned unserved/unclaimed. That is a matter of evidence - service of notice is a matter of evidence and proof and it would be premature at the stage of issuance of process to move the High Court for quashing of the proceeding under Section 482 of the Cr.P.C - Decided in favour of appellants.
Issues:
Challenge to quashing of complaint under Section 138 of the Negotiable Instruments Act by High Court based on lack of proof of notice service. Analysis: The appellant challenged the High Court's decision to quash the complaint under Section 138 of the Negotiable Instruments Act due to lack of proof of notice service. The High Court relied on a previous order in Shakti Travel & Tours case, emphasizing the need for proof of notice service for a cause of action. However, the appellant argued citing C.C. Alavi Haji case that it is not mandatory to aver in the complaint about notice service. The Supreme Court agreed with the appellant, highlighting the need to consider Section 114 of the Evidence Act and Section 27 of the General Clauses Act in determining notice service. In the C.C. Alavi Haji case, a three-Judge Bench clarified the issue referred by a two-Judge Bench regarding the presumption of service of notice under Section 138 of the NI Act. The Court emphasized that the presumption of service arises when a notice is sent to the correct address by registered post, as per Section 27 of the GC Act. It was reiterated that the complainant need not specifically aver in the complaint about notice service, as the presumption applies unless the addressee proves otherwise. The Court emphasized the importance of evidence and proof in establishing notice service, rather than relying solely on the complaint's recitals. The Supreme Court further explained the nature of presumptions under Section 114 of the Evidence Act and Section 27 of the GC Act, highlighting their significance in determining notice service under Section 138 of the NI Act. The Court emphasized that the presumption of service is deemed to have occurred unless the addressee proves otherwise, as per Section 27. The judgment in C.C. Alavi Haji was upheld, emphasizing that notice service is a matter of evidence and proof, and premature quashing of proceedings under Section 482 of the Cr.P.C. is unwarranted. The Court clarified that the reliance on the Shakti Travel & Tours order by the High Court was misplaced, as the three-Judge Bench decision in C.C. Alavi Haji conclusively settled the issue. In conclusion, the Supreme Court set aside the High Court's judgment and restored the complaint, emphasizing the importance of evidence and the presumption of service under Section 27 of the GC Act in cases involving notice service under Section 138 of the NI Act. The appeal was allowed in favor of the appellant.
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