Recently, the Madhya Pradesh High Court held that a complaint under Section 138 of the Negotiable Instruments Act cannot be dismissed at the threshold merely for non-production of a postal track report, reaffirming that statutory presumptions of service must be respected. The Court underscored that procedural technicalities cannot override substantive justice, observing that such dismissals defeat the very object of cheque dishonour law.
Brief Facts:
The dispute arose from a financial transaction between two individuals known to each other, where the respondent had borrowed Rs.5 lakh and issued multiple cheques towards repayment. After repeated dishonour due to insufficient funds, a fresh cheque dated July 2020 was issued, which too bounced. The petitioner thereafter issued a statutory demand notice under Section 138 of the Negotiable Instruments Act on August 11, 2020, dispatched via registered post. Upon non-payment within the statutory period, a complaint was filed before the JMFC, Satna. However, the Magistrate dismissed the complaint as premature, citing absence of proof regarding the exact date of service of notice. This finding was upheld by the revisional court, leading to the present petition under Section 482 CrPC.
Contentions:
The counsel for the petitioner argued that once a notice is duly addressed, prepaid, and dispatched through registered post, a presumption of service arises under Section 27 of the General Clauses Act, 1897. It was contended that insisting on a track report was an overly technical approach, especially during the COVID-19 period when access to postal records was disrupted. The petitioner further submitted that the courts below misapplied precedents and erroneously imposed a rigid 30-day rule for presumption of service, which finds no basis in law.
On the other hand, the respondent’s counsel maintained that compliance with statutory requirements under Section 138 NI Act is mandatory. It was argued that proof of service of notice is a foundational requirement, and in the absence of acknowledgment or track report, the limitation period cannot be computed. Therefore, according to the respondent, the complaint was rightly dismissed as premature.
Observations of the Court:
The High Court undertook a detailed analysis of Section 27 of the General Clauses Act and relevant Supreme Court precedents, clarifying that once a notice is sent to the correct address by registered post, a legal presumption of service arises in the ordinary course of postal business. Rejecting the lower courts’ rigid approach, the Court categorically held that “non-production of the service report or track report by itself cannot be a ground to dismiss a complaint under Section 138… at the threshold.”
The Court further clarified that no fixed 30-day rule exists for presuming service, and such presumption depends on ordinary postal timelines. Importantly, it laid down practical guidelines, stating that service may ordinarily be presumed within 3–5 days for local dispatches, 5–7 days within the same state, and 7–10 days for inter-state delivery. The Court emphasized that the issue of actual service is evidentiary in nature and must be tested during trial, with the accused retaining the right to rebut the presumption.
The decision of the Court:
The High Court allowed the petition, set aside the orders of the Magistrate and Revisional Court, and restored the complaint for adjudication on merits, holding that statutory presumption of service cannot be defeated by mere absence of a tracking report and that technical objections should not obstruct the enforcement of cheque dishonour liability.
Case Title: Vinay Kumar Mishra Vs. Aditya Nayak
Case No.: MISC. Criminal Case No. 11427 of 2023
Coram: Hon'ble Mr. Justice Himanshu Joshi
Advocate for the Petitioner: Adv. Prateek Dubey
Advocate for the Respondent: Adv. Sudhakar Singh
Read Judgment @Latestlaws.com
