V.K. Jain vs Sharad Jagtiani
2006 Latest Caselaw 1266 Del

JUDGMENT

A.K. Sikri, J.

1. The respondent herein had filed a complaint under Section 138 of the Negotiable Instruments Act. According to the averments made in this complaint he had advanced a loan of Rs. 4.75 lakh to the accused (petitioner herein). For the repayment of the said loan, petitioner acting on behalf of petitioner company had issued a cheque No. 786356 dated 31.7.1998 drawn on the Bank of Rajasthan Ltd., Panchsheel Park, New Delhi. This cheque was presented by the respondent for encashment. However, the same was returned back with memo dated 15.1.1999 of the Bank giving reasons "insufficient funds". Thereafter, notice by U.P.C. was sent by the respondent to the petitioners and according to the respondent since payment was not made even thereafter, the aforesaid complaint was filed. As there is dispute about the service of notice, paras 6 and 7 of the complaint, touching this aspect, are reproduced below:

6. That thereafter the complainant through his Counsel sent a legal notice dated 23.1.1999 through U.P.C. to the accused persons calling upon them to pay the loan amount of the said cheque of Rs. 4,75,000/- (Rupees four lac and seventy five thousand only) within fifteen days of the receipt of the notice.

7. That the accused persons failed to pay the loan amount within fifteen days of the receipt of legal notice.

2. Pre-summoning evidence was recorded and thereafter summoning orders dated 26.4.2000 have been issued by the learned MM observing that prima facie there appears to be sufficient material on record to summon the accused persons for having committed an offence punishable under Section 138 of the N.I. Act. Against these orders, present petition is filed. As indicated above, the case of the petitioners is that petitioners never served with any such legal notice dated 23.1.1999 purported to have been sent by the respondent through U.P.C. It is the submission of learned Counsel for the petitioners that notice was allegedly by U.P.C. and in para 6 it is only stated that the notice was sent and there is no averment that this notice was ever received by the petitioneRs. He further submits that the petitioners had filed an application for recall of the summoning order and reply to this application was filed by the respondent and in the said reply the respondent had stated that there is a presumption that the notice sent under U.P.C. was served on the accused persons i.e. the petitioneRs. His submission is that from these averments also it would be clear that respondent is accepting that notice is not served upon the petitioners but is only drawing presumption of service. He contended that such a presumption cannot be drawn as, as per the provision of Section 27 of the General Clauses Act it is only when the notice is sent by Registered Post and not by U.P.C. with such a presumption drawn. In support of this he relied upon judgment of Supreme Court in the case of Shiv Kumar and Ors. v. State of Haryana and Ors. . He, therefore, submitted that since it is not established that there was any service of notice even as per the complaint, summoning order could not have been issued as in the absence thereof no cause of action had arisen as held by Karnataka High Court in the case of Ramanna v. T. Jayaprakash (1998)92 Company Cases 517. Learned Counsel for the respondent on the other hand submitted that Section 138 of the N.I. Act does not prescribe any specific mode of service. Therefore, service by U.P.C. is also proper mode of service. He further submits that once confirmation is made in the complaint, the document is placed on record showing that notice was sent by U.P.C, presumption under Section 114 of the Evidence Act would arise in favor of the sender of the notice. He also submits that ultimately the question as to whether notice was received by the petitioner or not is a question of fact which has to be determined on the basis of evidence before the Trial Court and this Court should not exercise the discretionary jurisdiction under Section 482 of the Code of Criminal Procedure. In support of aforesaid submission the respondent has relied upon following judgments:

(1) Prakash Jewellers v. A.K. Jewellers III(2002) B.C. 404 (D.B.) : 2002(2) J.C.C. 1171.

(2) Darbar Exports and Ors. v. Bank of India and Ors. II(2003) C.C.R. 1294-2003 (2) J.C.C. [NI] 132.

(3) Jain Associates and Ors. v. Deepak Chawdhary and Co. 1999(2) J.C.C. (Delhi) 383.

3. Since all these judgments raise same issue, it is not necessary to discuss all the judgments in detail. Our purpose would be served by referring to the judgment of Division Bench of this Court in the case of Parkash Jewellers v. A.K. Jewellers (supra), which being a judgment of Division Bench is binding on this Court. In the said case the Division Bench specifically opined that the notice under Section 138 can be served either through Registered Post or through U.P.C. It is also held that if notice is even dispatched by U.P.C. with correct address of the drawer written on it, presumption of the service of the said notice arises. Relevant discussion is contained in para 10 and 11 of the judgment which are reproduced below:

10. As it is, Section 138 does not prescribe any mode for giving of demand notice by the payee or holder of the cheque. But where such notice is served by post through registered post or postal certificate, etc. with the correct address of the drawer written on it, it would raise a presumption of service unless the drawer proves that it was not received by him in fact and that he was not responsible for such non-service. This is in tune with the principle embodied in Section 27 of the General Clauses Act or even Rule 19A of Order 5, C.P.C.

11. Section 27 of General Clauses Act deals with the presumption of service of notice, sent by post and provides that service of such notice shall be deemed to have been affected unless the contrary is proved. This principle is equally applicable to the service of notice for purpose of Section 138 of the Negotiable Instruments Act also. The same could be said about the provision of Rule 19A of Order 5, C.P.C. which requires a Court to make a declaration of summons having been duly served and dispatched through registered post notwithstanding that AD card had been lost or misplaced or not received back within 30 days for some other reason. The relevant proviso provides:

Provided that where the summons was properly addressed, prepaid and duly sent by registered post, acknowledgement due, the declaration referred to in this sub-rule shall be made notwithstanding the fact that the acknowledgement having been lost or mislaid, or for other reason, has not been received by the Court within thirty days from the date of issue of the summons.

4. To the same effect are the other judgments of this Court, note whereof is taken above.

5. In view of the aforesaid judgments of this Court with which I am bound, it is not a case to interfere with summoning order at this stage as disputed questions of facts cannot be gone into in these proceedings. Needless to mention, it would be open to the petitioners to show that they have not received any such notice. That is a matter of trial for which evidence is needed.

6. With these observations, this petition is dismissed.

7. Trial Court record be sent back.