2006 (5) TMI 441 - SC - Indian Laws

Appeals Dismissed in Section 138 Case, Emphasizing Deemed Service and Prosecution Cause of Action

D. Vinod Shivappa Versus Nanda Belliappa

D. Vinod Shivappa Versus Nanda Belliappa - 2006 AIR 2179, 2006 (2) Suppl. SCR 1008, 2006 (6) SCC 456, 2006 (11) JT 187, 2006 (6) SCALE 277 Issues Involved:1. Service of Notice under Section 138 of the Negotiable Instruments Act.2. Cause of Action for Prosecution under Section 138.3. Interpretation and Application of Section 27 of the General Clauses Act.4. Jurisdiction of High Court under Section 482 of the Code of Criminal Procedure.Issue-wise Detailed Analysis:1. Service of Notice under Section 138 of the Negotiable Instruments Act:The primary contention was whether the notice issued by the complainant-respondent was deemed to have been served on the appellant when it was returned unserved with endorsements such as 'party not in station arrival not known.' The appellant argued that no cause of action arose due to the absence of actual service of notice, as required under Section 138 of the Act. The respondent, however, contended that the notice should be deemed served as it was sent to the appellant's correct address, which was previously used for other communications.2. Cause of Action for Prosecution under Section 138:The court examined whether the cause of action for prosecution under Section 138 arises only after the actual receipt of the notice by the drawer of the cheque. The appellant's counsel argued that the cause of action arises only if the drawer fails to make the payment within 15 days of the receipt of the notice. The court, however, held that if the notice is returned with an endorsement indicating non-availability, it could still give rise to a cause of action based on deemed service, provided the complainant can prove that the drawer deliberately avoided receiving the notice.3. Interpretation and Application of Section 27 of the General Clauses Act:The court referred to Section 27 of the General Clauses Act, which deals with the presumption of service of a letter sent by post. It was held that if the complainant sends the notice by registered post to the correct address, it can be deemed to have been served unless the drawer proves that it was not really served and that he was not responsible for such non-service. The court emphasized that the principle incorporated in Section 27 could be applied to cases under Section 138 of the Negotiable Instruments Act.4. Jurisdiction of High Court under Section 482 of the Code of Criminal Procedure:The appellant sought quashing of the proceedings under Section 482 of the Code of Criminal Procedure. The court held that the High Court should not exercise its jurisdiction under Section 482 to quash proceedings at the stage of issuance of process, especially when the question of deemed service of notice involves factual determinations that must be resolved through evidence at trial. The court noted that the question of whether the service of notice was fraudulently refused is a matter of evidence and proof, and thus, the High Court was correct in rejecting the petitions for quashing the proceedings.Conclusion:The court dismissed the appeals, directing the trial court to proceed with the complaint cases in accordance with law. It clarified that the decision should not be construed as an expression of opinion on the merits of the matters. The judgment emphasized that the drawer could establish by evidence that the postal endorsement was false or could pay the amount due and compound the matter.