Cheque dishonour liability upheld where registered-post notice was deemed served and statutory presumptions were not rebutted.

Registered-post notice sent to the correct address was deemed served under Section 27 of the General Clauses Act when the postal article was returned with intimation and non-claim, and a bare denial did not rebut service. Once execution of the cheques was proved, the statutory presumptions under Sections 118(b) and 139 of the Negotiable Instruments Act operated in favour of the complainant. The defence that the cheques were only security cheques was unsupported, and the accused failed to rebut liability on a preponderance of probabilities. The conviction under Section 138 was sustained and the connected acquittal was set aside.

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Issues: (i) Whether the statutory notice of demand was duly served on the accused by registered post at the correct address so as to satisfy the requirement of Section 138 of the Negotiable Instruments Act, 1881. (ii) Whether the complainant had proved that the cheques were issued in discharge of a legally enforceable liability and whether the presumption under the Negotiable Instruments Act was rebutted.

Issue (i): Whether the statutory notice of demand was duly served on the accused by registered post at the correct address so as to satisfy the requirement of Section 138 of the Negotiable Instruments Act, 1881.

Analysis: The notice was sent by registered post to the accused at the address disclosed in the record and the postal article was returned with endorsements showing intimation and non-claim. The address was sufficiently identified by the surrounding facts, including the accused's own admitted residence in the same ward and service of court summons at the same locality. In such circumstances, the presumption under Section 27 of the General Clauses Act, 1897 applied, and mere denial or a bare suggestion was insufficient to rebut it.

Conclusion: The notice was deemed to have been duly served on the accused.

Issue (ii): Whether the complainant had proved that the cheques were issued in discharge of a legally enforceable liability and whether the presumption under the Negotiable Instruments Act was rebutted.

Analysis: Once execution of the cheques was established, the statutory presumptions under Sections 118(b) and 139 of the Negotiable Instruments Act, 1881 operated in favour of the complainant. The complainant's evidence sufficiently showed advancement of money and issuance of the cheques in repayment. The defence that the cheques were merely security cheques was not substantiated by evidence. The accused did not enter the witness box and did not discharge the evidential burden required to rebut the presumptions on a preponderance of probabilities. Minor inconsistencies and absence of documentary support did not displace the presumption of liability.

Conclusion: The cheques were issued towards a legally enforceable debt and the presumption was not rebutted; conviction under Section 138 was sustained, while the acquittal in the connected matter was set aside.

Final Conclusion: The common judgment upheld criminal liability under the cheque dishonour provision in respect of the proved cheque, maintained the conviction, dismissed the revision, and reversed the acquittal in the connected appeal with consequential sentence.

Ratio Decidendi: Where a cheque is proved and the notice of demand is sent by registered post to the correct address, service may be deemed under Section 27 of the General Clauses Act, 1897, and the accused must rebut the presumptions under Sections 118(b) and 139 of the Negotiable Instruments Act, 1881 by evidence; mere denial is insufficient.

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