Presumption of service and cheque liability under the Negotiable Instruments Act sustained where notice reached the shared residence.

Service of statutory notice under Section 138 of the Negotiable Instruments Act may be inferred when the notice is properly addressed, sent by post, and received at the shared residence by the drawer's wife; the presumption of service under Section 27 of the General Clauses Act is not displaced without proof of separate residence. Once cheque execution and dishonour are shown, the presumptions under Sections 118 and 139 operate in favour of the holder, and the accused must rebut them on a preponderance of probabilities. The note states that the accused failed to do so, so the objection on notice failed and the acquittal was reversed.

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Issues: (i) whether service of the statutory notice under Section 138 of the Negotiable Instruments Act, 1881 was sufficient when it was received by the drawer's wife at the shared residence; (ii) whether the presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881 stood rebutted on the ground that the complainant failed to establish financial capacity and the alleged cash loan transaction.

Issue (i): whether service of the statutory notice under Section 138 of the Negotiable Instruments Act, 1881 was sufficient when it was received by the drawer's wife at the shared residence.

Analysis: The notice requirement under Section 138 is satisfied by giving the notice to the drawer at the correct address, and Section 27 of the General Clauses Act, 1897 supports a presumption of service when a notice is properly addressed and sent by post. Receipt by the wife at the common residence was treated as sufficient, and the drawer did not establish that he and his wife were living separately so as to displace the presumption of service.

Conclusion: The statutory notice was held to be duly served, and the objection based on non-service failed.

Issue (ii): whether the presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881 stood rebutted on the ground that the complainant failed to establish financial capacity and the alleged cash loan transaction.

Analysis: Once execution of the cheque and the foundational facts of dishonour were shown, the presumptions under Sections 118 and 139 operated in favour of the holder. The Court held that the trial court attached undue significance to the alleged absence of documentary proof of source of funds and that the accused did not adduce sufficient material to rebut the statutory presumption on a preponderance of probabilities. The admitted signature on the cheque, the surrounding circumstances, and the evidence on record supported the existence of a legally enforceable liability.

Conclusion: The presumption under Sections 118 and 139 was not rebutted, and the finding of acquittal could not stand.

Final Conclusion: The acquittal was set aside, the cheque dishonour prosecution succeeded, and the appellant obtained reversal of the trial court's decision with consequential penal directions.

Ratio Decidendi: In a cheque dishonour prosecution, admission of signature and proof of dishonour activate the statutory presumptions under Sections 118 and 139, which can be displaced only by a probable defence on a preponderance of probabilities; service of notice may be inferred where it is properly dispatched to the correct address and received by the drawer's spouse at the shared residence.

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