Section 138 notice validity and deemed service upheld where demand notice was dispatched within limitation to the correct address.

For Section 138 of the Negotiable Instruments Act, the limitation under proviso (b) runs from receipt of bank information of dishonour, and dispatch of the demand notice within fifteen days to the correct address satisfies the statutory requirement; deemed service applies unless rebutted. The notice here was dispatched within time and the accused failed to disprove service or incorrect addressing, so the earlier view rejecting notice validity was erroneous. On the liability issue, the cheque was found to have been issued towards rent liability, and the defence material did not show that no amount was due on the cheque date. The acquittal was set aside and conviction under Section 138 was upheld.

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Issues: (i) Whether the demand notice issued under proviso (b) to Section 138 of the Negotiable Instruments Act, 1881 was within limitation and validly served; (ii) Whether the cheque was issued in discharge of a legally enforceable debt or liability.

Issue (i): Whether the demand notice issued under proviso (b) to Section 138 of the Negotiable Instruments Act, 1881 was within limitation and validly served

Analysis: The notice requirement under proviso (b) is satisfied when the payee dispatches the demand notice within fifteen days of receipt of information from the bank regarding dishonour. Service is not confined to actual receipt, and where notice is sent by registered post to the correct address, the principle of deemed service applies. The evidence showed that information of dishonour was received in October 1993 and the notice was dispatched on 20.10.1993. The accused did not produce evidence to rebut service or show that the address was incorrect or that the signatures on the acknowledgment were not his.

Conclusion: The notice was held to be within limitation and duly served, and the trial court's contrary view was held to be erroneous.

Issue (ii): Whether the cheque was issued in discharge of a legally enforceable debt or liability

Analysis: The defence document relied upon to suggest absence of rent liability did not establish that no amount was due on the date of the cheque. The cheque was dated 11.10.1993, whereas the relied-upon document was much later. On the evidence, the Court found that the cheque was issued towards rent liability and the ingredients of the offence were made out.

Conclusion: The cheque was held to have been issued in discharge of liability, and the defence contention was rejected.

Final Conclusion: The acquittal was set aside and conviction under Section 138 of the Negotiable Instruments Act, 1881 was upheld, with sentence imposed by the Court.

Ratio Decidendi: For Section 138 of the Negotiable Instruments Act, 1881, the relevant limitation under proviso (b) runs from receipt of bank information about dishonour, and dispatch of notice to the correct address within that period satisfies the statutory requirement, with service capable of being presumed unless rebutted.

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