2026 (2) TMI 509 - HC - Indian Laws

Non-production of postal proof in Section 138 complaint - acquittal set aside and case remanded to permit postal evidence and fresh trial

In prosecutions under the Negotiable Instruments Act for dishonour of cheque, issuance and service of a written demand notice by post is material to both ... Negotiable Instruments Act - Dishonour of cheques - Service of demand notice u/s 138 - presumption of service by registered post and deemed service - relevance of postal receipt and acknowledgment card to prove date of issuance and service for limitation - remand for production of additional evidence by appellant and opportunity to accused to rebut - HELD THAT:- The non-production of postal receipt /acknowledgment card by the appellant/complainant before the Magistrate Court found to be fatal by the learned Magistrate, while acquitting the accused. Indubitably, as regards issuance of demand notice under Section 138(b) of the N.I. Act is concerned, the requirement of law is, issuance of notice in writing in the correct address of the accused and serving of notice is not the requirement of law. In the decision in C.C. Alavi Haji v. Palappetty Muhammed and Another [2007 (5) TMI 335 - SUPREME COURT], the Apex Court dealt with presumption of service of notice and the refusal to accept the notice. Regarding presumption of service, the Apex Court held that when a notice is sent by registered post to the correct address of the drawer, it is deemed to be served under Section 27 of the General Clauses Act, 1897, and Section 114 of the Evidence Act. Regarding refusal to accept the notice, the Apex Court held that if the notice is returned with endorsements like “unclaimed” or “refused”, it would still considered as a valid notice and service of notice in the eye of the law. At the same time, service of notice either directly or in the form of deemed service is also relevant to complete the offence and to count the period of limitation for filing the complaint within the statutory period. Thus, the date of issuance of notice as well as the date of service of notice or deemed service of notice to be discernible from the postal receipt and acknowledgment card and in its absence, any other document or documents issued by the concerned Postal Authority in this regard have relevance, when considering prosecution alleging commission of offence punishable under Section 138 of the NI Act, to count the period to find out whether a notice was issued within the statutory period and also to count whether the complaint has been filed within the statutory period. Thus, non-production of the above documents would be fatal and the same would result in the acquittal of the accused. Therefore, the finding of the learned Magistrate in the instant case to be found as justifiable. Therefore, the judgment impugned is set aside and the matter is remanded back, for considering the case afresh, with an opportunity to the appellant/complainant to adduce further evidence including the production of documents. In the result, this appeal is allowed and the judgment under challenge is set aside. Issues: Whether the acquittal of the accused on the ground of non-production of postal receipt/acknowledgment card for the statutory demand notice under Section 138 of the Negotiable Instruments Act was justified, and whether the High Court should set aside the acquittal and remit the matter for fresh trial permitting production of those documents.Analysis: The requirement for prosecutions under Section 138 is that a demand notice in writing must be issued and service or deemed service is relevant both to completion of the offence and to computation of the limitation period. When a notice is sent by registered post to the correct address, service may be presumed under Section 27 of the General Clauses Act, 1897 and Section 114 of the Evidence Act; endorsements like 'unclaimed' or 'refused' have legal significance for deemed service. Postal receipts and acknowledgment cards, or equivalent postal authority records, are therefore relevant documents to establish issuance and service dates and to compute limitation. The trial court found non-production of these documents fatal and acquitted the accused. Certified postal records and acknowledgment card copies were later produced before this court in a connected matter, showing the documents exist and were not produced at trial.Conclusion: The acquittal on the sole ground of non-production of postal receipt/acknowledgment card is legally sustainable but, in view of the subsequent production of the postal documents in a connected matter, the appropriate remedy is to set aside the acquittal and remit the case for fresh consideration, allowing the complainant to produce the postal documents and permitting the accused to adduce evidence in response. The appeal is allowed, the impugned judgment is set aside and the matter is remanded for fresh trial with opportunity to adduce the postal evidence.