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Issues: Whether, in a prosecution under Section 138 of the Negotiable Instruments Act, 1881, the cause of action for filing the complaint must be reckoned from the date on which the postal article was endorsed as refused or from the date on which the complainant received the returned notice, and whether the appellate court was right in treating the complaint as time-barred.
Analysis: The Court held that for purposes of proviso (c) to Section 138 of the Negotiable Instruments Act, 1881, the starting point for limitation in cases where the notice is returned unserved as refused or unclaimed is the date on which the complainant receives the returned postal cover or is informed by the postal authority, and not the date of postal endorsement. The Court relied on the settled approach that deemed service must be interpreted practically so that the statutory period of 15 days runs from the date of deemed receipt, preserving the object of the provision and avoiding prejudice to the payee. On the facts, the returned notice was received by the complainant on 19.11.2005 and the complaint filed on 03.01.2006 was within time.
Conclusion: The appellate finding that the complaint was barred by limitation was unsustainable, and the conviction under Section 138 of the Negotiable Instruments Act, 1881 was restored with modified sentence and compensation.
Ratio Decidendi: In cases under Section 138 of the Negotiable Instruments Act, 1881 where the statutory notice is returned as refused or unclaimed, limitation for filing the complaint commences from the date the complainant receives the returned notice or is informed of its non-service, not from the date of the postal endorsement.
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