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REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.1523           OF 2014   [Arising out of Special Leave Petition (Crl.)No.8783 of 2013]

M/s. Ajeet Seeds Ltd. … Appellant

Vs.

K. Gopala Krishnaiah … Respondent

J U D G M E N T

(SMT.) RANJANA PRAKASH DESAI, J.    1. Leave granted.

2. The appellant is the complainant.  He has challenged  

the  judgment  and  order  dated 21/03/2013  passed  by  the  

High Court of Judicature of Bombay, Bench at Aurangabad in  

Criminal  Writ  Petition  No.1131  of  2012  whereby  the  High  

Court has quashed the complaint filed by him under Section  

138 of the Negotiable Instruments Act, 1881 (‘the NI Act’)

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being SCC No.  4118 of 2007 in the court of Chief  Judicial  

Magistrate, First Class, Aurangabad.

3. For  the  purpose  of  disposal  of  this  appeal,  it  is  not  

necessary to narrate all the facts of the case.  Suffice it to  

say that  the complaint  was filed alleging that  the cheque  

issued by the respondent-accused for repayment of a legally  

recoverable debt bounced.  On 17/6/2011 learned Magistrate  

issued  process.   The  respondent-accused  filed  a  criminal  

revision  application  before  the  Additional  Sessions  Judge,  

Aurangabad mainly on the assertion that the demand notice  

was  not  served  on  him.   The  said  criminal  revision  

application was rejected.  Being aggrieved by the said order,  

the  respondent-accused  filed  criminal  writ  petition  in  the  

High  Court  under  Section  482  of  the  Code  of  Criminal  

Procedure, 1973 (‘the Cr.P.C.’).  The High Court quashed  

the complaint on a short ground that on reading verification  

of the complaint dated 17/6/2011, it is explicit that there are  

no  recitals  to  demonstrate  that  the  notice  issued  under  

Section 138 of the NI Act by the complainant was served  

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upon the respondent-accused on any specific date.  The High  

Court observed that there is no proof that either the notice  

was served or it was returned unserved/unclaimed and that  

that there is no averment in the complaint about the same.  

The High Court concluded that, therefore, there could not be  

a cause of action to prosecute the accused under Section  

138 of the NI Act.  For coming to this conclusion, the High  

Court relied on the order of this Court in  Shakti Travel &  

Tours v. State of Bihar & Anr  1  .  The extract on which the  

High Court relied upon could be quoted :

“2.  The  accused  who  is  the  appellant,   assails  the  order  of  the  High  Court   refusing  to  quash  the  complaint  filed  under  Section  138  of  the  Negotiable   Instruments  Act.  The  only  ground  on  which  the  learned  counsel  for  the  appellant  prays  for  quashing  of  the   complaint is that on the assertions made  in paragraph 8 of the complaint,  it  must   be held that notice has not been served  and,  therefore,  an  application  under   Section  138  could  not  have  been  maintained.   Undoubtedly,  the  accused  has a  right  to  pay the money within  15  days from the date of the service of notice  and only when it fails to pay, is it open for   the  complainant  to  file  a  case  under   

1 (2002) 9 SCC 415

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Section 138 of the Negotiable Instruments   Act.   That  being the position and in  the   complaint  itself  having  not  been  mentioned  that  the  notice  has  been  served, on the assertions made in para 8,   the complainant itself is not maintainable.   We accordingly quash the complaint.”

4. We have heard,  at  some length,  Mr.  S.S.  Choudhari,  

learned  counsel  appearing  for  the  appellant.  Counsel  

submitted  that  the  High  Court  has  erred  in  quashing  the  

complaint  on  the  ground  that  complaint  is  silent  about  

service of notice.  Counsel submitted that in C.C. Alavi Haji  

v.   Palapetty Muhammed & Anr.  2  ,   a three Judge Bench of  

this Court has conclusively decided this issue.  It is held in  

this case that it is not necessary to aver in the complaint  

that notice was served upon the accused.  The impugned  

order, therefore, deserves to be set aside.  

5. We  are  inclined  to  agree  with  the  counsel  for  the  

appellant.  

6. In  C.C. Alavi Haji,  a three-Judge Bench of this Court  

was dealing with the question referred by a two-Judge Bench  2 (2007) 6 SCC 555

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for consideration.  The referring Bench was of the view that  

in D. Vinod Shivappa   v.   Nanda Belliappa3, this Court  

did not take note of Section 114 of the Evidence Act in its  

proper perspective.   It felt that presumption under Section  

114 of the Evidence Act being a rebuttable presumption, the  

complainant  should  make certain  necessary  averments  to  

raise the presumption of service of notice; that it was not  

sufficient for a complainant to state that a notice was sent  

by registered post and that the notice was returned with the  

endorsement  ‘out  of  station’  and  that  there  should  be  a  

further averment that the addressee-drawer had deliberately  

avoided  receiving  the  notice  or  that  the  addressee  had  

knowledge of  the  notice,  for  raising  a  presumption  under  

Section  114 of  the  Evidence  Act.   The  following question  

was,  therefore,  referred  to  the  larger  Bench  for  

consideration.  

“Whether  in  absence  of  any  averments  in  the   complaint to the effect that the accused had a role   to play in the matter of non-receipt of legal notice;   or that the accused deliberately avoided service of   notice,  the  same  could  have  been  entertained  

3 (2006) 6 SCC 456

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keeping in view the decision of this Court in Vinod  Shivappa  ’s   case?”

7. Dealing with the above question, this Court referred to  

K. Bhaskaran  v.  Sankaran Vaidhyan Balan4, where this  

Court  referred  to  Section  27  of  the  General  Clauses  Act,  

1897 (‘the GC Act’) and observed that since the NI Act does  

not require that notice should only be given by ‘post’ in a  

case where the sender has despatched the notice by post  

with correct address written on it, Section 27 of the GC Act  

could be profitably imported and in such a situation service  

of notice is  deemed to have been effected on the sender  

unless he proves that it was really not served and that he  

was not responsible for such non-service.  

8. This  Court  then referred  to  Vinod Shivappa’s  case,  

where the above aspects have been highlighted.  This Court  

quoted the following paragraph from Vinod Shivappa with  

approval.  

“15. We cannot also lose sight of the fact that the   drawer may by dubious means manage to get an  

4 (1999) 7 SCC 510

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incorrect endorsement made on the envelope that   the premises has been found locked or that the   addressee  was  not  available  at  the  time  when  postman went for delivery of the letter. It may be   that  the  address  is  correct  and  even  the  addressee is available but a wrong endorsement is   manipulated by the addressee. In such a case, if   the facts are proved, it may amount to refusal of   the notice. If the complainant is able to prove that   the drawer of the cheque knew about the notice   and deliberately  evaded service and got  a false   endorsement made only to defeat the process of   law,  the  Court  shall  presume  service  of  notice.   This, however, is a matter of evidence and proof.   Thus  even in a case where the notice is  returned  with  the  endorsement  that  the   premises  has   always been found locked  or the addressee was   not available at the time of postal delivery, it will   be open to the complainant to prove at the trial by   evidence that the endorsement is not  correct and   that  the  addressee,  namely   the  drawer  of  the   cheque,  with  knowledge  of  the  notice  had   deliberately avoided to receive notice. Therefore,   it would be pre-mature at the stage of issuance of   process, to move the High Court for  quashing of   the proceeding under Section 482 of the Code of   Criminal Procedure.  The question as to whether   the service of notice has been fraudulently refused  by  unscrupulous means is a question of fact to be   decided on the basis of evidence. In such a case   the  High  Court  ought  not  to  exercise  its   jurisdiction  under  Section   482  of  the  Code  of   Criminal Procedure.”

9. This Court then explained the nature of presumptions  

under Section 114 of the  Evidence Act and under Section 27  

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of the GC Act and pointed out how these two presumptions  

are to be employed while considering the question of service  

of  notice  under  Section  138  of  the  NI  Act.   The  relevant  

paragraphs read as under:

“13. According to Section 114 of the Act, read with   Illustration (f) thereunder, when it appears to the   Court that the common course of business renders   it probable that a thing would happen, the Court   may draw presumption that the thing would have   happened,  unless  there  are  circumstances  in  a   particular case to show that the common course of   business  was  not  followed.  Thus,  Section  114   enables the Court to presume the existence of any   fact  which  it  thinks  likely  to  have  happened,   regard being had to the common course of natural   events,  human  conduct  and  public  and  private   business  in  their  relation  to  the  facts  of  the   particular  case.  Consequently,  the  court  can   presume that the common course of business has   been followed in particular cases. When applied to   communications sent by post, Section 114 enables   the Court to presume that in the common course   of natural events, the communication would have   been delivered at the address of the addressee.   But the presumption that is raised under Section   27 of the G.C. Act is a far stronger presumption.   Further, while Section 114 of Evidence Act refers   to a general presumption, Section 27 refers to a   specific  presumption.  For  the  sake  of  ready  reference,  Section  27  of  G.C.  Act  is  extracted  below:

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“27.  Meaning  of  service  by  post.-   Where any Central Act or regulation  made  after  the  commencement  of   this  Act  authorizes  or  requires  any  document  to  be  served  by  post,   whether  the  expression  ‘serve’  or   either  of  the  expressions  ‘give’  or   ‘send’  or  any  other  expression  is   used,  then,  unless  a  different   intention  appears,  the  service  shall   be deemed to be effected by properly   addressing,  pre-paying  and  posting  by registered post, a letter containing   the  document,  and,  unless  the  contrary  is  proved,  to  have  been  effected  at  the  time  at  which  the  letter  would  be  delivered  in  the   ordinary course of post”.

14.  Section 27 gives  rise  to  a  presumption that   service of notice has been effected when it is sent   to the correct address by registered post. In view   of  the  said  presumption,  when  stating  that  a   notice  has  been  sent  by  registered  post  to  the   address of the drawer, it is unnecessary to further   aver in the complaint that in spite of the return of   the notice unserved,  it  is  deemed to have been  served or that the addressee is deemed to have   knowledge  of  the  notice.  Unless  and  until  the  contrary  is  proved  by  the  addressee,  service  of   notice  is  deemed  to  have  been  effected  at  the   time  at  which  the  letter  would  have  been   delivered in the ordinary course of business. This   Court has already held that when a notice is sent   by registered post and is returned with a postal   endorsement  ‘refused’  or  ‘not  available  in  the   house’  or  ‘house  locked’  or  ‘shop  closed’  or   ‘addressee not in station’, due service has to be   presumed.  [Vide Jagdish Singh Vs. Natthu Singh  

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(1992) 1 SCC 647; State of M.P. Vs. Hiralal & Ors.   (1996)  7  SCC  523  and  V.Raja  Kumari  Vs.   P.Subbarama Naidu & Anr. (2004) 8 SCC 74] It is,   therefore,  manifest  that  in  view  of  the   presumption available under Section 27 of the Act,   it is not necessary to aver in the complaint under   Section 138 of the Act that service of notice was   evaded by the accused or that the accused had a   role to play in the return of the notice unserved.”

10. It  is  thus clear  that  Section 114 of  the Evidence Act  

enables the Court to presume that in the common course of  

natural  events,  the  communication  would  have  been  

delivered at the address of the addressee.  Section 27 of the  

GC Act gives rise to a presumption that service of notice has  

been  effected  when  it  is  sent  to  the  correct  address  by  

registered post.  It is not necessary to aver in the complaint  

that  in  spite  of  the  return  of  the  notice  unserved,  it  is  

deemed  to  have  been  served  or  that  the  addressee  is  

deemed to have knowledge of the notice.  Unless and until  

the contrary is proved by the addressee, service of notice is  

deemed to have been effected at the time at which the letter  

would  have  been  delivered  in  the  ordinary  course  of  

business.  

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11. Applying the above conclusions to the facts of this case,  

it must be held that the High Court clearly erred in quashing  

the complaint on the ground that there was no recital in the  

complaint that the notice under Section 138 of the NI Act  

was served upon the accused.  The High Court also erred in  

quashing  the  complaint  on  the  ground that  there  was  no  

proof either that the notice was served or it was returned  

unserved/unclaimed.  That is a matter of evidence.  We must  

mention that in  C.C. Alavi Haji, this Court did not deviate  

from the view taken in Vinod Shivappa, but reiterated the  

view expressed therein with certain clarification.  We have  

already  quoted  the  relevant  paragraphs  from  Vinod  

Shivappa where this Court has held that service of notice is  

a matter of evidence and proof and it would be premature at  

the stage of issuance of process to move the High Court for  

quashing of the proceeding under Section 482 of the Cr.P.C.  

These  observations  are  squarely  attracted  to  the  present  

case.  The High Court’s reliance on an order passed by a  

two-Judge Bench in  Shakti Travel & Tours is  misplaced.  

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The order in Shakti Travel & Tours does not give any idea  

about the factual matrix of that case.  It does not advert to  

rival  submissions.  It  cannot be said therefore that it  lays  

down any law.  In any case in C.C. Alavi Haji, to which we  

have  made  a  reference,  the  three-Judge  Bench  has  

conclusively decided the issue.   In our opinion, the judgment  

of the two-Judge Bench in Shakti Travel & Tours does not  

hold the field any more.  

13. In  the  circumstances,  the  impugned  judgment  is  set  

aside and the instant complaint is restored.  The appeal is  

allowed.

………………………………J. (Ranjana Prakash Desai)

………………………………J. (N.V. Ramana)

New Delhi; July 16, 2014.

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