MIS. AJEET SEEDS LTD.versusK. GOPALA KRISHNAIAH

                         [2014] 8 S.C.R. 880


A                     MIS. AJEET SEEDS LTD.
                                   v.
                      K. GOPALA KRISHNAIAH
                 (Criminal Appeal No.1523 of 2014)
                            JULY 16, 2014.
B
     [RANJANA PRAKASH DESAI AND N.V. RAMANA, JJ.]

        NEGOTIABLE INSTRUMENTS ACT, 1881:

c        s. 138 - Complaint of dishonour of cheque - Service of
    notice u/s 138 and proof thereof - Held: 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 -
D 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 - High Court clearly erred in quashing the .
    complaint on the ground that there was no recital in the
E . complaint that the notice uls 138 of the NI Act was served upon
    the accused - It also e"ed 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 - Section 114 of Evidence Act enables
    the court to presume that in the common course of natural
F events, the communication would have been delivered at the
    address of the addressee - Section 27 of General Clauses
    Act gives rise to a presumption that service of notice has been
    effected when it is sent to the ,correct address by registered
    post - Evidence Act, 1872 - f· 114 - General Clauses Act,
G 1897 - s.27.                                .

         The complaint filed by the complainant against the
    respondent of offence u/s 138 of the Negotiable
    Instruments Act, 1881 was quashed by the High Court on
H                                 880
  AJEET SEEDS LTD. v. K. GOPALA KRISHNAIAH              881

                                                               A
the petition u/s 482 Cr.P.C. filed by the respondent, on the
grounds that there were no recitals in the complaint to
demonstrate that the notice issued u/s 138 of the Act by
the complainant was served upon the respondent~
accused on any specified date and that there was no
proof that either the notice was served or it was returned     8
unserved/unclaimed and that there was no averment in
the complaint about the same.

    Allowing the appeal, the Court

     HELD: 1.1. Section 114 of the Evidence Act enables
                                                               c
the Court to presume that ir. the common course of
natural events, the communication would have been
delivered at the address of the addressee. Section 27 of
the General Clauses Act gives rise to a presumption that
                                                           0
service of notice has been effected when it is sent to the
correct addcess 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, E
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. [para 10] [888-E-G)

      C. C. Alavi Haji v. Palapetty Muhammed & Anr. 2007       F
              =
 (7) SCR 326 2007 (6) SCC 555; D. Vinod Shivappa v.
 Nanda Belliappa 2006 (2) Suppl. SCR 1008           =2006
 (6) SCC 456; and K. Bhaskaran v. Sankaran Vaidhyan
,Ba/an 1999 (3) Suppl. SCR 271 = 1999 (7) SCC 510 - relied
 on                                                            G
    Shakti Travel & Tours v. State of Bihar & Anr. (2002) 9
sec 415 - held inapplicable.
    1.2. In the facts of the instant case, the High Court
clearly erred in quashing the complaint on the ground          H
    882       SUPREME COURT REPORTS             [2014] 8 S.C.R.


A that there was no recital in the complaint that the notice
  u/s 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
B matter of evidence. In the circumstances, the impugned
  judgment is set aside and the complaint restored.[para
  11 and 13] [888-H; S89-A-B, F]

                         Case Law Reference :
c    (2902) 9 sec 415               held inapplicable   para 3
     2007 (7) SCR 326               relied on           para 4
     2006 (2) Suppl. SCR 1008 relied on                 para 6
     199~ (3) Suppl.    SCR 271     relied on           para 7
D
        CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
    No.1523 of 2014.

      From the Judgment and Order dated 21.03.2013 in
E Criminal Writ Petition No. 1131/2012 of the High Court of
  Bombay Bench at Aurangabad.

        Sudhanshu S. Choudhari and Vaisalya Vigya for the
    Appellant.

F         Amol Nirmalkumar Suryawanshi for the Respondent.

          The Judgment of the Court was delivered by

      (SMT.) RANJANA PRAKASH DESAI, J. 1. Leave
G granted.
      2. The appellant is the complainant. He has chanenged 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
H has quashed the complaint filed by him under Section 138 of
      AJEET SEEDS LTD. v. K. GOPALA KRISHNAIAH               883
            [RANJANA PRAKASH DESAI, J.)

the Negotiable Instruments Act, 1881 ('the NI Act') being SCC        A
No. 4118 of 2007 in the court of Chief Judic;ial 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
                                                                     8
  that the complaint was filed alleging that the cheque issued by
  the respondent-accused for repayment of a legally recoverable
  debt bounced. On 17 /612011 learned Magistrate issued
  process. The respondent-accused filed a criminal revision
  application before the Additional Sessions Judge, Aurangabad C
  mainly on the assertion that the demand notice was not served
  on him. The said criminal revision appllcation 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 D
  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 upon the respondent-accused on any specific date. The
  High Court observed that there is no proof that either the notice E
  was served O"r 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 F
  order of this Court in Shakti Travel & rours v. State of Bihar
  & Anr1. The extract on which the High Court relied upon could
  be quoted:

        "2. The· accused who is the appellant, assails the order G
        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
 1.    (2002) ~sec 415.                                              H
    884        SUPREME COURT REPORTS                [2014] 8 S.C.R.


A         the assertions made in paragraph 8 of the complqint,' ft
          must be held that notice has not been served and,
          therefore, an application under Section 1.38 could not
          have been maintained. Undoubtedly, the accused has a
          right to pay the money within 15 days from the date of
B         the service of notice and only when it fails to pay, is it
          open for the complainant to file a case under Section 138
          of the Negotiable Instruments Act. That being the
          position and in the complaint itself having not been
          mentioned tha( the notice has been served, on the
c         assertions made in para 8, the complainant'itse/f is not
          maintainable. We accordingly quash the complaint.      D




       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
D 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
E accused. The impugned order, therefore, deserves to be set
  aside.

       5. We are inclined to agree with the counselJor the
  appellant.
F                                  ,.
       6. In .C..C. Alavi Haji, a three-Judge Bench of this Court
  was dealing with the question referred by a two-Judge Bench
  for consideration. The referring Bench was of the view that in
  D. Vinod Shivappa v. Nanda Bel/iappa 3, this Court did not take
  note of Section 114 of the Evidence Act in its proper
G 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

    2.   c2001) 6 sec 555.
H   3.   c2006) 6 sec 456.
     AJEET SEEDS LTD. v. K. GOPALA KRISHNAIAH                885
           [RANJANA PRAKASH DESAI, J.)

presumption of service of notice; that it was not sufficient for a   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        B
raising a presumption under Section 114 of the Evidence Act.
The following question was, therefore, referred to the larger
Bench for consideration.

     7. Dealing with the above question, this Court referred to      C
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          D
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.
                                                                     E
    8. Thjs 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 F
      may by dubious means manage to get an 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 G
      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

4.   (1999) 1 sec s10.                                               H
    886       SUPREME COURT REPORTS                [2014) ? S.C.R.


A         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 bf law, the Court shall presume service of
          notice. This, however, is a matter of evidence and proof.
B         Thus even in a case where the notice is returned with the
          endorsement that the premises has always been foun~
          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
c         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
D         482 of the Code of Criminal Procedure. The question as
          to whether tl}e service of notice has been fraudulently
          refused by llrtSC/1.l{)_ulous 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."
E
         9. This Court then explained the nature of presumptions
    under Section 114 of the Evidence Act and under Section 27
    of the GC Act and pointed out how these two presumptions
    are to be employed while considering the question of service
F   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
G         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
H
AJEET SEEDS LTD. v. K. GOPALA KRISHNAIAH                887
       [RANJANA PRAKASH DESAI, J.]

 of any fact which it thinks likely to have happened, regard A
 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 presumf] that the common course of
 business has been followed in particular cases. When B
 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 Sectiorf 27 of the G. C. c
 Act is a far stronger presumption. Furthef; while Section
 114 of Eviaence 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:
                                                                D
       "27. Meaning of service by post.- Where any
       C~ntral 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'   E
       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      F
       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 G
 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 H
    888       SUPREME COURT REPORTS               [2014] 8 S.C.R.


A         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
B         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
c         station', due service has to be presumed. [Vide Jagdish
           Singh Vs. Natthu Singh (1992) 1 SCC 647; State of M.P.
           Vs. Hirata/ & 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
0
           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."
E      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
F 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
G 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.

        11. Applying the above conclusions to the facts ·of this
H   case, it must be held that the High Court clearly erred in
  AJEET SEEDS LTD. v. K. GOPALA KRISHNAIAH                 889
        [RANJANA PRAKASH DESAI, J.]

quashing the complaint on the ground that there was no recital A
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 B
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 · C
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 D
is misplaced. 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 Benell has conclusively decided E
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.                                                           F

Rajendra Prasad                                  Appeal allowed.