Holding

A notice sent by registered post to the correct address is deemed to have complied with the mandatory notice requirement of clause (b) of the proviso to Section 138, and no specific averment of the accused's role in non‑receipt is required.

Summary

The appellant Alavi Haji filed a complaint under Section 138 of the Negotiable Instruments Act alleging that the respondent Palapetty Muhammed had failed to pay a dishonoured cheque. The complaint stated that a notice was sent by registered post but was returned with an endorsement that the addressee was abroad, without specifically averring that the notice was sent to the correct address or that the respondent had evaded service. The issue was whether, in the absence of such averments, the mandatory requirement of giving notice under clause (b) of the proviso to Section 138 could be deemed satisfied, considering the presumptions under Section 27 of the General Clauses Act and Section 114 of the Evidence Act. The Court held that when notice is dispatched by registered post to the correct address, the statutory presumption of service under Section 27 applies, making the requirement of clause (b) fulfilled without further pleading, and that Section 114 does not need to be specifically invoked. Consequently, the High Court's decision was affirmed and the appeal was dismissed.

Issues considered

Whether the complaint under Section 138 is maintainable when it does not expressly aver that the accused had a role in the non‑receipt of notice, but the notice was sent by registered post to the correct address and returned unserved.
Whether the presumption of service under Section 27 of the General Clauses Act (and/or Section 114 of the Evidence Act) suffices to satisfy the mandatory notice requirement of clause (b) of the proviso to Section 138.

Legislation cited

Subjects

Section 138Negotiable Instruments Actnotice requirementregistered postpresumption of serviceGeneral Clauses ActEvidence Actcheque bouncecriminal complaintproviso clause (b)proviso clause (c)

Judgment

.;

A C.C. ALA VI HAJI
l~
-<'
~?; • PALAPETTY MUHAMMED AND ANR.
·~--

MAY 18, 2007

·B [K. G. BALAKRISHNAN, CJ. R. V. RA VEENDRAN AND DK JAIN, JJ.]

Negotiable Instruments Act, 1881: ~
')..

s. 138, Proviso, clauses (b) and (c )-Complaint uls 138-Requirement
c ofp0} ee to make a demand for payment ofmoney by giving notice to draw'er
1

of cheque-HELD: When notice is sent by registered post by correctly
addressing the drawer of the cheque, and statement to that effect in the
complaint has been made, mandatory requirement of issue of notice in terms
of clause (b) OJ proviso to s. 138 stands complied with-It is unnecessary to
further aver in the complaint that service of notice was evaded by accused
D or that he had a role to play in return of notice unserved-On facts, though
there was no averment in the complaint to the effect that notice was sent at
correct address of drawer by 'registered post acknowledgment due" but "
returned envelope containing statement "the addressee lfos abroad", hm•ing
been annexed to co111plaint, fofmed part thereof-Thus, requirements of s. 138
E were sufficiently complied witl~Evidence Act, 1872-s. J14-General Clauses
Act, J897-s27.

Words and Phrases:

'giving notice ''-connotation of in the context of clause (b) of Proviso
F to s.138 of Negotiable Instruments Act, 1881.

The instant appeal arose out ofa complainant under Section 138 of the
...---
Negotiable Instruments Act, 1881. The Di\:ision Bench before which the appeal
came to be listed, felt that with regard to sen' ice of notice in terms of clause·
(b) of the proviso to Section 138.of the Act, the Supreme Court in Shivappa's
G case* did not take into consideration the presumption in respect of an official
act as provided under Section 114 of the Evidence Act, 1872. In this view of
the matter, the Bench referred the following question to be decided by a larger
Bench:
r-·
*D. l·'inodShivapha v. Nanda Belliapha, [2006} Supp. 2 SCR 1008 = [2006) 6 SCC 456.

H 326
C.C. ALAVI HAJI v. PALAPETTY MUHAMMED 327
"Whether in absence of any averments in the. complaint to the effect A
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 keeping in view the decision of this Court in Vinod
Shivappa 's case.''

Dismissing the appeal, the Court B

HELD: 1. t. Section 138 of the Negotiable Instruments Act, 1881 was
enacted to punish unscrupulous drawers of cheques who, though purport to
discharge their liability by issuing cheque, have no intention of really doing
so. However, with a view to avert unnecessary prosecution of an honest drawer C
of the cheque and with a view to give an opportunity to him to make amends,
the prosecution under Section 138 of the Act has been made subject to certain
conditions stipulated in the proviso to Section 138 of the Act.
!Para 6) 1331-D, El

1.2. Under Clause (b) of the proviso to s.138 of the Act, the payee or the D
holder of the cheque in due course is required to give a written notice to the
drawer of the cheque within a period of thirty days from the date of receipt of
information from the bank regarding the return of the cheque as unpaid.
Under Clause (c ), the drawer is given fifteen days time from the date of receipt
of the notice to make the payment and only if he fails to make the payment. a
complaint may be filed against him. The object of the proviso is to avoit." E
unnecessary hardship to an honest drawer. Therefore, the observance of
stipulations in Clause (b) and its aftermath in Clause (c) being a pre-condition
for invoking Section 138 of the Act. giving a notice to the drawer before filing
complaint under Section 138 of the Act is a mandatory requirement. 'Giving
notice' in the context is not the same as 'receipt of notice'. GMng is a process F
of which receipt is the accomplishment. It is for the payee to perform the
former process by sending the notice to the drawer at the correct address
and for the drawer to comply with Clause (c) of the proviso.
(Para 6 and 711331-F, G; 332-B)

1
K. Bhaskaran ,., Sankaran Vaidyan Ba/an & Anr., (199717SCC510, G
relied on

2. t. Though Section 138 of the Act does not require that the notice
should only be "post", yet in a case Where the payee has dispatched the notice

I. [1999) Supp. 3 SCR 271. H
328 SUPREME COURT REPORTS (2007) 7 S.C.R.

A by registered post with correct address of the drawee of the cheque, the
principles incorporated in Section 27 of the General Clauses Act, 1897 could -c"' ~
profitably be imported in such a case. In this situation service of notice is '
~

deemed to have been effected on the sendee, unless he pro,·es that it was not
rally served and that he was not responsible for such non-service; the
requirement of Clause (b) of proviso to Section 138 of the Act stands complied
B with, and cause of action to file a complaint arises on the expiry of the period
prescribed in Clause (c) of the said proviso for payment by the drawer of the
cheque. Nevertheless, it would be without prejudice to the right of the drawer
~
to show that he had no.. knowledge that the notice was brought to his address. )..

(Paras 8 and IO) f333-A, BJ
c
2.2. Section 114 of the Evidence act, 1872 read with illustration (f)
thereunder enables the Court to presume the existence of any fact whith it >

thinks likely to have happened, regard being had to be common course of F
natural events, human conduct and public and private business in their relation
to the facts of~he particular case. Consequently, the court can presume that
D the common course of business had been followed in particular cases. When
applied to communicatL,ns sent by post, Section 114 enables the Court to
presume tha~ in the common course of natural events, the communication
would have been delivered at the address of the addressee. But the presumption
that it raised under Section 27 of the G.C. Act is a far stronger presumption.
"~

E Further, while Section 114 of Evidence Act refers to a general presumption,
Section 27 ofG.C. Act refers to a specific presumption.
(Para 131 (335-D, E, F, GJ

2.3. Section 27 ofG.C. Act gh·es rise to a presumption that sen'ice of
notice has been effected when it is sent to the correct address by registered
F 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 u.nnecessary to further
aver in the complaint that in spite of the return of the notice unserved, it is
deemed to h~ve been sen·ed or that the address_ee is deemed to have knowledge
of the notice or that service of notice was evaded by the accused or that the
G accused had a role to play in return of the notice unserved. 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. (Para 141 (336-B, C, DJ

Jagdish Singh v. Natthu Singh, AIR (1992) sc 1604; State of M.P. v. '\"
H Hiraial & Ors., [19961 7 SCC 523 and i--: Raja Kumari v. P. Subbarama Naidu
C.C. ALAVI HAJI v. PALAPETTY MUHAMMED [D.K. JAIN. J.] 329

...
' >·
& Anr.. (2004( 8 sec 774, relied on.

D. Vinod Shivappa v. Nanda Belliappa, 120061 6 SCC 456 and K.
A

Bhaskaran v. Sankaran Vaidhyan Ba/an & Anr., (19971 7 SCC 510, upheld
and reitereated.

2.4. Insofar as the question of disclosure of necessary particulars with B
regard to the issue of notice in terms of proviso (b) of Section 138 of the Act,
in order to enable the Court to draw presumption or inference either under
Section 27 of the G.C. Act or Section 114 of the Evidence Act, is.concerned,
there is no material difference between the two provisions. Therefore, when
the notice is sent by registered post by correctly addressing the drawer of
the cheque, the mandatory requirement of issue of notice in terms of Clause C
(b) of proviso to Section 138 of the Act stands complied with.
(Para 151 (336-F, GI

2.5. In the instant case, though there was no averment to the effect that
the notice was sent at the correct address of the drawer of the cheque by D
'registered post acknowledgment due', but the returned envelope was annexed
to the complaint and it, thus, formed a part of the complaint which showed
that the notice was sent by registered post acknowledgment due to the correct
address and was returned with an endorsement that 'the addressee was abroad.'
On facts in hand, the requirement of Section 138 of the Act had been
sufficiently complied with and the decision of the High Court does not call E
for interference. (Para 18) (338-D, E, Fl

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 767 of
2007.

From the Final Judgment and Order dated 27.3.2006 of the High Court F
ofKerala at Ernakulam in Crl. M.C. Nos. 4630 of2003(C) and 4669 of2003(C).

K. Rajeev for the Appellant.

A. Raghunath, G. Prakash and Beena Prakash for the Respondent.

The Judgment of the Court was delivered by G

D.K. JAIN, J. 1. Leave granted.

2. The matter has been placed before the three Judge Bench in view of
a Reference made by a two-Judge Bench of this Court, pertaining to the
question of service of notice in terms of Clause (b) of proviso to Section 138 H
330 SUPREME COURT REPORTS [2007] 7 S.C.R.

A of the Negotiable Instruments Act. 1881 (in short The Act). Observing that
while rendering the decision in D. Vinod Shivappa v. Nanda Belliappa 1, this
Court has not taken into consideration the presumption in respect of an
official act as provided under Section 114 of the Indian Evidence Act, 1872,
the following question has been referred for consideration of the larger
Bench:
B
\\'hether 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 keeping in view the decision of this Court in Vinod
C Shivappas case (supra)?

3. ·As it hardly needs emphasis that necessary averrnents in regard to
the mode and the manner of compliance with the mandatory requirements of
Section· 138 of the Act are required to be made in the complaint, from the
format~ of the question, the scope of controversy appears to lie in a narrow
D compass but bearing in mind the fact that the issue raised has wider implication
with regard to the very maintainability of the complaint itself, we deem it
necessary to deal with the issue in little more detail.

4. Chapter XVII of the Act originall)'. containing Sections 138 to. 142
was inserted in the Act by the Banking, Public Financial Institutions and
E Negotiable Instruments Laws (Amendment) Act, 1988 with the object of
promoting and inculcating faith in the efficacy of banking system and its
operations and giving credibility to negotiable instruments in business
transaction. The introduction of the said Chapter was intended to create an
atmosphere of faith and reliance on banking system by discouraging people
F from not honouring their commitments by way of payment through cheques.
Section 138 of the Act was enacted to punish those unscrupulous persons
who purported to discharge their liability by issuing cheques without really
intending to do so. To make the provisions contained in the said Chapter
more effective, some more Sections were inserted in the Chapter and some
amendments in the existing provisions were made. Though, in this reference,
G we are not directly concerned with these amendments but they do indica~e
the anxiety of the Legislature to make the provisions more result oriented.
Therefore, while construing the provision, the object of the legislation has to
be borne in mind.

H 1. [2006J 6 sec 456.
C .C. ALA VI HAJJ v. PALAPETTY MUHAMMED [D.K. JAIN. J.] 331

5. As noted above, the controversy arises in the context of service of A
.-.-.,. notice in terms of Section 138 of the Act. The conditions pertaining to the
notice to be given to the drawer, have been formulated and incorporated in
Clauses (b) and (c) of the proviso to Section 138 of the Act, which read as
follows:

"Provided that nothing contained in this section shall apply unless B
(a)
(b) the payee or the holder in due course of the cheque, as the case
may be, makes a demand for the payment of the said amount of
money by giving a notice in writing, to the drawer of the cheque, C
of the receipt of information by him from the bank regarding the
return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said
amount of money to the payee or, as the case may be, to the
holder in due course of the cheque, within fifteen days of the D
receipt of the said notice."

6. As noted hereinbefore, Section 138 of the Act was enacted to punish
unscrupulous drawers of cheques who, though purport to discharge their
liability by issuing cheque, have no intention of really doing so. Apart from
civil liability, criminal liability is sought to be imposed by the said provision E
on such unscrupulous drawers of cheques. However, with a view to avert
unnecessary prosecution of an honest drawer of the cheque and with a view
to give an opportunity to him to make amends, the prosecution under Section
138 of the Act has been made subject to certain conditions. These conditions
are stipulated in the proviso to Section 138 of the Act, extracted above. Under
Clause (b) of the proviso, the payee or the holder of the cheque in due course F
is required to give a written notice to the drawer of the cheque within a period
of thirty days from the date ofreceipt of information from the bank regarding
the return of the cheque as unpaid. Under Clause (c), the drawer is given
fifteen days time from the date of receipt of the notice to make the payment
and only if he fails to make the payment, a complaint may be filed against him. G
As noted above, the object of the proviso is to avoid unnecessary hardship
to an honest drawer. Therefore, the observance of stipulations in quoted
Clause (b) and its aftern1ath in Clause (c) being a pre-condition for invoking
Section 138 of the Act, giving a notice to the drawer before filing complaint
under Section 138 of the Act is a mandatory requirement.
H
332 SUPREME COURT REPORTS (2007] 7 S.C.R.

A 7. The issue with regard to interpretation of the expression giving of
notice used in Clause (b) of the proviso is no more res integra. In K.
Bhaskaran v. Sankaran Vaidhyan Ba/an & Anr., 2 the said expression came
up for interpretation. Considering the question with particular reference to
scheme of Section 138 of the Act, it was held that failure on the part of the
B drawer to pay the amount should be within fifteen days of the receipt of the
said notice. Giving notice in the context is not the same as receipt of notice.
Giving is a process of which receipt is the accomplishment. It is for the payee
to perform the former process by sending the notice to the drawer at the
correct address and for the drawer to comply with Clause (c) of the proviso.
Emphasizing that the provisions contained in Section 138 of the Act required
C to be construed liberally, it was observed thus:

"If a strict interpretation is given that the drawer should have actually
received the notice for the period of 15 days to start running no matter
that the payee sent the r.otice on the correct address, a trickster
cheque drawer would get the premium to avoid receiving the notice
D by different strategies and he coui°d escape from the legal
consequences of Section 138 of the Act. It must be borne in mind that
Court should not adopt an interpretation which helps a dishonest
evader and clips an honest payee as that would defeat the very
legislative measure.
E In Maxwell's Interpretation of Statues the learned author has
emphasized that "provisions relating to giving of notice often receive
liberal interpretation," (vide page 99 of the 12th Edn.) The context
en visaged in Section 13 8 of the Act invites a liberal interpretation for
the person who has the statutory obligation to give notice because
F he is presumed to be the loser in the transaction and it is for his
interest the very provision is made by the legislature. The words in
Clause (b) of the proviso to Section 138 of the Act show that payee
has the statutory obligation to make a demand by giving notice. The
thrust in the clause is on the need to make a demand. It is only the
mode for making such demand which the legislature has prescribed.
G A payee can send the notice for doing his part for giving the notice.
Once it is dispatched his part is over and the next depends on what
the sendee does."

H 2. [1999] 1 sec s10.
C.C. ALAVI HAJI v. PALAPETTY MUHAMMED [D.K. JAIN, J.] 333
8. Since in Bhaskarans case (supra), the notice issued in tenns of A
Clause (b) had been returned unclaimed and not as refused, the Court posed
the question: "Will there be any significant difference between the two so far
as the presumption of service is concerned" It was observed that though
Section 138 of the Act does not require that the notice should be given only
by "post", yet in a case where the sender has dispatched the notice by post
with correct address written on it, the principle incorporated in Section 27 of B
the General Clauses Act, 1897 (for short G.C. Act) could profitably be imported
in such a case. It was held that in this situation service of notice is deemed
to have been effected on the sendee unless he proves that it was not really
served and that he was not responsible for such non-service.

9. All these aspects have been highlighted and reiterated by this Court
c
recently in Vinod Shivappas case (supra). Elaborately dealing with the situation
where the notice could not be served on the addressee for one or the other
reason, such as his non availability at the time of delivery, or premises
remaining locked on account of his having gone elsewhere etc; it was observed
· that if in each such case, the law is understood to mean that there has been D
no service of notice, it would completely defeat the very purpose of the Act.
It would then be very easy for an unscrupulous and dishonest drawer of a
.
cheque to make himself scarce for sometime after issuing the cheque so that ·
the requisite statutory notice can never be served upon him and consequently
he can never be prosecuted. It was further observed that once the payee· of E
the cheque issues notice to the drawer of the cheque, the cause of action to
file a complaint arises on the expiry of the period prescribed for payment by
the drawer of the cheque. If he does not file a complaint within one month
of the date on which the cause of action arises under Clause (c) of the proviso
to Section 138 of the Act, his complaint gets barred by time. Thus, a person
who can dodge the postman for about a month or two, or a person who can F
get a fake endorsement made regarding his non availability, can successfully
avoid his prosecution because the payee is bound to issue notice to him
within a period of 30 days from the date of receipt of information from the
bank regarding the return of the cheque as unpaid. He is, therefore, bound
to issue the notice, which may be returned with an endorsement that the G
addressee is not available on the given address. This Court held:

"We cannot also lose sight of the fact that the drawer 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. H
334 SUPREME COURT REPORTS [2007) 7 S.C.R.

A It may be that the address is correct and even the addressee is -·· ·
avail.able 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
B 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
c 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
D refused by unscrupulous m'!ans 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 10. It is, thus, trite to say that where the payee dispatches the notice
by registered post with correct address of the drawer of the cheque, the
principle incorporated in Section 27 of the G.C. Act would be attracted; the
requirement of Clause (b) of proviso to Section138 of the Act stands complied
with and cause of action to file a complaint arises on the expiry of the period
prescribed in Clause (c) of the said proviso for payment by the drawer of the
F cheque. Nevertheless, it would be without prejudice to the right of the drawer
to show that he had no knowledge that the notice was brought to his address.

11. However, the Referring Bench was of the view that this Court in
Vinod Shivappas case (supra) did not t~ke note of Section 114 of Evidence
Act in its proper perspective. It felt that the presumption under Section 114
G of the Evidence Act being a rebuttable presumption, the complaint should
contain necessary avennents 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 avennent that the addressee-
H drawer had deliberately avoided receiving the notice or that the addressee
C.C. ALAVI HAJJ v. PALAPETTY MUHAMMED [D.K. JAIN, J.] 335
had knowledge of the notice, for raising a presumption under Section 114 of A
Evidence Act.

12. Therefore, the moot question requiring consideration is in regard to
the implication of Section 114 of the Indian Evidence Act, 1872 insofar as the
service of notice under the said proviso is concerned. Section 114 of the
Indian Evidence Act, 1872 reads .as follows: B
"Section 114 - Court may presume existence of certain facts.- The
Court may 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. C
Illustrations

The Court may presume

D
(t) That the common course ofbu:iness has been followed in particular
cases;"

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 E
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, regarq being had to the common
course of natural events, human conduct and public and private business in F
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 G
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:

"2 7. !deaning ofservice by post. - Where any Central Act or Regulation H
336 SUPREME COURT REPORTS [2007) 7 S.C.R.

A 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 Jetter containing the document, and, unless the
B contrary is proved, to have beeq 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
C 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
D 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 v. Natthu Singh3; State of ALP. v. Hirala/
E & Ors. 4 and V Raja Kumari v. P. Subbarama Naidu & Anr.,5] 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 hy the accused or that the accused had
a role to play in the return of the notice unserved.

F 15. Insofar as the question of disclosure of necessary particulars with
regard to the issue of notice in tenns of proviso (b) of Section 138 of the Act.
in order to enable the Court to draw presumption or inference either under
Section 27 of the G.C. Act or Section 114 of the Evidence Act, is concerned.
there is no material difference between the two provisions. In our opinion,
· therefore, when the notice is sent by registered post by correctly addressing
G the. drawer of the cheque, the mandatory requirement of issue of notice in
ter ,,.s of Clause (b) of proviso to Section 13 8 of the Act stands complied with.

3. AIR (1992) SC 1604.
4. [J996J / sec 523.
H s. [2004J s sec 774.
C.C. ALAVI HAJI v. PALAPETTY MUHAMMED [D.K. JAIN. J.] 337

It is needless to emphasise that the complaint must contain basic facts A
regarding the mode and manner of the issuance of notice to the drawer of the
cheque. It is well settled that at the time of taking cognizance of the complaint
under Section 138 of the Act, the Court is required to be primafacie satisfied
that a case under the said Section is made out and the aforenoted mandatory
statutory i ')Cedural requirements have been complied with. It is then for the B
drawer to 1_but the presumption about the service of notice and show that
he had no knowledge that the notice was brought to his address or that the
address mentioned on the cover was incorrect or that the letter was never·
tendered or that the report of the postman was incorrect. In our opinion, this
interpretation of the provision would effectuate the object and purpose for
which proviso to Section 138 was enacted, namely, to avoid unnecessary C
hardship to an honest drawer of a cheque and to provide him an opportunity
to make amends.

16. As noticed above, the entire purpose of requiring a notice is to give
an opportunity to the drawer to pay the cheque amount within 15 days of
service of notice and thereby free himself from the penal consequences of D
Section 138. In Vinod Shivappa (supra), this Court observed:

"One can also conceive of cases where a well intentioned drawer may
have inadvertently missed to make necessary arrangements for reasons
beyond his control, even though he genuinely intended to honour the
cheque drawn by him. The law treats such lapses induced by E
inadvertence or negligence to be pardonable, provided the drawer
after notice makes amends and pays the amount within the prescribed
period. It is for this reason that Clause (c) of proviso to Section 138
provides that the section shall not apply unless the drawer of the
cheque fails to make the payment within 15 days of the receipt of the F
said notice. To repeat, the proviso is meant to protect honest drawers
whose cheques may have been dishonoured for the fault of others,
or who may have genuinely wanted to fulfil their promise but on
account of inadvertence or negligence failed to make necessary
arrangements for the payment of the cheque. The proviso is not meant
to protect unscrupulous drawers who never intended to honour the G
cheques issued by them, it being a part of their modus operandi to
cheat unsuspecting persons."

17. It is also to be borne in mind that the requirement of giving of notice
is a clear departure from the rule of Criminal Law, where there is no stipulation
of giving of a notice before filing a complaint. Any drawer who claims that H
338 SUPREME COURT REPORTS (2007] 7 S.C.R.

A he did not receive the notice sent by post, can, within 15 days of receipt of
summons from the court in respect of the complaint under Section 138 of the
Act, make payment of the cheque amount and submit to the Court that he had
made payment within 15 days ofreceipt of summons (by receiving a ·copy Ci.(
complaint with the summons) and, therefore, the complaint is liable to be
B rejected. A person who does not pay within 15 days ofreceipt of the summons
from the Court along with the copy of the complaint under Section 138 of the
Act, cannot obviously contend that there was no proper service of notic, as
required under Section 13 8, by ignoring statutory presumption to the contrary
under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our
view, any other interpretation of the proviso would defeat the very object of
C the legislation. As obse.rved in Bhaskaran 's case (supra), if the "giving of
notice" in the context of Clause (b) of the proviso was the same as the
"receipt of notice" a trickster cheque drawer would get the premium to avoid
receiving the notice by adopting different strategies and escape from legal
consequences of Section 138 of the Act.
,.

D 18. In the instant case, the avennent made in the complaint in this regard
is: "Though the complainant issued lawyers notice intimating the dishonour ~
of cheque and demanded payment on 4.8.2001, the same was returned on
10.8.2001 saying that the accused was "out of station". True, there was no
averment to the effect that the notice was sent at the correct address of the
E drawer of the cheque by 'registered post acknowledgement due'. But the
returned envelope was annexed to the complaint and it thus, formed a part
of the complaint which showed that the notice was sent by registered post
acknowledgement due to the correct address and was returned with an
endorsement that "the addressee was abroad." We are of the view that on
facts in hand the requirements of Section 138 of the Act had been sufficiently
F complied with and the decision of the High Court does not call for interference.

19. In the final analysis, with the clarification indicated hereinabove, we
reiterate the view expressed by this Court in K. Bhaskaran and Vinod
SMvappas cases (supra).

G 20. For the reasons aforementioned, we do not find any merit in this
appeal. It is dismissed accordingly but with no order as to costs in the
circumstances of the case.

RP. Appeal dismissed.