M/S. Indo Automobiles vs M/S. Jai Durga Enterprises & Ors

M/s. Indo Automobiles ...Appellant(s)

Versus

M/s. Jai Durga Enterprises & Ors. ...Respondent(s)

ORDER

1. Leave granted.

2. This appeal is directed against an order dated

17th of May, 2006 passed by the High Court of

Judicature at Allahabad in Criminal Misc.

Application No.11313 of 2005.

3. In spite of due service, no one has appeared

before us to contest this appeal.

4. We have heard the learned counsel for the

appellant and perused the materials on record.

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5. A proceeding under Section 138 of the

Negotiable Instruments Act was initiated against

the respondents. In the said proceeding, the

Judicial Magistrate, First Class, Saharanpur passed

an order summoning the respondents for trial.

Challenging the aforesaid order, an application

under Section 482 of the Code of Criminal

Procedure was moved by the respondents for

quashing the summons. The High Court by the

impugned order had quashed the said proceeding

on the ground that no notice was served on the

respondents.

6. Feeling aggrieved, this Special Leave Petition

was filed which, on grant of leave, was heard in the

presence of the learned counsel for the appellant.

7. Having considered the materials on record and

after hearing learned counsel for the appellant, we

are of the view that the impugned Judgment of the

High Court cannot be sustained for the reasons

stated hereinafter.

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8. Admittedly, notice under Section 138B of the

Negotiable Instruments Act was sent to the

respondents through registered post and under a

certificate of posting on their correct address of the

respondents. The High Court had quashed

proceeding on the ground that although notice

through registered post and also under certificate of

posting were sent by the appellant/ complainant to

the respondents but because of the endorsement of

the postal peon, the service could not be said to

have been effected. In our view, the High Court was

not justified in holding that service of notice could

not be found to be valid. In K.Bhaskaran vs.

Sankaran Vaidhyan Balan & Anr. [1999 (7) SCC

510], it has been held that the context of section

138B of the Negotiable Instruments Act invites a

liberal interpretation favouring the person who has

the statutory obligation to give notice under the Act

because he must be presumed to be the loser in the

transaction and provision itself has been made in

3 his interest and if a strict interpretation is asked for

that would give a handle to the trickster cheque

drawer. It is also well settled that once notice has

been sent by registered post with acknowledgment

due in a correct address, it must be presumed that

the service has been made effective. We do not find

from the endorsement of the postal peon that the

postal peon was at all examined. In V. Raja Kumari

vs. P. Subbarama Naidu & Anr. [2004 (8) SCC 774],

again this Court reiterated the same principle and

held that the statutory notice under Sections 138

and 142 of the Negotiable Instruments Act, 1881

sent to the correct address of the drawer but

returning with the endorsement must be presumed

to be served to the drawer and the burden to show

that the accused drawee had managed to get an

incorrect postal endorsement letter on the

complainant and affixed thereof have to be

considered during trial on the background facts of

the case.

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9. That being the position, we are unable to

sustain the order of the High Court and the

impugned order is set aside and the proceeding

started under Section 138 of the Negotiable

Instruments Act is restored to its original file. The

appeal is, therefore, allowed to the extent indicated

above. We, however, make it clear that at the trial

stage on the question of interpretation, postal

endorsement affixed thereof shall be considered on

the background facts of the present case.

...............................J. [TARUN CHATTERJEE]

New Delhi; .................................J. July 15, 2008. [AFTAB ALAM]

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