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Giving of notice under Section 138 of the Negotiable Act explained

In Nitai Majumder vs Tanmoy Krishna Das, appeal was filed before the Tripura High Court against the conviction order passed by the lower courts against the petitioner for having committed offence punishable under Section 138 of the NI Act.

One of the objections raised by the petitioner against the order of the lower court was that service of statutory notice on the accused petitioner after dishonor of the cheque from the bank was not also proved.

The High Court observed that after the cheque presented by the Respondent was returned by the bank due to insufficiency of funds, a demand notice was then issued by the respondent to the petitioner through his lawyer demanding payment within 15 days and such notice was sent to his known residential address through post registered with AD. The postman entrusted with the service of the notice visited the house of the petitioner several times. Every time the house inmates of the petitioner refused to receive the registered letter and told the postman that the addressee was out of station. The envelope containing the notice was returned to the respondent along with the AD card with a report that the addressee was out of station for long time.

The High Court referred to various decisions of the High Court where it was held that that the notice, duly directed, shall serve the purpose of law. Once the notice is dispatched, part of the payee is over and, the next depends on what the sendee does.

The High Court held that the payee has to make a demand by "giving a notice" in writing. The legislature says that failure on the part of the drawer to pay the amount should be within 15 days "of the receipt" of the said notice. It is, therefore, clear that 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. 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 notice on the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the Act. It must be borne in mind that the court should not adopt an interpretation which helps a dishonest evader, and clips an honest payee as that would defeat the very legislative measure.

In Maxwell's Interpretation of Statutes, the learned author has emphasised that "provisions relating, to giving of notice often receive liberal interpretation" (vide p. 99 of 12th Edn.). The context envisaged in Section 138 of the Act invites a liberal interpretation for the person who has the statutory obligation to give notice because 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 the 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. 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.

It is well settled that a notice refused to be accepted by the addressee can be presumed to have been served on him (vide Harcharan Singh Vs. Smt. Shivrani and Others, and Jagdish Singh Vs. Natthu Singh) .

Here the notice is returned as addressee being not found and not as refused. As per Section 27 of the General Clauses Act, 1897, unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying 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. Section 138 of the Act does not require that the notice should be given only by "post". Nonetheless where the sender has dispatched the notice by post with the correct address written on it, it can be deemed to have been served on the sender unless he proves that it was not really served and that he was not responsible for such non-service. The object of notice is to give a chance to the drawer of the cheque to rectify his omission and also to protect an honest drawer. Service of notice of demand in clause (b) of the proviso to Section 138 is a condition precedent for filing a complaint under Section 138 of the Act. In the present appeal there is no dispute that notice was in writing and this was sent within fifteen days of receipt of information by the appellant Bank regarding return of cheques as unpaid. Therefore, the only question to be examined is whether in the notice there was a demand for payment. The complainant has led convincing evidence to prove that the postman visited the house of the accused at the known address on 4 dates. Every time the postman was told by the house inmates that he was out of station. The fact is proved by the report given by the postman. From the overall conduct of the accused, it is clear that he wanted to avoid the service of the notice. In view of the law decided by the Apex Court, the objection raised by the accused petitioner in this regard is not acceptable. Therefore, it cannot be said that the demand notice was not served on him.

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