LI Network
Published on: October 30, 2023 at 13:01 IST
The Allahabad High Court, in a judgment regarding the date of service of a demand notice under the Negotiable Instruments Act, 1881, has held that notice is deemed to be served in the ordinary course of business if it has been proven to be sent through registered post to the correct address.
Justice Jyotsna Sharma presided over the case and stated, “In the instant case, the trial court seems to have drawn a presumption of law as regard service of demand notice. In my opinion, even if the track consignment report is not filed, the court may presume service of notice in ordinary course of business, if it was shown that the same was sent by registered post on the correct address.”
The case involved a complaint filed under Section 138 of the Negotiable Instruments Act against the accused. The evidence presented included a cheque of Rs. 2,75,000, which was returned by the bank with a remark of “funds insufficient,” the return memo, and the demand notice dated 22.02.2019.
The revisional court upheld the trial court’s order, which led to the petitioner approaching the High Court under Article 227 of the Constitution of India.
The petitioner argued that the complainant had not proven that the demand notice was served upon them, an essential condition for taking cognizance as required by the NI Act.
On the other hand, the respondent contended that although there was no mention of the date of receipt of the demand notice, the track consignment report from the postal department was considered by the revisional authority.
The High Court, citing the decision in Deepak Kumar and Another vs. State of U.P., emphasized that it is not necessary for the complaint itself to mandatorily mention the date of receipt of the demand notice. The date of receipt can be inferred from the evidence on record.
Additionally, the High Court relied on Ajeet Seeds Limited vs. K. Gopala Krishnaiah, where the Supreme Court discussed the nature of presumptions under Section 114 of the Evidence Act and Section 27 of the General Clauses Act to consider the question of service of notice under Section 138 of the NI Act.
The Supreme Court concluded that notice is deemed to have been served when sent to the correct address by registered post unless the contrary is proven by the addressee.
Justice Sharma, in her ruling, held that notice is considered served in the ordinary course of business when it is proven to have been sent by registered post to the correct address. As a result, the case was dismissed.
Case Title: Top Filling Point Proprietor Rakesh Agrawal vs. State of U.P. and Another 2023