138NI Act-Proceedings Cannot Be Quashed On The Ground That Notice Not Served Within Statutory Period:SC [Read Order]

The Supreme Court has recently held that the proceedings under Section 138 of the Negotiable Instruments Act cannot be quashed on the ground that the demand notice not duly served within the statutory period.

The Court has reiterated that the service of notice to the accused under Section 138 of the Negotiable Instruments Act is a triable issue and cannot be proceeded as an indisputable position in a petition filed under Section 482 CrPC by the accused.

In this case, the High Court allowed the quashing petition filed by the accused under Section 482 of Cr.P.C. on the grounds that the legal notice has not been served on the accused within the statutory period and that the remark noted on the cheque return memo. The High Court had further held that the provisions contained in the service of notice are not superseded in the General Clause Act and, therefore, Section 27 of the General Clause has not been applicable in the present case.

The bench comprising Justice AM Khanwilkar and Justice Dinesh Maheshwari, in its brief order in Kishore Sharma vs. Sachin Dubey, set aside the High Court order, and observed:

Both these facts would require the parties to produce evidence and are triable issues, as expounded by this Court in 'Ajeet Seeds Limited vs. K. Gopala Krishnaiah' reported in (2014) 12 SCC 685 and in 'Laxmi Dyechem vs. State of Gujarat and Others' reported in (2012) 13 SCC 375. "

In Ajeet Seeds Ltd., the Supreme Court had held that the service of notice is a matter of evidence and proof and it 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. In this case, it was further held as follows:

"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 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 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." 

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