S. 138 NI Act | Demand Notice Sent To Cheque Drawer Via Email/WhatsApp Is Valid: Allahabad High Court

For context, Section 13 of the IT Act provides that as soon as the notice in electronic form is entered, a computer resource outside the control of the originator, it is deemed to be dispatched and as soon as the notice in electronic form is entered, the designated computer resource or enters the computer resources of the addressee, and then it is deemed to be served.

To arrive at this conclusion, the Court read into Proviso (b) of Section 138 NI Act to note that though this provision provides giving notice in writing, however, no specific mode of sending notice is provided therein, and even if Section 94 of the NI Act is taken into account, then also it can't be said that notice has to be mandatorily sent by post.

Against this backdrop, referring to Section 4 of the IT Act, the Court concluded that Section 138 NI Act notice will also include email or WhatsApp if the same remains available for subsequent reference.

“Section 4 of the I.T. Act very clearly provides that notwithstanding anything contained in such law which provides notice in written form then written will also include the notice rendered or made available in electronic form, which should be available for subsequent reference. The word 'electronic form' is defined in Section 2(1)(r) of I.T. Act, which provides any information generated, sent, received or stored in media, magnetic, optical, computer memory, micro film, computer generated micro fiche or similar device. Therefore, it is clear from the provision the notice mentioned in Section 138 N.I. Act will also include email or WhatsApp if the same remains available for subsequent reference,” the Court observed.

In this regard, the Court also referred to Section 65(B) of the Indian Evidence Act, 1972 which accepts the admissibility of electronic records.

Regarding postal deliveries of notices under section 138 of the NI Act, a bench of Justice Arun Kumar Singh Deshwal held the court can presume that postal notice would have been served to the drawer within ten days from the date of its dispatch in view of Section 114 of the Evidence Act and Section 27 of the General Clause Act.

“In the present time of digitalization and computerisation, delivery of post has become so fast that the court can presume that a correctly addressed registered post has been served upon the addressee within a maximum period of 10 days if the date of service is not mentioned in the complaint. After the initiation of the online post tracking system, it is too easy to know the date of delivery of the registered post. In the ordinary course of business, the registered letter is delivered within 3 to 10 days if correctly addressed,” the Court observed.

The single judge made these observations while dismissing an application filed by one Rajendra seeking to quash the summoning order as well as the entire proceedings of the Complaint case (under Section 138 of the NI Act) pending in the court of Metropolitan Magistrate (Kanpur Nagar).

The facts in brief

Essentially, it was the case of the applicant that the impugned complaint was itself defective as the same was filed before the expiration of 15 days from the date of service of notice to him [regarding the return of the cheque as per Section 138 proviso (c)].

For context, a notice under Section 138 of the NI Act (for dishonour of cheque) has to be sent within 30 days from the date of the cheque bounce and if the drawer fails to pay the amount within 15 days from the date of the receipt of the notice, a complaint may be moved in that regard within next one month.

It was contended that after the cheque bounced on July 13, 2022, a legal notice was sent to the applicant by the opposite party No. 2 on July 23, 2022, and thereafter, without mentioning any date for service of notice, the complaint was filed on August 31, 2022, and hence, the complaint case was required to be quashed as the same was filed before the expiry of 15 days.

On the other hand, the AGA contended that the date of service of notice sent by the complainant upon the drawer of the cheque is not required to be mentioned in the complaint.

He added that the defence, whether notice has been served or not upon the drawer of the cheque can be considered during the trial and the same can't be a ground to quash the complaint.

Court's observations

After hearing the parties, the Court framed the following questions for consideration:

• Whether the impugned complaint is defective under Clause (c) of the proviso to Section 138 of the Negotiable Instrument Act, being filed before the expiry of Fifteen days from the date of service of notice.?
• Whether the law requires to mention the date of service of notice upon drawer in the complaint filed against him under Section 138 NI Act ?

To answer the first question, the Court referred to Apex Court's ruling in the case of C. C. Alavi Haji vs Palapetty Muhammed and another 2007 wherein it was held that if the complainant sends notice to the drawer through registered post and no date of service is mentioned, even then, the court can presume under Section 114 of the Evidence Act as well as Section 27 of the General Clause Act that the notice has been served in time when a letter sent through the registered post would have been delivered in the ordinary course of business.

Now, to answer the question as to what would be the time frame in which the court may presume delivery of the registered letter in the ordinary course of business, the Court noted that in the present time of digitalization and computerisation, a court can presume that a correctly addressed registered post would have been served upon the addressee within a maximum period of 10 days if the date of service is not mentioned in the complaint.

In view of this, the Court reverted to the facts of the case to note that the complainant sent the notice on July 23, 2022, and therefore, assuming ten days for notice delivery, the applicant had until August 2, 2022, to pay the demanded cheque amount within the stipulated 15 days.

After that, the Court added, a complaint could have been filed after August 17, 2022, and since, in the instant case, the complaint was filed on August 31, the Court ruled that the complaint was not defective under Clause (c) of the proviso of Section 138 as well as Section 142(1)(b) of NI Act.

In view of this, the Court issued the following directions to all Magistrates/Courts in the state:-

• Where complaint under N.I. Act is filed, then the concerned Magistrate/ Court will emphasis for filing the post tracking report along with the complaint, if sent through Registered Post, so as to leave no scope for the dishonest drawer of cheque from taking the plea of non-service of statutory notice of 15 days.
• Notice sent through 'email or WhatsApp' , if it fulfils the requirement of Section 13 of I.T. Act will also be a valid notice under Section 138 N.I. Act to the drawer of cheque, and same will be deemed to be served on the date of dispatch, itself.

Accordingly, the application was dismissed.

Appearances

Counsel for Applicant: Sunil Kumar, Chandan Singh, Narendra Singh

Counsel for Opposite Party: G.A.

Case title - Rajendra vs. State of U.P. and Another 2024 LiveLaw (AB) 83 [APPLICATION U/S 482 No. - 45953 of 2023]

Case citation: 2024 LiveLaw (AB) 83

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