Allahabad High Court: NI Act Notice Valid If Sent by Registered Post to Right Address

Allahabad High Court: NI Act Notice Valid If Sent by Registered Post to Right Address

The Allahabad High Court has established that, in the usual course of business, a notice is considered as served if it can be verified that it was dispatched via registered post to the accurate address.

In addressing the matter of determining the date of service of a demand notice under the Negotiable Instruments Act, 1881, Justice Jyotsna Sharma asserted that in the present case, the trial court appeared to have made a legal presumption regarding the service of the demand notice.

“In my opinion, even if the track consignment report is not filed, the court may presume service of notice in the ordinary course of business, if it was shown that the same was sent by registered post on correct address,” Justice Jyotsna Sharma stated.

A complaint was lodged against the accused under Section 138 of the Negotiable Instruments (NI) Act, 1881. The lower court issued a summon to the accused under Section 138 of the NI Act. The evidence presented in the court consisted of a cheque worth ₹2,75,000, which was returned by the bank on April 2, 2019, with the notation "funds insufficient," along with the return memo and a demand notice dated February 22, 2019. The revising court upheld the trial court's decision and subsequently dismissed the revision.

Seeking relief from the High Court under Article 227 of the Indian Constitution, the petitioner argued that the complainant had failed to establish the service of the demand notice on the petitioner. Consequently, the petitioner contended that a vital requirement for the court to take cognisance, as stipulated under Section 138 clause (c) in conjunction with Section 142(1)(b) of the Negotiable Instruments Act, had not been met.

On the contrary, the respondent asserted that even though the exact date of the demand notice's receipt was not mentioned, the revisional authority had taken into account the postal department's consignment tracking report. Therefore, the order issued by the lower court should not be disputed.

Drawing from the precedent set by the Allahabad High Court in the case of Deepak Kumar and Another vs. State of U.P., it was established that while the date of notice receipt is crucial, it is not obligatory for any specific date concerning the receipt of the demand notice to be explicitly mentioned in the complaint. The day of receiving the demand notice can be reasonably inferred from the available documents and evidence on record.

Additionally, reference was made to the case of Ajeet Seeds Limited vs. K. Gopala Krishnaiah, in which the Supreme Court delved into the character of presumptions as outlined in Section 114 of the Evidence Act, in conjunction with Section 27 of the General Clauses Act, and their application when evaluating the issue of notice service under Section 138 of the Negotiable Instruments Act.

In that particular case, the Supreme Court had clarified that Section 114 of the Evidence Act empowers the Court to presume that, in the normal course of events, the communication would have been delivered to the addressee's address. Section 27 of the General Clauses Act establishes a presumption that notice service is considered accomplished when sent to the correct address via registered post. There is no necessity to include in the complaint an assertion that despite the notice being returned as unserved, it is deemed as served, or that the addressee is presumed to be aware of the notice. Unless and until the addressee provides evidence to the contrary, service of the notice is presumed to have occurred at the time when the letter would typically be delivered in the usual course of business.

Hence, in her decision to dismiss the case, Justice Sharma determined that, in the ordinary course of business, a notice is considered served when it has been demonstrated to have been dispatched via registered post to the correct address.