Demand Notice U/S 138 NI Act Sent Via Courier Service Is Valid; But Presumption Of Service Cannot Be Invoked: Allahabad HC

The Allahabad High Court in a case relating to cheque dishonourment, observed that the notice sent through courier service is valid under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), however for the benefit of presumption of service under Section 27 of the General Clauses Act, 1897, it must be sent through registered post.

The Court was dealing with an application filed to quash the summoning order as well as the entire proceeding of a case under Section 138 of NI Act, being pending before the Additional Civil Judge.

A Single Bench of Justice Arun Kumar Singh Deshwal held, “Therefore, considering the fact that the legislature has itself amended the C.P.C. in 2002 for service of summons through courier service and mode of service for written notice through courier service was not excluded by Section 94 of N.I. Act and the requirement in Section 138 N.I. Act is only written notice. Therefore, the notice sent through the courier service is valid service under Section 138 N.I. Act. However, for the purpose of getting the benefit of presumption of service under Section 27 of the General Clauses Act, notice must be sent through registered post.”

Advocate Nipun Singh appeared for the applicant while AGA Rajeev Kr. Singh appeared for the opposite parties.

In this case, it was submitted by the counsel for the applicant that service through courier cannot be deemed to be service under Section 138 N.I. Act because as per the said provision, notice must be sent through registered post. It was also submitted that though service through WhatsApp is permissible under Section 4 of the Information Technology Act, 2000 (IT Act), there is no provision providing the deemed service of the notice, sent through WhatsApp. He stated that there needs to be an amendment in Section 27 of the General Clauses Act to ensure that WhatsApp service is sufficient. It was further submitted that for effective service through WhatsApp, there must be process service rules as framed by the Bombay High Court, which is named "Bombay High Court Service of Processes by Electronic Mail Services Rules, 2017".

The following questions arose for determination before the High Court –

(i) whether the Court concerned has the authority to recall its order of dismissing the complaint for want of prosecution at the initial stage;

(ii) whether the conditional cheque, which was required to be produced after giving information to the drawer, will attract the offence under Section 138 N.I. Act after its dishonour if no information was given to the drawer of the cheque before the presentation of the same in the bank;

(iii) whether a written notice through courier service is valid notice under Section 138 N.I. Act and whether presumption of service under Section 27 of the General Clauses Act can be invoked for this notice;

(iv) whether service of notice through WhatsApp cannot be said to be effective service unless rules are framed prescribing the procedure for delivery of service.

The High Court after hearing the contentions of the counsel noted, “From the perusal of Rule 9(1) and (3) of Order V of C.P.C., it is clear that apart from registered post and speed post, courier service, which was approved by the Court, is also declared a valid service. However, the complaint proceeding under N.I. Act is quasi-civil in nature, which has the basic object of compensatory and not punitive, and the provision of Cr.P.C. has been adopted for a limited purpose; for expeditious disposal of complaints under Section 138 N.I. Act, but before filing a complaint, sending the demand notice is not part of the complaint proceeding under Section 138 N.I. Act. Therefore, the procedure of sending summons in criminal matters will not affect the demand notice sent under Section 138 N.I. Act before filing of the complaint.”

The Court said that in the case, though in the complaint it is mentioned that the notice was sent through speed post, the tracking report, as well as the receipt of sending the notice, shows that the notice was sent through courier service but this is a disputed question of fact that cannot be decided at this stage. It added that even otherwise, it is also mentioned in the complaint that the notice was also sent through WhatsApp on the mobile number of the applicant; therefore, as per Section 13 of the I.T. Act, prima facie service of notice is deemed to be sufficient on the date when the notice itself was sent through WhatsApp.

“Therefore, in this case, there is no need to invoke the presumption under Section 27 of the General Clauses Act for deemed service. However, the applicant can rebut this presumption during the trial. … So far as the fourth question, whether service of notice through WhatsApp cannot be said to be an effective service unless rules for service is prescribed, is concerned, this question is itself clear from Section 13 of the I.T. Act, which provides the date and time when the delivery of notice sent electronically will be presumed”, it observed.

The Court further emphasised that as far as the Bombay High Court Service of Processes by Electronic Mail Services Rules, 2017, is concerned, these rules are framed in the exercise of power under Order V Rule 9 C.P.C. for commercial courts, which is a civil proceeding, however, the process of sending demand notice under Section 138 of N.I. Act is not the part of any judicial proceeding but prior to initiation of a judicial proceeding.

The Court, therefore answered the questions as under –

(i) When the complaint under N.I. Act was dismissed for want of prosecution at the initial stage of issuing summons, then the Court concerned has the authority to recall the same and the bar of Section 362 Cr.P.C. will not be applied;

(ii) When a conditional cheque is presented before the bank without prior notice and dishonours, even then the liability under Section 138 N.I. Act will be attracted;

(iii) Notice of demand through courier service is valid service for Section 138 N.I. Act, but the presumption of service under Section 27 of the General Clauses Act cannot be invoked for the notice sent through courier till the amendment is made under Section 27 of General Clauses Act so as to include the courier service apart from registered post and;

(iv) Service of notice through WhatsApp under Section 138 N.I. Act will be deemed to be served as per the procedure of Section 13 of I.T. Act and no separate rule for prescribing the delivery of service is required.

The Court also took note of the fact that in several cases, the order sheets are being written by the concerned Court or concerned official in illegible handwriting, making it difficult to understand what they have written. Therefore, it directed to all the District Judges of U.P. to apprise all their subordinate judicial officers that while writing the order sheet, the order must be written in clearly legible handwriting, or it should be typed.

“Registrar (compliance) is directed to send a copy of this order to all the District Judges of Uttar Pradesh, who will apprise their subordinate judicial officers that the order sheet of the case should be written in neat and legible handwriting or typed form”, it ordered.

Accordingly, the High Court dismissed the application.

Cause Title- Rajiv Malhotra v. State of U.P. and Another (Neutral Citation: 2024:AHC:80741)

Appearance:

Applicant: Advocates Nipun Singh, Naman Agrawal, and Abhay Mani Tripathi.

Opposite Parties: AGA Rajeev Kr. Singh

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