DALMIA CEMENT (BHARAT) LTD. versus M/S. GALAXY TRADERS AND AGENCIES LTD. AND ORS.

Citation: [2001] 1 S.C.R. 461 · Decided: 19-01-2001 · Supreme Court of India · Bench: K.T. THOMAS · Disposal: Appeal(s) allowed

Judgment (excerpt)

DALMIA CEMENT (BHARAT) LTD. 
A 
v. 
M/S. GALAXY TRADERS AND AGENCIES LTD. AND ORS. 
JANUARY 19, 2001 
[K.T. THOMAS AND R.P. SETHI, JJ.] 
B 
Negotiable Instruments Act, 1881: Sections 138 and 142. 
Dishonour of cheque-Statutory notice demanding payment issued to 
drawer of cheque-But drawer denied receipt of notice-Cheque deposited C 
again for encashment but dishonoured-Second statutory notice demanding 
payment issued to drawer-As no payment was made complaint filed within 
period of limitation calculated from second notice-Drawer did not deny 
receipt of second notice-However, High Court quashed the complaint as it 
was barred by limitation calculated from first notice-Correctness of-Held: D 
Drawer tried to blow hot and cold denying receipt of first notice of dishonour 
and praying or dismissal of complaint on ground of limitation-Plea of 
drawer not only contradictory and afterthought but carved out to resist the 
lawful claim of drawer-Hence, High Court erred in quashing the complaint. 
Dishonour of cheque-Offence of-Ingredients-Held: Include receipt E 
of notice by accused under S. !38(b)-Giving of notice doe; not make the 
offence but the receipt of notice by accused which gives cause of action to 
file the complaint within the statutory period. 
General Clauses Act, 1897: S.27. 
Service of letter-Sent by post-Presumption of-Held: Is rebuttable-
Dispatcher may either accept the sendee 's stand that he has not received the 
notice or prove ·that he received the notice-Dispatcher can adopt either of 
the options-If he opts the former, he can take steps for effective service of 
notice. 
F 
G 
The cheque issued hy the respondents-accused to the appellant was 
dishonoured. The appellant gave a statutory notice to the respondents in 
terms of S.138(b) o( the Negotiable Instruments Act, 1881. However, the 
respondents sent a letter dated 20-6-1998 to the appellant intimating that 
they had received empty envelopes without any contents. The appellant H 
461 
462 
SUPREME COURT REPORTS 
[200 I] I S.C.R. 
A presented the cheque again to the bank and upon its dishonour gave a second 
statutory notice to the respondents, which was received by them on .. 
27-7-1998. As no payment was made the appellant filed a complaint under 
Section 142 of the Act before the Magistrate on 9-9-1998. The respondents 
filed a petition under Section 482 of the Code of Criminal Procedure, 1973 
B 
before the High Court for quashing the complaint on the ground that the 
same was barred by limitation with reference to the first notice. The High 
Court allowed the petition. Hence th;s appeal. 
"' 
Allowing the appeal, the Court 
c 
HELD: I. To constitute an offence under Section 138 of the Negotiable 
Instruments Act, 1881, the complainant is obliged to prove its ingredients, 
which include the receipt of notice by the accused under clause (b). It is not 
the 'giving' of the notice, which makes the offence, but it is the 'receipt' of 
-+ 
the notice by the drawer, which gives the cause of action to the complainant 
to file the complaint within the statutory period. 1456-D-E] 
D 
K. Bhaskaran v. Sankaran Vaidhyan Ba/an, (1999] 7 SCC 510, referred 
to. 
2. Section 27 of the General Clauses Act, 1897 deals with the 
..._ 
presumption of service of a letter sent by post. The dispatcher of a notice has, 
E therefore, a right to insist upon and claim the benefit of such a presumption. 
But as the p'l-esumption is a rebuttable one, he has two options before him. 
One is to concede the stand of the sendee that as a matter of fact he did not 
receive the notice, and the other is to contest the sendee's stand and take 
the risk for proving that he in fact received the notice. It is open to the 
F 
dispatcher to adopt either of the options. If he opts the former, he can afford • 
to take appropriate steps for the effective service of notice upon the addressee. 
Such a course has been adopted by the appellant-company in this case and 
the complaint filed, admittedly, within limitation from the date of the notice 
conceded to have been served upon the respondents. 1468-C-D( 
G 
Sadanandan Bhadran v. Madhavan Suni/ Kumar, (19981 6 SCC 514 
and STL Import, USA v. Exim Aides Silk Exporters, Bangalore, 1199914 SCC • 
567, referred to. 
3. The respondents have not denied the issuance of their letter dated 
20-6-1998. Despite admitting its contents, they opted to approach the High 
H Court for quashing the proceedings merely upon assumption, presumption 
DALMIA C

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