Madras High Court · 2025

CRL.A(MD).No. 203 of 2023bank, Pudupatti Branch, but the cheque was returned as account closed vide bankers memo, dated 09.03.2022. Hence, the complainant sent a legal notice, dated 11.03.2022 demanding the accused to pay the amount covered by the cheque, but the legal notice was returned as unclaimed. The accused having knowledge about the issuance of the legal notice, neither sent any reply nor complied with the notice demand. Hence, the complainant was constrained to file the above complaint for the alleged offence under Section 138 and 142 of Negotiable Instruments Act. 5. The learned Judicial Magistrate, upon receiving the complaint, recorded the sworn statement of the complainant and on perusing the records, upon satisfied that there existed a prima facie case took the case on file in S.T.C.No.66 of 2022 for the offence under Section 138 of Negotiable Instruments Act and ordered for issuance of summons to the accused. After appearance of the accused, copies of the records were furnished to him under Section 207 of Cr.P.C., on free of cost. When the accused was questioned about the offence alleged against him, he denied the commission of offence and pleaded not guilty. 3/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 20236. During trial, the complainant examined herself as P.W.1 and exhibited 4 documents as Ex.P.1 to Ex.P.4. The accused adduced neither oral nor documentary evidence. 7. The learned Judicial Magistrate, upon considering the evidence both oral and documentary and on hearing the arguments of both the sides, passed the impugned judgment, dated 02.11.2022 holding that the complainant has not proved the offence under Section 138 of Negotiable Instruments Act as against the accused beyond reasonable doubt, acquitted him under Section 255(1) of Cr.P.C. Aggrieved by the impugned judgment of acquittal, the complainant has preferred the present appeal. 8. Whether the impugned judgment of acquittal passed in S.T.C.No.66 of 2022, dated 02.11.2022 on the file of the learned Judicial Magistrate, (FTC), Uthamapalayam, is liable to be set aside? is the point for consideration. 9. Before proceeding further, it is necessary to refer Section 118 (a) and 139 of the Negotiable Instruments Act, which deal with the statutory presumption. 4/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023“118. ... (a) of consideration ; that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration ;139.Presumption in favour of holder. It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.” 10. It is the specific case of the complainant that the accused having acquaintance with the complainant borrowed a sum of Rs.5 lakhs on 02.01.2022 to meet out his urgent family expenses and to clear the sundry debts and issued a post dated cheque dated 02.02.2022 under Ex.P.1 drawn on Axis Bank, Cumbum Branch requesting the complainant to present the cheque on that date and get the amount; that the complainant presented the cheque on 08.03.2022 through his Tamil Nadu Grama Bank, but the cheque was returned as account closed vide bankers memo, dated 09.03.2022 under Ex.P.2; that the complainant sent a legal notice, dated 11.03.2022 under Ex.P.3, directing the accused to pay the amount covered by the cheque; that the accused, having knowledge about the issuance of cheque, managed to 5/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023return the postal cover as unclaimed under Ex.P.4 and that since the accused has not paid the cheque amount within time stipulated, the complainant was forced to file the above complaint. 11. Admittedly, the accused has not sent any reply notice in response to the Ex.P.3/statutory notice. The defence of the accused, as evident from the cross examination evidence of complainant/P.W.1 is that the accused had obtained loan from the complainant's father several years back by issuing cheques; that though the accused had discharged the loan, complainant's father has not returned the cheques; that one of the cheque given to the complainant's father was misused and the above case came to be filed; that the complainant had no means to advance such a loan to the accused and that the accused never borrowed any amount from the complainant nor issued any cheque to her. 12. As rightly contended by the learned counsel for the complainant, it is evident from the cross examination made by the defence that the accused has admitted that Ex.P.1 cheque was belonging to him and also the signature found in Ex.P.1 cheque. But according to him, a blank cheque was issued to the complainant's father and though the loan was repaid, the complainant's father has not returned the cheque. 6/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 202313. It is pertinent to mention that the complainant as P.W.1 has given evidence reiterating the complaint contentions and depose about the liability of the accused, issuance of the cheque therefor, dishonor of cheque, issuance of statutory notice and the failure of the accused to pay the amount within stipulated time. On considering the evidence of P.W.1 and also the admission of the accused that Ex.P.1 cheque was also belonging to him and taking note of its finding with regard to the accused signature in Ex.P.1 cheque, the learned Magistrate has rightly drawn a presumption under Section 118 and 139 of Negotiable Instruments Act. 14. The learned counsel for the complainant would rely on a decision of the Hon'ble Supreme Court in the case of Rangappa Vs. Sri Mohan reported in (2010) 11 SCC 441, and the relevant portion is extracted hereunder : 28.In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is 7/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own. 29. Coming back to the facts in the present case, we are in agreement with the High Court's view that the accused did not raise a probable defence. As noted earlier, the defence of the loss of a blank cheque was taken up belatedly and the accused had mentioned a different date in the `stop payment' instructions to his bank. Furthermore, the instructions to `stop payment' had not even mentioned that the cheque had been lost. A perusal of the trial record also shows that the accused appeared to be aware of the fact that the cheque was with the complainant. Furthermore, the very fact that the accused had failed to reply to the statutory notice under Section 138 of the Act leads to the inference that there was merit in the complainant's version. Apart from not raising a probable defence, the appellant-accused was not able to contest the existence of a legally enforceable debt or liability.15. No doubt, the presumptions available under Section 118 and 139 of the Negotiable Instruments Act are always rebuttable in nature. It is 8/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023settled law that the accused in order to rebut the presumption drawn in favour of the complainant under Section 118 and 139 of Negotiable Instruments Act, is not required to adduce any evidence and he can very well prove his probable defence through evidence adduced by the complainant and that the standard of proof required is of preponderance of probabilities.16. The learned counsel for the accused would submit that the complainant in her cross examination would admit that she had no direct acquaintance with the accused; that her father had filed several cases before the said Court and that she has not mentioned about the rate of interest agreed for the loan advanced to the accused. He would further submit that the complainant in her cross examination has stated that the cheque was issued by the accused on 02.02.2022, whereas in the complaint as well as in her chief examination, has stated that the cheque was issued on 02.01.2022, date of borrowal. 17. He would further submit that the complainant in her evidence would admit that she had pledged her jewels and obtained a loan of Rs.5 lakhs and that the said amount was given to the accused, but admittedly, she has not furnished any particulars nor produced any 9/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023documents to show the alleged pledging of jewels made by her. The learned counsel would further submit that the complainant has stated that since the accused is her neighbor, she advanced the loan amount, which is contrary to her stand in the complaint. He would also submit that the learned trial Judge, considering the above evidence of P.W.1, has rightly held that the complainant has not proved her case. 18. As rightly contended by the learned counsel for the complainant, the learned trial Judge by referring to the evidence of the complainant here and there and commented on the conduct of the complainant. No doubt, P.W.1/complainant in her cross examination would admit that she had no direct acquaintance with the accused, but as rightly pointed out by the learned counsel for the complainant, the complainant in her complaint as well as in the chief examination affidavit has stated that she came to know about the accused, who belongs to her native place, through her father. 19. P.W.1 would say “vdf;F jpUkzk; Mfptpl;lJ vd;why; rupjhd;. vdJ fztUld; jhd; trpj;J tUfpNwd;. ve;j gof;ftof;fj;jpd; mbg;gilapy; gzk; nfhLj;Njd; vd;W Fwpg;gpl;Ls;Nsdh vd;why; gf;fj;JtPl;Lf;fhuu; vd;W 10/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023Fwpg;gpl;Ls;Nsd;. vdf;F vjpup Neupilahf gof;fk; fpilahJ vd;why; rupjhd;. vdJ mg;gh vd;d njhopy; nra;fpwhu; vd;why; muprp tpahghuk; nra;fpwhu;. vdJ mg;ghtpw;F tl;bf;F gzk; nfhLf;Fk; gof;fk; cz;L vd;why; rupay;y. .....vjpupf;F nfhLj;j gzj;jpw;F tl;b tpfpjk; gw;wp tof;fpy; Fwpg;gpltpy;iy vd;why; rupjhd.; vjpup vd;dplk; vq;F itj;J ve;j Njjpapy; vj;jid kzpf;F fld; thq;fpdhu; vd;why; fk;gj;jpy; cs;s vd; tPl;by; itj;J 02.01.2022 md;W gfy; 12 kzpf;F thq;fpdhu;. Nkw;gb tpraj;ij vdJ Gfhupy; Fwpg;gpl;Ls;Nsdh vd;why; Fwpg;gpl;Ls;Nsd;. vjpup vd;iwa Njjpapy; fhNrhiy nfhLj;jhu; vd;why; 02.02.2022 md;W nfhLj;jhu;. vjpup nfhLj;j fhNrhiy vz; vd;d vd;why; 024302. vd;dplk; fhl;lg;gLk; k.rh.M.1 fhNrhiy vjpup nfhLj;jJ jhd;. me;j fhNrhiyia vjpup G+u;j;jp nra;J nfhLj;jhuh vd;why; G+u;j;jp nra;Jjhd; nfhLj;jhu;......&.5 yl;rk; njhif vg;gb te;jJ vd;why; vd;Dila eifia mlF itj;J fpilj;jJ. Nkw;gb eifia mlFitj;jjw;fhd Mtzj;ij ePjpkd;wj;jpy; jhf;fy; nra;Js;Nsdh vd;why; ,y;iy. 20. During subsequent cross examination P.W.1 would say,“ehd; ve;j Njjpapy; eiffis mlF itj;Njd; vd;why; Qhgfkpy;iy. &.5 yl;rk; gzk; vjphp;f;F nfhLg;gjw;fhf vj;jid 11/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023gTd; eiffis mlF itj;Njd; vd;why; 20 gTd; eifia mlF itj;Njd;. mlF itj;j eiffSf;F tl;b nrYj;JfpNwdh vd;why; nrYj;JfpNwd;. mlkhdk; itj;J eiffSf;F tl;b nrYj;jf;$ba epiyapy; vjpupf;F vg;gb ifkhw;Wf; fld; nfhLf;fKbAk; vd;why; xU khjj;jpy; jpUg;gp jUtjhf nrhd;djhy; gzk; nfhLj;Njd;. ...... vjpup vdJ jfg;gdhUf;F vg;gb gof;fk; vd;why; gf;fj;J tPl;Lf;fhuu; vd;w Kiwapy; gof;fk;. gf;fj;J tPL vd;why; mLj;j njUtpy; trpf;fpwhu;. ehd; fld; nfhLj;jjhf nrhy;yg;gLk; gzk; vj;jid &.500> &.1000> &.2000 Nehl;Lf;fs; ,Ue;jJ vd;why; vy;yhk; &.500 fl;Lf;fs;.21. As rightly contended by the learned counsel for the complainant, the complainant gave cogent evidence supporting her complaint. Though the accused claimed the cheque issued to the complainant's father was misused, they failed to elicit anything favorable during P.W.1's cross examination, except putting suggestions. 22. The learned counsel for the accused would submit that there are differences in Ex.P.1 cheque writings, but P.W.1 denied this in cross examination. 12/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 202323.According to the defence, the blank cheque was misused and filled up by the complainant and on that basis, the above case came to be filed. At this juncture, it is necessary to refer the decision of this Court in Padmavathy Vs. M/s Sri Balaji Networks in Crl.R.C.(MD)No.523 of 2023, dated 30.06.2023, while dealing with the scope of Section 20 of the Negotiable Instruments Act, has observed as follows: “7. The learned Counsel for the complainant would submit that as per Section 20 of the Negotiable Instruments Act, the holder of the cheque either by himself or through any third party can very well fill up the blank cheques and it is necessary to refer Section 20 of the Negotiable Instruments Act hereunder for better appreciation; “Inchoate stamped instruments : Where one person signs and delivers to another a paper stamped in accordance with law relating to negotiable instruments then in force in India, and either wholly blank or having written thereon an in complete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument in the capacity in which he signed the same, to nay holder in due 13/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023course for such amount; provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount instead by him to be paid to thereunder.” 8. As per Section 20 of the Negotiable Instruments Act, the holder in the due Course has every authority to complete the stamped instruments i.e., blank pronote and bill of exchange, delivered to him after properly signing therein by the maker of the instruments and as such Section 20 of the Negotiable Instruments Act, will have no application to the blank cheques issued after signing by the drawer. But, at the same time, there is no law which mandates that the cheque shall be filled up by the drawer himself. Similarly, if a drawer of a cheque gives authority to the payee or holder in due course to fill up the cheque signed by him, then the payee or holder in due course can very well fill up the blank cheque by themselves or through a stranger / third party, as there is no bar for the drawer of the cheque to give authority to the third person to fill up the cheque signed by him for the purpose of negotiating the same. 9. The learned Counsel for the revision petitioner/accused has relied on the decision of the Division Bench of the Hon'ble Supreme Court in T.Nagappa Vs. Y.R.Muralidhar reported in 2008(2) Crimes 219 (SC) and the relevant passages are extracted hereunder: “ Code of Criminal Procedure 1973 – Section 243(2) r/w Article 21 of the Constitution of India – An accused has a right 14/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023to fair trial and to adduce evidence for that purpose – Ordinarily an accused should be allowed to approach the court for obtaining its assistance with regard to summoning of witnesses etc. Negotiable Instruments Act 1881 – Section 20 – Only a prima facie right, that too conditional, had been conferred upon the holder of the negotiable instrument – Request of the appellant for referring the cheque to Forensic examination was bona fide.” 10. At this juncture, it is necessary to refer the recent judgment of the Hon'ble Supreme Court in Oriental Bank Of Commerce vs Prabodh Kumar Tewari reported in 2022 Live law SC 714, wherein it has been held as follows: “ Negotiable Instruments Act, 1881 – Sections 138, 139 - A drawer handing over a cheque signed by him is liable unless it is proved by adducing evidence at the trial that the cheque was not in discharge of a debt or liability. The evidence of a handwriting expert on whether the respondent had filled in the details in the cheque would be immaterial to determining the purpose for which the cheque was handed over. Therefore, no purpose is served by allowing the application for adducing the evidence of the hand-writing expert. The presumption which arises on the signing of the cheque cannot be rebutted merely by the report of a hand-writing expert. Even if the details in the 15/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023cheque have not been filled up by drawer but by another person, this is not relevant to the defense whether cheque was issued towards payment of a debt or in discharge of a liability.” 11. In that decision, another judgment of the Three Judges Bench of the Hon'ble Supreme Court in Kalamani Tex Vs. Balasubramanian reported in 2021(5) SCC 283 was referred and wherein the Hon'ble Apex Court has reiterated the legal position settled in Bir Singh Vs. Mukesh Kumar reported in (2019)4 SCC 197, wherein it has been held as follows: “14. In Bir Singh v. Mukesh Kumar, after discussing the settled line of precedent of this Court on this issue, a two-Judge Bench held: 33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. 34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the 16/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023cheque was not in discharge of a debt or liability by adducing evidence. […] 36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. (emphasis supplied)” 12. The above decisions are clearly applicable to the case on hand. In the present case, according to the petitioner, she has not written the contents of the cheque. As already pointed out, since it is not mandatory for the drawer to fill up the entire instrument by himself, no useful purpose would be served, if the disputed cheques are sent for expert opinion. Even assuming for argument sake, that the expert gives his opinion that the writings found in the cheque are not that of the petitioner, that by itself would not advance the case of the petitioner further. A drawer who signs a cheque and hands it over to the payee is presumed to be liable unless the drawer adduces evidence to rebut the presumption that the cheque has been issued towards payment of a debt or in discharge of a liability and that the cheque presumption arises under Section 138 of the Negotiable Instruments Act. Section 139 of the said Act mandates that it shall be presumed, unless the contrary is proved, that the holder of a cheque received it for the discharge, in whole or in part, of 17/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023any debt or other liability. In case if the accused is able to raise a probable defence which creates doubts about the existence of a legally recoverable debt or liability, the prosecution can fail. The standard of proof for rebuttal of presumption under Section 139 of the Negotiable Instruments Act is guided by preponderance of probabilities. For deciding the above, the fact that the details in the cheque have been filled up not by the drawer, but by some other person, would be immaterial.” 24. Even assuming that the cheque contents were not filled by the accused, it is irrelevant. 25. At this juncture, it is necessary to refer the judgment of Hon'ble Supreme Court in the case of Rohitbhai Jivanlal Patel Vs State of Gujarat and another reported in 2019 18 SCC 106, wherein the Hon'ble Apex Court has observed that when such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not and the relevant passages are extracted hereunder : ‘18. In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court 18/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant- accused. The aspect relevant for consideration had been as to whether the appellant-accused has brought on record such facts/material/circumstances which could be of a reasonably probable defence. ......20. Hereinabove, we have examined in detail the findings of the trial court and those of the High Court and have no hesitation in concluding that the present one was clearly a case where the decision of the trial court suffered from perversity and fundamental error of approach; and the High Court was justified in reversing the judgment of the trial court. The observations of the trial court that there was no documentary evidence to show the source of funds with the respondent to 19/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in the know of facts, etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not. The other observations as regards any variance in the statement of complainant and witness; or want of knowledge about dates and other particulars of the cheques; or washing away of the earlier cheques in the rains though the office of the complainant being on the 8th floor had also been irrelevant factors for consideration of a probable defence of the appellant.” 20/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 202326.As rightly contended by the learned counsel for the complainant, without rebuttal, the questions asked during the cross-examination, now relied by the defence, considering the legal position referred above, are totally irrelevant.27.The learned counsel would then rely on the decision of the Hon'ble Supreme Court in Rajesh Jain Vs. Ajay Singh reported in (2023) 10 SCC 148, wherein also the accused did not respond to the statutory notice, the Hon'ble Supreme Court has observed as follows : “46. The accused has neither replied to the demand notice nor has led any rebuttal evidence in support of his case. The case set up by him needs to be drawn from the suggestions put during the cross examination and from his reply given in the statement recorded under Section 313 of Cr.P.C....52. ... The accused has also not explained as to why he has not set up his defense at the earliest point, that is, at the stage of receiving the demand notice, even though he admits having received the demand notice in his 313 statement, yet he makes a suggestion to the complainant in his cross examination that no legal notice had been issued. The theory of 'blank cheque' being misused has been suggested, only to be denied by 21/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023both, the complainant and Gita Sunar-CW-3. No action has been taken by way of registering a police complaint in order to prosecute the alleged illegal conduct of his blank cheque having been misused by CW-3.53.Nothing significant has been elicited in the cross-examination of the complainant to raise any suspicion in the case set up by the complainant. Other than some minor inconsistencies, the case of the complainant has been consistent throughout as can be noticed from a perusal of the complainant, demand notice and affidavit evidence. In fact, the signature on the cheque having not been disputed, and the presumption under Sections 118 and 139 having taken effect, the complainant's case stood satisfied every ingredient necessary for sustaining a conviction under Section 138. The case of the defence was limited only to the issue as to whether the cheque had been issued in discharge of a debt/liability. The accused having miserably failed to discharge his evidential burden, that fact will have to be taken to be proved by force of the presumption, without requiring anything more from the complainant.....61.The fundamental error in the approach lies in the fact that the High Court has questioned the want of evidence on the part of the complainant in order to support his allegation of having extended loan to the accused, when it ought to have instead concerned itself with the case set up by the accused and 22/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023whether he had discharged his evidential burden by proving that there existed no debt/liability at the time of issuance of cheque.28. In the case on hand also, as rightly pointed out by the learned counsel for the complainant, the accused has not taken a defence that statutory notice was not sent to him. As already pointed out, legal notice was returned as unclaimed. 29. At this juncture, it is necessary to refer the judgment of the Hon'ble Supreme Court in K.Bhaskaran Vs. Sankaran Vaidhyan Balan and another reported in 1999 Supp(3) SCR 271, wherein the Hon'ble Apex Court has dealt with service of statutory notice contemplated under Section 138 of the Negotiable Instruments Act and the relevant passages are extracted hereunder: “It is well settled that a notice refused to be accepted by the addressee can be presumed to have been served on him, [vide Harcharan Singh v. Smt. Shivrani and Ors., [1981] 2 SCC 535, and Jagdish Singh v. Natthu Singh, [1992] 1 SCC 647.] Here the notice is returned as unclaimed and not as refused. Will there be any significant different between the two so far as the presumption of service is concerned? In this connection a reference to Section 27 of 23/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023the General Clauses Act will be useful. The Section reads thus : "27. Meaning of service by post. - Where any central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression `serve' or either of the expressions `give' or `send' or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post" No doubt Section 138 of the Act does not require that the notice should be given only by `post'. Nonetheless the principle incorporated in Section 27 (quoted above) can profitably be imported in a case where the sender has despatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such non service. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice. Thus, when a notice is returned by the sendee as unclaimed such date would be the commencing date in 24/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023reckoning the period of 15 days contemplated in clause (c) to the proviso of Section 138 of the Act. Of course such reckoning would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to his address. In the present case the accused did not even attempt to discharge the burden to rebut the aforesaid presumption.” 30. It is also necessary to refer the judgment of the three Judges Bench of the Hon'ble Supreme Court in C.C.Alavi Haji Vs. Palapetty Muhammed and another reported in AIR 2007 SC (SUPP) 1705, wherein the Hon'ble Apex Court while answering the reference pertaining to the question of service of notice in terms of Clause (b) of proviso to Section 138 of the Negotiable Instruments Act, has held as follows: “Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further 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. 25/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023This Court has already held that when a notice is sent by registered post and is returned with a postal endorsement refused or not available in the house or house locked or shop closed or addressee not in station, due service has to be presumed. [Vide Jagdish Singh Vs. Natthu Singh; State of M.P. Vs. Hiralal & Ors. and V.Raja Kumari Vs. P.Subbarama Naidu & Anr. ] It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved.” 30. Considering the above, as rightly contented by the learned counsel for the complainant, Ex.P.3 legal notice is deemed served on the accused. Admittedly, it is not the case of the accused that he was not having any knowledge about sending of notice or the address shown in the postal cover was incorrect or the postal letter was never tendered or the postal report was erroneous. 31. As rightly contended by the learned counsel for the complainant, since the accused failed to reply to the statutory notice, the same leads to 26/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023inference that there was merit in the complainant's version. The Hon'ble Supreme Court in Ashok Singh Vs. State of Uttar Pradesh and another reported in 2025 SCC Online 706, reaffirmed that once the drawer admits to signing the cheque, the presumption under Section 139 of the Negotiable Instruments Act, cannot be rebutted merely by questioning the complainant's debt-giving capacity, especially when such a defence was not raised in the reply notice by the accused. The Hon'ble Supreme Court has observed that onus is not on the complainant at the threshold to prove his capacity/financial wherewithal to make the payment in discharge of which the cheque is alleged to have been issued in his favour. 32. As rightly pointed out by the learned counsel for the complainant, the complainant in her evidence has stated that since the accused had agreed to return the amount within a month and since the accused was a known person to her father, she advanced the loan amount by pledging her jewels. Though the complainant admitted to lodging a maintenance claim against her husband, a Village Administrative Officer, this alone does not prove she lacked the financial capacity to lend the loan. 27/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 202333. Except putting suggestions, the accused failed to elicit anything in favour of her defence to rebut the presumption drawn under Section 118 and 139 of NI Act. The learned Magistrate, did not draw these statutory presumptions and instead selectively referring to some lines, leading to a perverse finding that the complainant failed to prove the offence under Section 138 of NI Act, which is liable to be set aside. 34. Considering the evidence available on record, the accused miserably failed to rebut the presumption drawn in favour of the complainant under Sections 113 and 138 of Negotiable Instruments Act. In the absence of any such rebuttal, shifting the burden to the complainant does not arise. Hence, this Court concludes that the impugned judgment of acquittal is liable to be set aside and that the accused is guilty of committing an offence punishable under Section 138 of the Negotiable Instruments Act.35. Now turning to the punishment to be awarded, the Hon'ble Supreme Court in M/s Meters and Instruments Private Limited and another Vs. Kanchan Mehta reported in (2017)3 MWN (Crl) DCC 161 SC, has observed that the offence under Section 138 of the Negotiable Instruments Act related to a civil wrong and the same was a regulatory 28/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023offence and that the object was described as punitive as well as compensatory. It is very much clear that the intention of the provision is not only to punish the accused, but at the same time, the aggrieved party is to be compensated. 36. Taking into account the nature of the offence and the cheque amount, the accused is sentenced to pay a fine of Rs.10,00,000 (twice the cheque amount) within a period of two months from the date of receipt of copy of this judgment, in default, to undergo simple imprisonment for 6 months. Upon payment, the trial court shall disburse the fine as compensation to the complainant under Section 357 Cr.P.C.37. The Criminal Appeal is accordingly allowed. 28.11.2025NCC :Yes / NoIndex :Yes / NoInternet :Yes / Nodas29/30 https://www.mhc.tn.gov.in/judis CRL.A(MD).No. 203 of 2023K.MURALI SHANKAR,J.dasTo1.The Judicial Magistrate, (FTC) Uthamapalayam, Theni District.2.The Section Officer, Criminal Section (Records), Madurai Bench of Madras High Court, Madurai. Pre-delivery order made inCRL.A(MD).No. 203 of 202328.11.202530/30