STOP PAYMENT ATTRACTS SEC 138 NIA
Service of notice - unclaimed
SERVICE OF NOTICE: UNCLAIMED/REFUSED- IMPACT The issue of whether a legal notice sent under Section 138 of the N.I. Act, 1881, is considered served when it is returned unclaimed but not refused has been addressed by various courts over time. This intriguing issue involves several factors, which can be understood as follows: A. Clause (b) of the proviso to Section 138 of the Act indicates that the payee has a statutory obligation to ‘make a demand’ by giving notice. The emphasis is on the necessity to ‘make a demand,’ and the legislature has prescribed the mode for making such a demand. The payee fulfills their obligation by dispatching the notice. Once dispatched, the responsibility shifts to the recipient. B. In the case of K. Bhaskaran vs. Sankaran Vaidhyan Balan and Anr (29 September 1999) , the notice issued under Clause (b) was returned unclaimed, not refused. The Court questioned whether there is a significant difference between the two regarding the presumption of service....
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