The Supreme Court of India, comprising a Bench of Justice Ahsanuddin Amanullah and Justice Manmohan, has ruled that dispatching a statutory demand notice by registered post to the correct address of a cheque drawer satisfies the mandatory requirement under proviso (b) to Section 138 of the Negotiable Instruments Act, 1881, raising a rebuttable presumption of valid service even if received by a family member. Setting aside an acquittal order of the Kerala High Court, the Bench restored the conviction and sentence passed by the Trial Court, while holding that the coordinate Bench judgment in M.D. Thomas vs. P.S. Jaleel (2009) was rendered per incuriam for ignoring binding larger bench precedents.
Background of the Case
The dispute arose from a complaint filed under Section 138 of the Negotiable Instruments Act, 1881, by the appellant-complainant, Sainaba. According to the complaint, respondent No. 2 had borrowed Rs. 3,00,000 from the appellant and issued cheque bearing No. 479097 drawn on Catholic Syrian Bank, Perumbavoor Branch, towards repayment. Upon presentation, the cheque was dishonoured.
On 31st August 2016, the appellant dispatched a statutory demand notice through registered post to the correct address of respondent No. 2, which was received by his mother, Amina. Despite receipt of the notice at his address, respondent No. 2 neither paid the amount nor sent a reply. Consequently, the appellant filed a complaint (S.T. Case No. 114 of 2017). During his examination under Section 313 of the Code of Criminal Procedure, respondent No. 2 stated that he had borrowed Rs. 7,00,000 from the complainant in total, had repaid the entire amount, and had given a blank signed cheque while borrowing Rs. 3,00,000.
On 10th July 2019, the Trial Court convicted respondent No. 2 under Section 138 of the Act, sentencing him to six months of simple imprisonment along with a fine of Rs. 3,00,000, with a default stipulation. The Trial Court held that the complainant had complied with mandatory provisions by sending the notice to the correct address, noting that summons issued to the same address had secured the accused’s appearance. The Additional District & Sessions Judge dismissed respondent No. 2’s appeal on 16th February 2023, observing that the accused had not disputed the correctness of his address and that receipt by his mother constituted valid service.
However, in Criminal Revision Petition No. 865 of 2023, the High Court of Kerala set aside the conviction on 29th July 2025. The High Court reasoned that the statutory demand notice was received by the mother and that the complainant had not demonstrated that the accused was aware of its receipt. The appellant then approached the Supreme Court. Although notice from the Supreme Court was served upon respondent No. 2 on 11th December 2025, no one appeared on his behalf, leading the Court to hear the appeal.
Arguments of the Parties
Counsel for the appellant argued that the High Court’s order was contrary to established decisions of the Supreme Court, including C.C. Alavi Haji vs. Palapetty Muhammed (2007), D. Vinod Shivappa vs. Nanda Belliappa (2006), Madan & Co. vs. Wazir Jaivir Chand (1989), and Subodh S. Salaskar vs. Jayprakash M. Shah (2008). He submitted that dispatching a notice by registered post to the drawer’s correct address raises a statutory presumption of service under Section 27 of the General Clauses Act, 1897 and Section 114 of the Indian Evidence Act, 1872.
The appellant emphasized that respondent No. 2 never challenged the correctness of the address, appeared pursuant to court summons sent to the same address, and did not claim to live separately or have an inimical relationship with his mother. The appellant further contended that the High Court’s approach would reduce the efficacy of Section 138 by allowing drawers to evade liability simply by having family members accept notices, and that the High Court exceeded its revisional jurisdiction under Section 397 of the Cr.P.C. by re-appreciating concurrent findings of fact.
Counsel for the State of Kerala stated that the State was not a contesting party since the dispute pertained to cheque dishonour between private parties.
Court’s Analysis
Examining the statutory framework, the Bench noted proviso (b) to Section 138 of the Act, 1881, which requires the payee to demand payment by giving a notice in writing within thirty days of receiving dishonour information, and Section 27 of the General Clauses Act, 1897, which deems service to be effected where a letter is properly addressed, pre-paid, and posted by registered post.
The Court traced the doctrine of rebuttable presumption of valid service through landmark rulings:
- In K. Bhaskaran vs. Sankaran Vaidhyan Balan & Anr. (1999), the Court held that ‘giving of notice’ is distinct from ‘receipt of notice’, ruling that once sent to the correct address, service can be deemed effected unless the drawer proves non-service was not attributable to him.
- In D. Vinod Shivappa (2006), the Court affirmed this principle, noting that a dishonest evader cannot be allowed to clip an honest payee when a notice is returned unclaimed or due to absence.
- In the three-Judge Bench decision in C.C. Alavi Haji (2007), the Supreme Court held that there is no material difference between Section 27 of the General Clauses Act and Section 114 of the Evidence Act, and that a complainant need not separately aver deliberate evasion:
“In our opinion, therefore, when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. … It is then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect.”
The Court also highlighted the passage from C.C. Alavi Haji providing that a drawer claiming non-receipt can still pay within 15 days of receiving court summons along with the complaint:
“A person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the GC Act and Section 114 of the Evidence Act.”
Addressing the two-Judge Bench judgment in M.D. Thomas vs. P.S. Jaleel (2009), which had set aside a conviction because notice was served on the drawer’s wife, the Court referred to State of U.P. v. Synthetics and Chemicals Ltd. (1991) to explain the doctrine of per incuriam. The Bench observed:
“This Court is of the considered view that the judgment in M.D. Thomas (supra) was rendered by a coordinate Bench without reference to binding precedents of this Court on the presumption of service of notice under proviso (b) to Section 138 of the Act, 1881 and without any meaningful finding as to whether the wife-recipient was residing with the drawer-husband or whether the notice was dispatched to the correct address. Moreover, the Bench in M.D. Thomas (supra) erroneously treated the wife of the drawer as equivalent to an unrelated third party. If the notice was indeed sent to the correct address, the presumption under Section 27 of the General Clauses Act, 1897 and Section 114 of the Evidence Act, 1872 would necessarily be attracted, irrespective of the identity of the recipient.”
The Bench pointed out the anomaly created by M.D. Thomas, noting that under prior rulings a complainant enjoys the presumption of service when notice is dispatched to the correct address but not delivered at all, whereas under M.D. Thomas, delivery to a residing family member would deprive the complainant of that presumption. Holding the decision per incuriam, the Court ruled:
“Consequently, this Court holds that the judgment in M.D. Thomas (supra) is per incuriam and cannot be treated as binding precedent under Article 141 of the Constitution. Furthermore, if allowed to stand as precedent, M.D. Thomas (supra) would enable unscrupulous drawers to evade liability on specious pleas, thereby frustrating the object of the statute.”
Applying these principles to the facts, the Court found that respondent No. 2’s address was identical across the notice, court summons, Vakalatnama, appeal, and revision petition. Respondent No. 2 never disputed his address in his Section 313 Cr.P.C. examination nor claimed an inimical relationship with his mother. The High Court had fundamentally misread C.C. Alavi Haji and improperly shifted the burden of proof to the complainant.
Court’s Decision
The Supreme Court concluded that once notice was dispatched to respondent No. 2’s correct address, the statutory requirement of giving notice was satisfied, and the presumption remained unrebutted. The Supreme Court allowed the appeal, set aside the High Court’s judgment, and restored the Trial Court’s judgment sentencing respondent No. 2 to six months of simple imprisonment and a fine of Rs. 3,00,000, with the default stipulation.
Case Title: Sainaba v. State of Kerala & Anr.
Case No.: Criminal Appeal No. 4114 of 2026
Bench: Justice Ahsanuddin Amanullah and Justice Manmohan
Date: September 30, 2026
