Cheque Bounce Notice Sent To Correct Address Valid Even If Received By Drawer's Mother: Supreme Court

The Supreme Court on Wednesday held that a statutory demand notice sent by registered post to the correct address of a cheque drawer satisfies the requirement under Section 138 of the Negotiable Instruments Act, 1881, even if the notice is received by the drawer's mother.

"This Court is of the considered view that once the notice was dispatched to the correct address of respondent No.2, the statutory requirement of 'giving of notice' under proviso (b) to Section 138 of the Act, 1881 stood satisfied. Since respondent No.2 failed to prove either that the address was incorrect or that he was unaware of the notice being delivered to his address or that his relationship with his mother was inimical, the presumption remained unrebutted. The High Court erred in reversing the concurrent findings of the Trial Court solely on the ground that the notice was not personally delivered to respondent No.2.", a division bench of Justices Ahsanuddin Amanullah and Manmohan held.

The Court set aside the Kerala High Court's July 29, 2025 judgment, which had reversed the concurrent findings of the Trial Court and Appellate Court on the ground that the demand notice was not personally served on the accused.

The ruling arose from a ₹3 lakh loan advanced by Sainaba, against which the accused issued a cheque drawn on Catholic Syrian Bank. After the cheque was dishonoured, Sainaba issued a statutory notice dated August 31, 2016 by registered post to his correct address, where it was received by his mother.

The Trial Court convicted him on July 10, 2019, sentencing him to six months' imprisonment and a ₹3 lakh fine. The appellate court upheld the conviction on February 16, 2023.

The accused challenged the conviction before the Kerala High Court, arguing that he had not personally received the statutory notice. The High Court accepted the contention and set aside the conviction, prompting Sainaba to approach the Supreme Court.

Before the Supreme court, the appellant argued that dispatch of the notice to the correct address raised a presumption of service under Section 27 of the General Clauses Act and Section 114 of the Evidence Act.

The Supreme Court affirmed the principle laid down in the case of D. Vinod Shivappa and C.C. Alavi Haji.

It reiterated that notice sent by registered post to the correct address raises a presumption of service. A complainant is not required to separately establish that the drawer deliberately avoided receiving the notice.

The Court also held that the judgment in M.D. Thomas v. P.S. Jaleel, which had treated receipt of notice by the drawer's wife as insufficient, was decided without considering binding precedents and was therefore per incuriam.

The presumption of service applies irrespective of the identity of the person receiving the notice at the correct address.

"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."

In the present case, the accused had not disputed the address to which the notice was sent. The same address appeared in his vakalatnama, appeal and revision petitions and he had appeared pursuant to summons served there. He also did not claim that he lived separately from his mother.

The Court held that once the notice was dispatched to the correct address, the statutory requirement of “giving of notice” stood satisfied. The accused had failed to rebut the resulting presumption, while the High Court had erred by requiring proof of personal delivery.

The Supreme Court accordingly allowed the appeal, set aside the Kerala High Court judgment. It restored the Trial Court's conviction and sentence of six months' simple imprisonment and a ₹3 lakh fine.

For Petitioner(s): Tom Joseph, AoR, Advocates Kumar Gaurav, Kristen Sleeth, Prashant Bhardwaj

For Respondent(s): Advocates Nishe Rajen Shonker, AoR, Zulfiker Ali P.S., AoR, Lebina