Receipt of Cheque-Bounce Notice by Family Member Does Not Invalidate Service if Sent to Drawer’s Correct Address: SC

New Delhi, Oct 1 (KNN) The Supreme Court has held that a statutory demand notice under the Negotiable Instruments Act, 1881 cannot be treated as invalid merely because it was received by a family member of the cheque drawer, if it was dispatched by registered post to the drawer’s correct address.

A bench of Justices Ahsanuddin Amanullah and Manmohan set aside a Kerala High Court judgment that had overturned a cheque-bounce conviction solely because the notice was received by the drawer’s mother instead of him personally.

Notice To Correct Address Creates Presumption Of Service

The Court held that dispatch of the notice to the drawer’s correct address creates a rebuttable presumption of service. The drawer must then establish that the address was incorrect, that he had no knowledge of the notice, or that the postal endorsement was incorrect.

The complainant is not required to prove actual receipt or deliberate evasion once the statutory presumption arises, the Court said.

High Court Relied On Per Incuriam Judgment

The case arose from a Rs 3 lakh loan and a dishonoured cheque. The complainant sent the statutory notice on August 31, 2016, by registered post to the respondent’s correct address. It was received by his mother, Amina. The respondent neither made the payment nor replied to the notice.

The trial court convicted him on July 10, 2019, sentencing him to six months’ simple imprisonment and a Rs 3 lakh fine. The appellate court upheld the conviction on February 16, 2023.

The Kerala High Court later set aside the conviction under Section 397 CrPC, holding that the requirement under proviso (b) to Section 138 had not been met as the notice was received by the respondent’s mother.

The Supreme Court held that the High Court erred in relying on M.D. Thomas v. P.S. Jaleel (2009), which had similarly held that service on a family member was insufficient. The Court noted that the judgment had failed to consider the three-judge bench ruling in C.C. Alavi Haji v. Palapetty Muhammed (2007), which held that dispatch of notice to the correct address satisfies the requirement of ‘giving of notice’, subject to rebuttal by the drawer.

The Court accordingly held M.D. Thomas to be per incuriam.

Supreme Court Restores Conviction

The Court found that the respondent had subsequently appeared pursuant to summons served at the same address and had used the identical address in his vakalatnama, appeal and revision petitions. He had also not disputed the address in his Section 313 CrPC statement.

There was no claim that the respondent and his mother lived separately or that receipt of the notice by her could not reasonably have brought it to his knowledge.

Holding that the respondent had failed to rebut the presumption of service, the Supreme Court allowed the appeal and restored the conviction.

(KNN Bureau)