On 30 September 2026, a Supreme Court bench of Justice Ahsanuddin Amanullah and Justice Manmohan restored a conviction under Section 138 of the Negotiable Instruments Act, 1881, holding that a statutory demand notice sent to the drawer’s correct address is validly given even if a family member receives it. The judgment, authored by Justice Manmohan, is Sainaba v. State of Kerala (2026 LiveLaw (SC) 1005).
What was decided
The complainant had lent Rs 3 lakh and the borrower’s cheque was dishonoured. The demand notice was sent by registered post to the borrower’s correct address and was received by his mother. He neither paid nor replied. The trial court convicted him in 2019 and the appellate court confirmed it in 2023, but the Kerala High Court, in revision, set aside the conviction because the notice had not been served on him personally.
The Supreme Court held that the requirement of “giving of notice” is satisfied once the notice is dispatched to the correct address, raising a rebuttable presumption of service. The burden then shifts to the drawer to show, for instance, that the address was wrong or that he had no knowledge of the notice. Following the three-judge decision in C.C. Alavi Haji (2007), the Court held an earlier contrary decision to be per incuriam. The borrower had used the same address throughout the case and did not rebut the presumption. The Court also said a revisional court cannot reappraise evidence as if it were a second appeal.
Why it matters
Cheque bounce cases are among the most common proceedings faced by traders, contractors and company directors. Many defences rest on technical objections to service of the demand notice. This ruling makes such objections much harder where the notice went to the correct address.
For payees, it confirms that proper dispatch to the right address is sufficient. For drawers, it means notices received at home or at the office by family or staff should be treated as received, and the 15-day window to pay should be taken seriously.
Practical points
- Keep business and residential addresses updated with banks and counterparties.
- Treat any demand notice received by a family member or staff as received by you.
- If there is a genuine dispute about the debt, reply in writing within the notice period.
- Where payment is possible, settle within 15 days of receiving the notice to avoid the offence arising.
- Payees should send notices by traceable post to all known addresses and keep postal records.
Sources: LiveLaw, 1 Oct 2026.
For a confidential discussion on cheque bounce complaints and defence, see Criminal Defence and Bail.
General legal information only; not legal advice or solicitation.
