The question
A cheque bounces. The payee sends a legal notice by registered post to the drawer’s home. The drawer is out, and his mother signs for it. He pays nothing and sends no reply. Later he says: “I never received any notice. My mother did.”
Does that stop a prosecution for cheque dishonour? On 30 September 2026 the Supreme Court answered this in Sainaba v. State of Kerala & Anr., 2026 LiveLaw (SC) 1005. The Bench was Justices Ahsanuddin Amanullah and Manmohan. [Date and citation as reported; see the sources file.]
What happened
As reported, a cheque of Rs 3 lakh was dishonoured. The payee sent the statutory demand notice by registered post to the drawer’s correct address. The drawer’s mother received it. The drawer neither paid nor replied.
The Trial Court convicted him and sentenced him to six months’ imprisonment and a fine of Rs 3 lakh. The appellate court upheld this. The Kerala High Court, in revision, set the conviction aside. Its reasoning: the notice was received by the mother, not the drawer, so the requirement of the proviso to section 138 was not met.
The Supreme Court allowed the appeal and restored the conviction and sentence.
The provision in plain words
Section 138 of the Negotiable Instruments Act, 1881 makes dishonour of a cheque for insufficiency of funds an offence. But a prosecution can succeed only if some steps are taken first. Under proviso (b), the payee must give notice in writing to the drawer, demanding the amount, within thirty days of getting information that the cheque was returned unpaid. Under proviso (c), the drawer then has fifteen days from receipt of that notice to pay. If he does not, the offence is complete.
The word in proviso (b) is “giving” of notice. The word in proviso (c) is “receipt”. That difference matters here.
What the Supreme Court held
As reported, the Court held that the requirement of “giving of notice” stands complied with once the notice is dispatched to the correct address. After that, it is for the drawer to rebut the presumption that the notice reached him.
The reported grounds on which a drawer can rebut are:
- that the notice was not sent to the correct address;
- that he had no knowledge of the notice having been brought to his address; or
- that the postal endorsement is incorrect.
On the facts, the Court noted that the drawer had never disputed the correctness of the address in his statement under section 313 of the Code of Criminal Procedure. There was also no case that he and his mother lived separately, or that their relationship was such that her receiving the notice could not reasonably bring it to his knowledge.
Precedent. The Court followed C.C. Alavi Haji v. Palapetty Muhammed (2007), a three-Judge Bench decision. It treated the later two-Judge decision in M.D. Thomas v. P.S. Jaleel (2009), where notice received by the drawer’s wife led to a different result, as per incuriam, because it did not consider Alavi Haji. In simple terms: a smaller Bench had not followed a larger Bench’s binding ruling, so the smaller Bench’s decision was not good law on this point.
What it means
- Dispatch to the correct address is the key step. A payee who sends the notice by registered post to the drawer’s right address has, on this reasoning, “given” notice.
- Receipt by a family member at that address does not, by itself, defeat the notice. The question is whether the notice reached the drawer’s address, not whose hand signed for it.
- The burden then moves to the drawer. He must show something concrete: wrong address, no knowledge, or a wrong postal endorsement. A bare statement that “my mother took it” is not one of those grounds.
- Address records matter. The drawer’s failure to dispute the address in his section 313 statement was noted. What address a person gives on a cheque, bank record or agreement can become important.
What it does not decide
- It does not say every notice is valid. The presumption can be rebutted, and a notice sent to a wrong address stands differently.
- It does not decide a case where the family member does not live at that address, or lives separately, or where the relationship makes it unlikely the drawer would learn of the notice. The Court noted those facts were absent here.
- It does not decide whether the cheque was issued for a legally enforceable debt, or any other element of section 138.
- It is a decision on its facts as reported. It does not predict the result of any other case. Reports of a Supreme Court judgment are not the judgment; the full text should be read.
FAQ
Is a cheque bounce notice valid if someone else in my house signs for it? On the reported reasoning in Sainaba, a notice dispatched to the correct address is treated as “given”, and receipt by a family member there does not by itself make it invalid. The drawer can still try to rebut the presumption.
Does the drawer have to receive the notice personally? As reported, the Court held that “giving” under proviso (b) is satisfied on dispatch to the correct address. Personal receipt is not the test.
What can a drawer show to rebut service? As reported: that the address was wrong, that he had no knowledge of the notice having been brought to his address, or that the postal endorsement is incorrect.
**What happened to M.D. Thomas v. P.S. Jaleel?** The Court is reported to have held it per incuriam for not following C.C. Alavi Haji.
This is general legal awareness, not legal advice. Legal outcomes depend on facts, documents, law, forum, evidence, limitation and judicial discretion — no outcome is guaranteed. Consult a qualified advocate on your own facts.
Adv. Prakhar Gupta — enrolled with the Bar Council of Rajasthan, Enrolment No. R/2196/2020. This page shares legal awareness/education only; it is not advertisement or solicitation of work.
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