The Supreme Court has held that a statutory demand notice under Section 138 of the Negotiable Instruments Act, 1881 cannot be treated as invalid merely because it was received by a family member of the cheque drawer, provided that the notice was sent by registered post to the drawer’s correct address.

A bench comprising Justice Ahsanuddin Amanullah and Justice Manmohan set aside a Kerala High Court judgment which had overturned the conviction of a cheque drawer on the ground that the statutory notice had not been personally received by him. The notice in question had been received by his mother, who was residing at the address furnished by the drawer.

Notice Sent To Correct Address Creates Presumption Of Service

The Supreme Court held that once a demand notice is dispatched by registered post to the correct address of the drawer, a rebuttable presumption of service arises.

The Court observed that the requirement of “giving of notice” under Section 138 stands satisfied when the notice is dispatched to the correct address. The burden then shifts to the drawer to rebut the presumption by showing that:

• the address was incorrect;
• he had no knowledge of the notice having reached his address; or
• the postal endorsement was incorrect.

₹3 Lakh Loan Was At The Centre Of Dispute

The case arose from a complaint concerning a ₹3 lakh loan advanced by the complainant to the respondent. The cheque issued towards repayment was dishonoured.

The complainant subsequently issued a statutory demand notice dated 31 August 2016 by registered post to the respondent’s correct address. The notice was received by his mother, Amina.

Despite receipt of the notice, the respondent neither made the payment nor replied to the demand notice.

The Supreme Court consequently restored the proceedings against the cheque drawer, holding that personal receipt of the notice by the drawer is not an indispensable requirement where the notice has been properly dispatched to his correct address.

Case Details:-

Citation:- 2026 INSC 1069

SAINABA VERSUS STATE OF KERALA & ANR.

Representation:-

For Petitioner(s):- Mr. Tom Joseph, AoR Mr. Kumar Gaurav, Adv. Ms. Kristen Sleeth, Adv. Mr. Prashant Bhardwaj, Adv.

For Respondent(s) :- Mr. Nishe Rajen Shonker, AoR Mr. Zulfiker Ali P.S., AoR Ms. Lebina, A