Cheque Dishonor | If Accused Pleads Non-Service Of Notice U/S 138 NI Act, Burden Shifts On Complainant To Prove Knowledge: Kerala High Court

The Kerala High Court has reiterated that the service of notice on relative of accused, raising demand on dishonour of cheque, is not sufficient to initiate proceedings under Section 138 of the Negotiable Instruments Act, unless it is shown that accused had knowledge of such notice.In doing so the court reaffirmed the law on service of notice under section 138 as laid down by the high court in Saju v Shalimar Hardware (2025). While allowing the accused's plea against conviction for cheque dishonour Justice P.V. Kunhikrishnan observed: "If the accused challenges the non-receipt of notice, the burden shifts to the complainant to prove at least the knowledge of the notice to the accused...In the light of the above discussion, I see no reason to reconsider the dictum laid down by this Court in Saju's case (supra)...This Court perused the evidence adduced by the complainant, who was examined as PW1. A specific question was put to the complainant in the chief examination to the effect that Ext.P3 is not a legal notice and the same was not received by the accused. He indeed denied the same, but Ext.P5 is the postal acknowledgement card. As per the postal acknowledgement card, notice is received by one 'Amina'. The complainant in the re-examination deposed that Ext.P3 notice was sent to the correct address of the accused, and in Ext.P5, the notice was received by the mother of the accused, who is 'Amina'. But in the further cross-examination by the accused, PW1 denied the suggestion that 'Amina' is the sister of PW1. But, she only states that notice was sent, and she has no case that the accused is aware of the receipt of notice by 'Amina'. Unless there is evidence to show that the accused is aware of the notice sent by the complainant, this Court cannot conclude that notice is served to the accused".The court said that if the complainant had deposed that even though notice is served to the person named 'Amina' and the accused is aware of the same, the burden would shift back to the accused to prove that he was not aware. However in the present matter, the court noted, the complainant did not state that the accused was aware of the receipt of notice by 'Amina'. "It is proved beyond reasonable doubt, in the light of Ext.P5, that 'Amina' received the notice. In such circumstances, I am of the considered opinion that there is no service of notice to the accused, and it is served to another person and there is no evidence to show that the accused was aware of the service of notice to the 3rd person. In the light of the same, the principle laid down by this Court in Saju's case (supra) is squarely applicable in this case also," the court added.BackgroundThe complainant alleged that the accused had borrowed Rs. 3 Lakh from the complainant, and to discharge the debt, the accused issued a cheque. When the cheque was presented, it was dishonoured for want of sufficient funds. Though the complainant issued a lawyer notice, the accused did not pay the amount. Hence, the complaint was filed. The complainant herself was examined as PW1. After going through the evidence and documents, the trial court found that the accused committed the offence under Section 138 of the NI Act, and he was sentenced to undergo simple imprisonment for a period of six months and to pay a fine of Rs. 3 Lakh. Aggrieved by the conviction and sentence, the accused filed an appeal before the Sessions Court which confirmed the conviction and sentence. Against this accused moved the high court. The counsel for the accused relied on high court's judgment in Saju's case and submitted that the statutory notice under Section 138 (b) of the NI Act was not served on the accused but served to another person. The Counsel for complainant submitted that the dictum laid down by the court in Saju's case must require reconsideration since the high court has not considered the principle 'giving notice' laid down by the Supreme Court in Vinod Shivappa v Nanda Belliappa (2006), CC Alavi Haji v Palapetty Muhammed and Anr (2007), M/S Indo Automobiles v Jai Durga Enterprises and Ors (2008) and two decisions of the Kerala High Court in Komala Unnikrishnan v Manoj Kumar K (2023) and Sarath C v Muthhot Leasing and Finance Ltd. (2024). Relying on Vinod Shivappa, the complainant's counsel for the complainant contended that, if notice is sent at the correct address, there is a presumption in favour of the complainant that the notice is served. Therefore, once the complainant proves that notice is sent to the accused at the correct address, the accused cannot contend that he has not received the notice.FindingsThe high court distinguished the precedents cited by the complainant and affirmed the correctness of the earlier ruling in Saju's case, wherein it was held that mere delivery of notice to a third party—without evidence of the accused's knowledge thereof—does not satisfy the mandatory requirement of “giving notice” under Section 138(b) NI...

Cheque Dishonor | If Accused Pleads Non-Service Of Notice U/S 138 NI Act, Burden Shifts On Complainant To Prove Knowledge: Kerala High Court

Anamika MJ

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