The statutory demand notice is the hinge of every cheque dishonour prosecution — and the most litigated question about it is service. In Sainaba v. State of Kerala & Anr., 2026 INSC 1069 (decided 30 September 2026), a Bench of Manmohan and Ahsanuddin Amanullah JJ. held that a notice dispatched by registered post to the drawer’s correct address is presumed served even where a family member — here, the drawer’s mother — receives it. In doing so, the Court declared its own 2009 decision in M.D. Thomas per incuriam, removing a precedent that had allowed drawers to defeat complaints on exactly this ground.
The journey of the case
The presumption, restated
The Court anchored the rule in the established line of authority — K. Bhaskaran, D. Vinod Shivappa and the three-Judge Bench in C.C. Alavi Haji — all of which the judgment discusses. Once the complainant proves dispatch by registered post to the drawer’s correct address, service is presumed. The presumption is rebuttable, but the burden of rebutting it lies on the drawer: a wrong address, an incorrect postal endorsement, or genuine want of knowledge must be shown by him, not disproved by the complainant.
On the facts, the rebuttal case was hopeless. The accused had appeared in court on summons sent to the same address; his vakalatnama, appeal and revision all carried that address; he never disputed it in his statement under Section 313 CrPC; and he never suggested that his mother was estranged or lived elsewhere. The High Court, the Supreme Court held, had misread C.C. Alavi Haji and wrongly required the complainant to prove the accused’s actual knowledge.
Why the per incuriam declaration matters
M.D. Thomas v. P.S. Jaleel had been the refuge of drawers whose notices were received by relatives. The Supreme Court dismantled it on three grounds: it ignored the binding three-Judge Bench decision in C.C. Alavi Haji; it never examined whether the notice was correctly addressed or whether the recipient spouse lived with the drawer; and it treated the drawer’s wife as an unrelated third party. Relying on the principle in State of U.P. v. Synthetics and Chemicals — also discussed in the judgment — the Court held that a decision rendered in ignorance of binding precedent or statute is per incuriam and does not bind under Article 141.
The Court also pointed out the anomaly the old rule produced: a complainant whose notice was returned undelivered enjoyed the presumption of service, while one whose notice was actually delivered to the drawer’s household did not. A rule that rewards successful evasion over actual delivery defeats the purpose of Chapter XVII of the NI Act — the credibility of cheques as instruments of commerce.
Practice points after Sainaba
For payees: dispatch the demand notice within the statutory window by registered post with acknowledgement, to the address on record — the loan documents, the cheque, the account records. Preserve the postal receipt and tracking record: dispatch to the correct address is the fact that triggers the presumption.
For drawers: a notice received at your address by a parent, spouse or other household member is, presumptively, your notice. The safe course on receiving any Section 138 notice is to respond within the statutory period — paying, disputing the debt, or placing your defence on record — rather than betting the case on a plea of non-service.
For pending matters: defences built on M.D. Thomas no longer survive. Revisional courts, the judgment also reminds, cannot re-appreciate evidence to unseat concurrent findings on service.
| Element | Position after Sainaba |
|---|---|
| Dispatch to correct address, registered post | Presumption of service arises (S. 27, General Clauses Act; evidentiary presumption of common course of business) |
| Receipt by family member at that address | Valid service; no requirement of personal receipt by the drawer |
| Burden of rebuttal | On the drawer — wrong address, false endorsement, or genuine want of knowledge |
| M.D. Thomas (2009) 14 SCC 398 | Declared per incuriam; not binding precedent |
Frequently Asked Questions
What happened in the case?
The accused borrowed Rs. 3,00,000 and issued a cheque that bounced. The complainant's demand notice of 2016, sent by registered post to the accused's correct address, was received by his mother; he neither paid nor replied. The trial court convicted him and the appellate court affirmed, but the Kerala High Court in revision set aside the conviction, holding the notice was not served on the accused personally. The Supreme Court reversed the High Court and restored the conviction — six months' simple imprisonment and a fine of Rs. 3,00,000.
What is the rule on service of a Section 138 notice?
Dispatch by registered post to the drawer's correct address raises a rebuttable presumption of service under Section 27 of the General Clauses Act, 1897 and the evidentiary presumption as to the common course of business (Section 114 of the Evidence Act, 1872; for proceedings governed by the new code, the corresponding presumption in the Bharatiya Sakshya Adhiniyam, 2023). The burden then shifts to the drawer to rebut it — for instance by showing the address was wrong or that he genuinely had no knowledge of the notice.
Why was M.D. Thomas declared per incuriam?
M.D. Thomas v. P.S. Jaleel (2009) had set aside a conviction solely because the notice was received by the drawer's wife. The Supreme Court held that the decision ignored the binding three-Judge Bench ruling in C.C. Alavi Haji, did not examine whether the notice was correctly addressed, and treated a co-resident spouse as a stranger. A judgment rendered in ignorance of binding precedent is per incuriam and not binding under Article 141.
What should drawers and payees take from this?
Payees should always dispatch the demand notice by registered post (ideally with tracking) to the drawer's correct, documented address — dispatch is what triggers the presumption. Drawers who ignore a notice received at their address by a family member do so at their peril: silence, followed by participation in proceedings at that very address, will defeat any later plea of non-service.