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

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.

Background

The 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.

Findings

The 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 Act.

The Court observed that the Supreme Court in Vinod Shivappa and CC Alavi dealt with the situation where the notice is returned with an endorsement that the non-availability of the addressee or premises remaining locked on account of the addressee having gone elsewhere.

It noted that the Supreme Court was dealing with a challenge under an order passed by the High Court in a petition under Section 482 of CrPC, while the High Court in Saju's case was considering a revision against the conviction and sentence after trial.

It observed that the Supreme Court has not considered the situation in which notice is served to a third person other than the accused, and there is no evidence before the court to the effect that the accused was aware of the notice served to the third person, which was the case in Saju.

The Court noted that the Supreme Court in CC Alavi Haji decided whether any averments in the complaint to the effect that the accused had a role to play in the matter of non- receipt of legal notice or that the accused deliberately avoided service of notice is necessary, in light of Vinod Shivappa's case.

The Court observed the dictum laid down in Saju is not against that in M/s Indo Automobiles' case, as it was held in M/s Indo automobiles that once notice has been sent by registered post with acknowledgement due at the correct address, it must be presumed that the service has been made effective which is not the case in Saju.

The Court stated that in Sarath's case, the Court was considering a situation where there is evidence to show that the accused was deliberately evading notice and the notice was returned with an endorsement “unclaimed”.

The Court observed that the decision in Thomas M D was not considered in Komala Unnikrishnan and hence the observation in Komala Unnikrishnan that 'in absence of evidence to show the person who received the notice was not authorised the contention is liable to be rejected' was per incuriam.

The Court reaffirmed the principle laid down in Thomas M.D. v. P.S. Jaleel (2009), where the Supreme Court held that service of notice on the spouse of the accused was insufficient absent proof of actual knowledge by the accused. Notably, Thomas M.D. was not overruled or even considered in the later judgments relied upon by the complainant.

Allowing the plea the high court set aside the conviction and sentence imposed on the accused.

Case Title - Noorudheen v State of Kerala and Anr

Citation - 2025 LiveLaw (Ker) 469

Case No - Crl. Rev. 865/ 2023

Counsel for Revision Petitioner - Thareeq Anver, P K Mohanan

Counsel for Respondents - V A Johnson, Hrithwik C S

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