Introduction
In an important judgment, the Kerala High Court ruled that service of a statutory demand notice upon the relative of an accused individual—without proof of the accused’s knowledge—is invalid pursuant to Section 138(b) of the Negotiable Instruments Act, 1881. The ruling consolidates the requirement of strict compliance with procedural formalities in case of cheque dishonour.
Background
The case happened when the accused gave a cheque of ₹92,500 to the complainant for the sake of purchasing building materials. The cheque was dishonored as there were not enough funds. Later on, the complainant sent a legal demand notice on April 27, 2019. But the notice was not given to the accused personally but to a relative.
In spite of such a procedural failure, the trial court convicted the accused with a three-month simple imprisonment sentence and directed compensation. The conviction was upheld by the appellate court but the sentence was lowered to a month. The accused sought relief in the Kerala High Court.
Key Points
Improper Notice Service:
Justice P.V. Kunhikrishnan noted that service of notice upon the relative of the accused, without evidence that the accused was aware of it, is not enough under Section 138(b).
Strict Compliance Obligatory:
The Court underlined that the requirement laid down by the statute to issue a written demand notice within 30 days from the date of dishonour of the cheque has to be followed stringently.
Absence of Constructive Knowledge:
There was no proof that the accused had constructive or actual knowledge of service of notice on his relative.
Reference to Precedent:
The High Court followed the Supreme Court judgment in Thomas MD v. P.S. Jaleel (2009) and held that service of notice on a spouse cannot be considered as valid service on the accused.
Recent Development
On these facts, the Kerala High Court:
Quashed the conviction and sentence of the accused.
Directed refund of any amount paid by the accused during the pendency of the case.
Reiterated that non-service of valid notice vitiates the entire proceedings under Section 138 of the NI Act.
Conclusion
This ruling reinforces the procedural protection under Section 138(b) of the Negotiable Instruments Act. It upholds the fact that notice of demand has to be served on the drawer of the dishonoured cheque and that delivery to a relative will not suffice unless there is proof of the knowledge of the accused. The judgment acts as a warning to complainants and reaffirms the commitment of the courts to procedure fairness.
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WRITTEN BY AYUSHI TRIVEDI
