CA Nikita
Quick Summary
The Supreme Court has tightened the rule against the drawers of cheques, which are dishonoured for want of sufficient balance in the bank account. They cannot avoid service of notice by the payee by making themselves scarce, according to the judgment, C C Alavi Haji vs Palapetty Muhammed.
It explained: “Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court make payment of the cheque amount and submit to the court that he had made payment and therefore the complaint under Section 138 of the Negotiable Instruments Act is liable to be rejected. A person who does not pay within 15 days cannot obviously contend that there was no proper service of notice by ignoring the statutory presumption under the General Clauses Act and the Evidence Act.”
Once the payee dispatches the notice by registered post with correct address of the drawer of the cheque, the requirement of notice under the above Acts stands complied with and it could be presumed that the drawer got notice. Otherwise, unscrupulous elements would dodge notice and make it impossible for the authorities to prosecute them.
FAQ :
The Supreme Court ruled that drawers of dishonoured cheques cannot avoid legal action by evading the service of notice sent by the payee.
They can pay the cheque amount within 15 days of receiving the court summons and submit proof of payment to the court to have the complaint rejected.
They cannot argue that there was no proper service of notice, and they will face prosecution under Section 138 of the Negotiable Instruments Act.
A notice is presumed to be served once the payee dispatches it by registered post to the correct address of the drawer.
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