S.138 NI Act Complaint Not Maintainable If Demand Notice Didn't Mention Exact Cheque Amount; Typo Error No Defence : Supreme Court
"It is mandatory that the demand in the statutory notice has to be the very amount of the cheque," observed the Court.
The Supreme Court has reiterated that for a complaint under Section 138 of the Negotiable Instruments Act, 1881, to be maintainable, the statutory notice of demand must precisely mention the cheque amount. If the amount mentioned in the demand notice varies from the cheque amount ,then the complaint is not maintainable."The notice to be issued under Proviso (b) to Section 138 of the NI Act...
The Supreme Court has reiterated that for a complaint under Section 138 of the Negotiable Instruments Act, 1881, to be maintainable, the statutory notice of demand must precisely mention the cheque amount. If the amount mentioned in the demand notice varies from the cheque amount ,then the complaint is not maintainable.
"The notice to be issued under Proviso (b) to Section 138 of the NI Act must mention the same amount for which the cheque was issued. It is mandatory that the demand in the statutory notice has to be the very amount of the cheque," observed the Court.
The bench comprising Chief Justice of India BR Gavai and Justice NV Anjaria clarified that a notice mentioning an amount different from the cheque amount, or failing to mention the cheque amount altogether, would be legally invalid.
"A failure in above regard, namely when the cheque amount is not mentioned in the Proviso (b) notice or the amount different than the actual cheque amount is mentioned, in the notice, such notice would stand invalid in eye of law. The notice in terms of Proviso (b) being a provision in penal statute and a condition for the offence, it has to be precise while mentioning of the amount of the cheque which is dishonoured. Even if the cheque details are mentioned in the notice but corresponding amount of cheque is not correctly mentioned, it would not bring in law the validity for such notice," stated the judgment authored by Justice Anjaria.
The Court was considering an appeal filed against a judgment of the Delhi High Court which quashed a criminal complaint filed under S.138 NI Act on the ground that the amount mentioned in the notice was not the same as per the cheque, which rendered the notice invalid.
While the cheque was issued for an amount of Rs 1 lakh, the demand notice mentioned Rs 2 lakh. However, the cheque details were correct. The Court did not accept the complainant's defence that it was an inadvertent typographical error.
The judgment, after referring to various precedents, upheld the High Court's view and dismissed the appeal
"The condition of notice under Proviso (b) is required to be complied with meticulously. Even typographical error can be no defence. The error even if typographical, would be fatal to the legality of notice, given the need for strict mandatory compliance," the Court observed.
In support, the Court referred Suman Sethi vs. Ajay K. Churiwal & Anr., (2000) 2 SCC 380 to reaffirm that the demand must be for the cheque amount alone, and additional claims like interest or costs must be clearly severable from the cheque amount, and not to be included towards the demand amount.
"There is no ambiguity or doubt in the language of Section 138. Reading the entire section as a whole and applying common sense, from the words, as stated above, it is clear that the legislature intended that in a notice under clause (b) to the proviso, the demand has to be made for the cheque amount.", the court said in Suman Sethi.
Applying the law to the present facts, the court said:
“The rigours of law on this score being strict, the defence would not hold good that the different amount mentioned in the notice was out of inadvertence. Even if the cheque number was mentioned in the notice, since the amount was different, it created an ambiguity and differentiation about the 'said amount'. The notice stood invalid and bad in law. The order of quashment of notice was eminently proper and legal.”
The Court also referred to Rahul Builders vs. Arihant Fertilizers & Chemicals & Anr (2008) 2 SCC 321, Dashrathbhai Trikambhai Patel vs. Hitesh Mahendrabhai Patel & Anr (2023) 1 SCC 578 etc.
Citation : 2025 LiveLaw (SC) 927
Click here to read the judgment
Appearance:
For Petitioner(s) : Ms. Aditi Pancharia, Adv. Mr. Jitendra Pancharia, Adv. Mr. Arvind Rathaur, Adv. Mr. Rohan Rana, Adv. Mr. Sonu Kumar, Adv. Mr. Sanjay Kumar, AOR
For Respondent(s) : Mr. Siddharth Khattar, Adv. Mr. Kush Chaturvedi, AOR Mr. D. Andley, Adv. Mr. Sanket Kumar, Adv. Mr. Syed Faraz Alam, Adv. Mr. Atharva Gaur, Adv. Mr. Aayushman Aggarwal, Adv. Ms. Ayesh Choudhary, Adv.