Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | Crl.A. No.-004142-004143 – 2025 |
| Diary Number | 24253/2024 |
| Judge Name | HON’BLE THE CHIEF JUSTICE |
| Bench |
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| Precedent Value | Binding authority clarifying mandatory requirement for demand notices under Section 138 NI Act |
| Overrules / Affirms | Affirms existing precedent |
| Type of Law | Criminal law – negotiable instruments (Section 138 NI Act) |
| Questions of Law | Whether a demand notice under Proviso (b) to Section 138 NI Act remains valid if the amount demanded differs from the cheque amount, and whether typographical errors in such notices can be condoned |
| Ratio Decidendi | The “said amount” in Proviso (b) to Section 138 refers exclusively to the cheque amount; any discrepancy—even typographical—between the cheque value and the demand renders the notice invalid. Penal provisions must be construed strictly. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by SC |
|
| Facts as Summarised by the Court | A cheque for ₹1 crore bounced. Two legal notices demanded ₹2 crores under Proviso (b). Drawer applied for discharge, challenging notice validity. Delhi High Court quashed the complaint on account of amount mismatch in the notice. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts interpreting Section 138 NI Act notices |
| Persuasive For | High Courts in other jurisdictions |
| Follows |
|
What’s New / What Lawyers Should Note
- Notice under Proviso (b) must demand the exact dishonoured-cheque amount; no deviation permitted.
- Typographical or inadvertent errors in the amount invalidate the notice.
- “Reading the notice as a whole” cannot cure a wrong demand amount in a penal provision.
- Penal provisions like Section 138 NI Act are to be construed strictly; literal compliance is mandatory.
- Even if cheque details (number/date) are correct, a mismatched amount creates fatal ambiguity.
Summary of Legal Reasoning
- Section 138 NI Act and Proviso (b) require a written demand for “the said amount of money” within 30 days.
- In Suman Sethi, “said amount” was held to mean the cheque amount.
- Subsequent precedents (K.R. Indira, Rahul Builders, Dashrathbhai Patel) reaffirmed that demand must match cheque value.
- Penal statutes demand strict, literal construction; ambiguous or incorrect demands defeat statutory compliance.
- Typographical errors in demand notices cannot be condoned when the proviso is a condition precedent to offence.
- Here, notices demanded ₹2 crores on a ₹1 crore cheque—notice invalid; complaint quashed.
Arguments by the Parties
Petitioner (Appellant):
- The wrong amount was a typographical error; notice read as a whole identifies the correct cheque.
- Section 138 NI Act is remedial in nature; technical defects should not defeat substantive justice.
- Purpose of the Act is to facilitate business transactions; strict technicalities strain that purpose.
Respondent:
- Both notices demanded double the cheque amount, breaching Proviso (b).
- Legal position is settled that demand amount must match cheque amount.
- Typographical‐error defence is an after-thought and does not cure statutory non-compliance.
Factual Background
A company issued a cheque for ₹1 crore relating to a land sale but it bounced. The payee sent two notices under Proviso (b) demanding ₹2 crores. The drawer sought discharge, arguing that the notice was invalid due to the amount mismatch. The Delhi High Court agreed and quashed the criminal complaint under Section 138 NI Act.
Statutory Analysis
- Section 138 NI Act creates offence for dishonoured cheques, subject to conditions in Proviso (a)–(c).
- Proviso (b) mandates a written demand for “the said amount of money” within 30 days of return memo.
- “Said amount” equates to the exact cheque amount; any deviation nullifies the notice.
- Penal statute construction requires strict literal compliance; no implied or inferential cures.
Alert Indicators
- ✔ Precedent Followed – Existing requirement for exact-amount notices under Section 138 upheld.