The Hon’ble Supreme Court of India, in Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul [2025 INSC 1133], adjudicated upon the validity of a statutory notice under Section 138(b) of the Negotiable Instruments Act, 1881 (“NI Act”), where the amount demanded in the notice differed from the cheque amount due to an alleged typographical error.
Facts:- The appellant had issued two demand notices claiming ₹2,00,00,000/- instead of the actual cheque amount of ₹1,00,00,000/-. The accused sought discharge on the grounds that the notice was defective. While the Magistrate rejected the discharge application, the Delhi High Court quashed the complaint. The Supreme Court upheld the High Court’s decision.
Whether a statutory notice under Section 138(b) of the NI Act remains valid when the amount demanded therein differs from the cheque amount due to a typographical error.
The Supreme Court reaffirmed the principle that strict compliance with the statutory requirements under Section 138 is imperative, given the penal nature of the provision. The Court held:
The Hon’ble Supreme Court relied on several precedents, including:
These judgments consistently emphasize that penal statutes must be interpreted strictly, and technical compliance is not optional.
The Supreme Court has concluded that a statutory notice under Section 138(b) must demand the exact cheque amount. Any deviation, even if inadvertent or typographical, renders the notice invalid and the complaint non-maintainable.
This decision reinforces the importance of precision and diligence in drafting statutory notices under the NI Act. Parties initiating proceedings under Section 138 must ensure that the notice strictly adheres to the statutory language and demands only the cheque amount. The Complainant should ensure before issuance of demand notice under Section 138 of NI Act:
This article is for information purposes only and should not be taken as legal advice. To know further details, clarification, assistance or any advice on calculation or claim on account of cheque bouncing or any legal issues on recovery of amount through cheque bouncing , you may connect with us at admin@equicorplegal.com / 08448824659 and visit www.equicorplegal.com