Appeal
Question of law: Whether notice is valid if the cheque amount and notice amount differ due to a typographical error?
2. When the amount mentioned and demanded in the notice sent under Proviso (b) to Section 138 of the Negotiable Instruments Act, 1881, to the payee or the holder in due course of the cheque, is different from the amount for which the cheque was issued, whether the notice would stand valid in eye of law; whether a defence that such was a typographical error could be a ground which could be countenanced in law – are the questions falling for consideration in the present appeals.
Fact and quashment of the case
3.3 The fact situation is that the cheque in question was issued for Rs.1,00,00,000/- whereas in both the aforesaid notices sent to the accused – the drawer of the cheque upon bouncing of the cheque, the complainant asked for the payment of Rs.2,00,00,000/-. At that stage, the respondent accused filed an application seeking discharge contending that the notice of demand as aforementioned was not in terms of Proviso (b) to Section 138 of the NI Act, therefore, the complaint was not maintainable. The plea for discharge was dismissed by the Metropolitan Magistrate on 06.10.2021. The respondent herein then filed a petition before the High Court, culminating into the impugned judgment and order whereby the High Court held that as the demand notice under Proviso (b) of Section 138 of the NI Act was at variance with the cheque amount, the same was invalid rendering the complaint liable to be quashed.
Analysis
5. Having gathered the compass of the controversy and considered the rival submissions, the provision of Section 138 of the NI Act may be noticed at the outset. This Section deals with the dishonour of the cheque. It reads as under,
“138. Dishonour of cheque for insufficiency, etc., of funds in the account.—Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless—
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.
Explanation.—For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.”
In this case, section 138 sub-clause (b) is in focus i.e., notice must be sent demanding the said amount of money
5.1 The aforesaid provision contemplates that where any cheque drawn by a person in the account maintained by him is returned dishonoured and unpaid, it amounts to a punishable offence. The ingredients of this penal provision are inter alia that the cheque should have been drawn by a person on an account maintained by him with a banker, for payment of any amount of money to another person from out of that account. Such cheque should be returned by the bank for the reason of money in the credit of the account being insufficient, etc. In order to make out the offence under Section 138 of the NI Act complete, conditions stated in sub-clauses (a),(b) and (c) of the Proviso should stand complied with. In the present case, it is the condition (b) to the Proviso which is in focus.
Section 138 N.I Act is explained
5.1.1 In K.R. Indira vs. Dr. G. Adinarayana, this Court enlisted the components, aspects and the acts, the concatenation of which would make the offence under Section 138 of the Act complete, to be these (i) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/in part of any debt or liability, (ii) presentation of the cheque by the payee or the holder in due course to the bank, (iii) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (iv) giving notice in writing to the drawer of the cheque within 15 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, and (v) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
The importance of the words ‘makes a demand for payment of said amount of money’ is explained
5.2 The purport of group of words ‘makes a demand for the payment of said amount of money’ occurring in Proviso (b) to Section 138 of the Act, and in particular the connotation ‘the said amount of money’ therein, hold key to the answer to the issue posed. The words ‘said amount of money’ figure in Proviso (b), Section 138. The effect and application of this phrase was dealt with by this Court in Suman Sethi vs. Ajay K. Churiwal & Anr.4 The context of facts was that the appellant in that case issued a cheque of Rs.20,00,000/- which was returned dishonoured. In the notice issued under the Proviso (b), the complainant called upon the drawer of the cheque to pay cheque amount of Rs.20,00,000/- along with incidental charges of Rs.1500/- spent on the cheque and also Rs.340/- as notice charges. It was stated that failing to pay would entail legal steps holding the drawer liable for all costs and consequences thereof. The contention was that since the incidental amount was demanded in the notice along with the cheque amount, the notice was rendered bad.
Judgment analysis
Suman sethi case: 5.2.1 Pertinently, in the process, delineating on the meaning of the words ‘said amount of money’, the Court in Suman Sethi (supra) stated thus. “
We have to ascertain the meaning of the words the “said amount of money” occurring in clauses (b) and (c) to the proviso to Section 138. Reading the section as a whole we have no hesitation to hold that the above expression refers to the words “payment of any amount of money” occurring in the main Section 138 i.e. the cheque amount. So in a notice, under clause (b) to the proviso, demand has to be made for the cheque amount.” (Para 6)
5.2.2. The Court proceeded to state further, “In the notice, demand has to be made for the “said amount” i.e. the cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to the “said amount” there is also a claim by way of interest, cost etc. whether the notice is bad would depend on the language of the notice. If in a notice while giving the break-up of the claim the cheque amount, interest, damages etc. are separately specified, other such claims for interest, cost etc. would be superfluous and these additional claims would be severable and will not invalidate the notice.” (Para 8)
5.2.3 The Court observed that the demand in the notice has to be made for the said amount which would be the ‘cheque amount’. If no such demand is made the notice would fall short of its legal requirement. In the facts of that case, however, the Court held that since the cheque amount in the notice was correctly stated, merely because the respondent claimed in addition to the cheque amount, the incidental charges and notice charges, which were severable, notice could not be branded as bad in law.
5.2.4 It was further observed that however if in the notice an ambiguous demand is made without specifying the due amount under the dishonoured cheque, the notice would fail to meet the legal requirement. In other words, what was pinpointed was that the words ‘said amount’ in Proviso (b) has to be same amount of the cheque which is dishonoured. The object of the notice under Proviso (b) of Section 138 of the Act was explained by this Court in Central Bank of India vs. Saxons Farms & Ors, observing that the purpose of the notice is to give a chance to the drawer of the cheque to rectify his omission. Once the defaulter makes payment of the amount covered by the cheque as mentioned in the notice within stipulated 15 days, he would stand absolved from his liability.
K.R.Indira case: 5.3 This Court in K.R. Indira (supra), again held that specific demand for the payment of the sum covered by the dishonoured cheque is required to be made in the notice. In that case, there was a loan transaction in the backdrop and the cheques were issued towards that payment. In absence of specific demand for the cheque amounts, the notice was held to be invalid. In Rahul Builders vs. Arihant Fertilizers & Chemicals & Anr, the imperative character of the condition in the Proviso (b) to Section 138 of the Act was again highlighted. Amount of Rs.8,72,409 was due to the appellant thereof from respondent No.1. Respondent issued a cheque for Rs.1,00,000/- which was dishonoured. The appellant sent notice to the respondent asking him to remit Rs.8,72,409/-.
Rahul Builders case: 5.3.1 This Court in Rahul Builders (supra) stated that one of the conditions was service of a notice making ‘demand of the payment of the amount of cheque’ as is evident from the use of the phraseology ‘payment of the said amount of money,
“Service of a notice, it is trite, is imperative in character for maintaining a complaint. It creates a legal fiction. Operation of Section 138 of the Act is limited by the Proviso. When the Proviso applies, the main section would not. Unless a notice is served in conformity with proviso (b) appended to Section 138 of the Act, the complaint petition would not be maintainable. Parliament while enacting the said provision consciously imposed certain conditions.” (Para 10)
Dashrathbhai Trikambhai Patel case: 5.4 In more recent decision of this Court in Dashrathbhai Trikambhai Patel vs. Hitesh Mahendrabhai Patel & Anr the dictum of law was reiterate in the following words,
“The notice demanding the payment of the “said amount of money” has been interpreted by judgments of this Court to mean the cheque amount. The conditions stipulated in the provisos to Section 138 need to be fulfilled in addition to the ingredients in the substantive part of Section 138.” (Para 34.5).
The word ‘said amount’ and its principle of statutory interpretation are referenced with English decision
6. The interpretation of the words ‘said amount’ in Proviso (b) to Section 138 of the NI Act as above is based on the principle of statutory interpretation that penal statute would always be construed and applied strictly. This Court in M. Narayanan Nambiar vs. State of Kerala, spoke on the rule of construction of a penal provision in its true perspective by quoting from the English decision in Dyke vs. Elliott which was again referred to in a more recent decision of this Court in Balaji Traders vs. State of U.P. & Anr.
“A decision of the judicial Committee in Dyke v. Elliot, (1) cited by the learned counsel as an aid for construction neatly states the principle and therefore may be extracted:-
Lord justice James speaking (1)(1872) L. R. 4 P.C. 184, 191, for the Board observes at P.191:
“No doubt all penal Statutes are to be construed strictly, that is to say, the Court must see that the thing charged as an offence is within the plain meaning of the words used, and must not strain the words on any notion that there has been a slip, that there has been a casus omissus, that the thing is so clearly within the mischief that it must have been intended to be included if thought of. On the other hand, the person charged has a right to say that the thing charged although within the words, is not within the spirit of the enactment.””
Detailed analysis of the word ‘said amount’
7. When the Proviso (b) to Section 138 stipulates the service of notice as one of the conditions for constituting the offence, and when the words ‘said amount’ is incorporated in the language of the provision, it is the amount which is specifically referable to the amount recoverable under the cheque in question. Reading Section 138 of the Act in a composite manner, the word ‘said amount’ occurring in the Proviso (b) is connectible with and operates in conjunction with language in the parent part of the Section ‘where any cheque drawn by a person ……of any amount of money’.
7.1 The words ‘said amount’ and the phrase ‘any amount of money’ have the same purport signifying the cheque amount. They operate hand-in-hand for the purpose of applicability of the Section. The nexus or linkage between the two is enacted by the Legislature with a purpose of making the two to be the same and inseparable components, the former describing the offence and the latter denoting the condition to be fulfilled for constituting the offence.
If the notice amount is different from the cheque amount then proceedings under section 138 N.I is bad in law
8. From the afore-stated reiterative pronouncements and the principles propounded by the courts, the position of law that emerges is that the notice demanding the payment of the amount covered by the dishonoured cheque is one of the main ingredients of the offence under Section 138 of the NI Act. In the event of the main ingredient not being satisfied on account of discrepancy in the amount of cheque and one mentioned in the notice, all proceedings under Section 138 of the NI Act would fall flat as bad in law. The notice to be issued under Proviso (b) to Section 138 of the 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. After mentioning the exact cheque amount, the sender of the service may claim in the notice amounts such as legal charges, notice charges, interest and such other additional amounts, provided the cheque amount is specified to be demanded for payment.
Principle of reading the notice as a whole is irrelevant: 8.1 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. Here the principle of reading of notice as a whole is inapplicable and irrelevant. Any elasticity cannot be adopted in the interpretation. It has to be given technical interpretation.
Typographical error is no defence: 8.2 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. And in the facts of the present case, the explanation that mentioning of wrong amount in the cheque was in the nature of typographical or inadvertent error could hardly be accepted, for, the so called mistake occurred and recurred in both the notices dated 08.06.2012 and 14.09.2012.
Said amount is mandatory and not mentioning omnibus amount in notice: 9. When the provision is penal and the offence is technical, there is no escape from holding that the ‘said amount’ in proviso (b) cannot be the amount other than mentioned in the cheque in question for dishonour of which the notice is received, nor the mentioning of omnibus amount in the notice would fulfil the requirement. It has to be held that in order to make a valid notice under the Proviso (b) to Section 138 of the NI Act, it is mandatory that ‘said amount’ to be mentioned therein is the very amount of cheque, and none other.
Conclusion
Quashment of notice is proper and legal
10. Reverting to recollect the facts of this case, the cheque which was drawn by the respondent was for Rs.1,00,000/- whereas in the notice issued under Proviso (b) to Section 138 of the NI Act against the respondent, appellant mentions the amount of Rs.2,00,000/-. 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.
11. No case is made out for interfering with the impugned order of the High Court. The appeals stand dismissed.
The judgments involved in the case are
- Suman Sethi vs. Ajay K. Churiwal & Anr. (2000) 2 SCC 380
- Central Bank of India & Anr. vs. Saxons Farms & Ors. (1999) 8 SCC 221
- K.R. Indira vs. Dr. G. Adinarayana – (2003) 8 SCC 300
- Rahul Builders vs. Arihant Fertilizers & Chemicals & Anr. (2008) 2 SCC 321
- Dashrathbhai Trikambhai Patel vs. Hitesh Mahendrabhai Patel & Anr. (2023) 1 SCC 578
- Gokuldas vs. Atal Bihari & Anr. MCRC 5458/2013
- M/s. Yankay Drugs and Pharmaceuticals Ltd. Vs. CITI bank – 2001 DCR 609
- Chhabra Fabrics Private Limited vs. Bhagwan Dass Crl. Appeal No.1772-SB of 2002
- K. Gopal vs. Mr. T. Mukunda – Criminal Appeal No.1011 of 2010
- Sunglo Engineering India Pvt. Ltd. Vs. The State & Ors – MANU/DE/3805/2021
- M. Narayanan Nambiar vs. State of Kerala – AIR 1963 SC 1116
- Balaji Traders vs. State of U.P. & Anr – 2025 SCC OnLine SC 1314
- Dyke vs. Elliott (1872) 4 PC 184
- U.S. v. Wiltberger 18 US 76 (1820)
- K.K. Ahuja vs. V.K. Vora & Anr – (2009) 10 SCC 48
Acts and sections used in this case are
- Negotiable Instruments Act, 1881: Sections 138, 141, and 142
- Constitution of India: Article 227
- Code of Criminal Procedure, 1973: Section 482
Party
Kaveri Plastics vs. Mahdoom Bawa Bahrudeen Noorul - Criminal Appeal Nos. 4142-4143/2025 (@ Special Leave Petition (Crl.) Nos. 11184-11185/2024) - September 19, 2025 - Hon’ble Chief Justice B.R. Gavai and Hon’ble Mr. Justice N.V. Anjaria 2025 INSC 1133.
