Supreme Court of India
KAVERI PLASTICSversusMAHDOOM BAWA BAHRUDEEN NOORUL
- Citation
- 2025 INSC 1133
- Decided
- 19 September 2025
- Disposal
- Dismissed
Holding
A notice under Proviso (b) to Section 138 of the Negotiable Instruments Act is invalid unless it demands the exact amount of the dishonoured cheque; any variance, even due to typographical error, defeats the statutory requirement.
Summary
Kaveri Plastics issued a cheque of Rs 1 crore to the respondent, which was returned unpaid. The plaintiff served two demand notices under Proviso (b) of Section 138 of the Negotiable Instruments Act, but each notice demanded Rs 2 crore, double the cheque amount. The Delhi High Court quashed the criminal complaint on the ground that the notice was invalid because the amount demanded did not match the cheque amount, and the appellant appealed to the Supreme Court. The Court examined whether a notice that mentions a different amount, even if claimed to be a typographical error, satisfies the statutory requirement. Relying on prior decisions, the Court held that the notice must demand the exact cheque amount; any discrepancy, however inadvertent, defeats the condition of the proviso and renders the notice void. Consequently, the appeals were dismissed and the High Court’s order quashing the complaint was affirmed.
Issues considered
- When does a notice under Proviso (b) to Section 138 of the Negotiable Instruments Act become invalid if the amount mentioned differs from the cheque amount?
- Can a typographical error in the amount specified in such a notice be a valid defence?
- Is it permissible to read the notice as a whole to cure the discrepancy in amount?
Legislation cited
- Negotiable Instruments Act, 1881s. 138, s. 141, s. 142
Headnote
1210 : 2025 INSC 1133 Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul (Criminal Appeal No(s). 4142-4143 of 2025) 19 September 2025 [B.R. Gavai, CJI and N.V. Anjaria,* J.] Issue for Consideration When the amount mentioned and demanded in the notice sent under Proviso (b) to s.138 of the of law; whether a defence that such was a typographical error could be a ground which could be countenanced in law. Headnotes† Negotiable Instruments Act, 1881 – Proviso (b) to s.138 – The High Court quashed the criminal complaint filed by the respondent herein u/ss.138, 141 and
Subjects
Proviso (b) to s.138 of the Negotiable Instruments Act, 1881Amount mentioned and demanded in the noticeTypographical errorActual cheque amountPenal statuteDishonoured chequeLegality of noticeTechnical interpretationStrict mandatory compliance
Judgment
[2025] 9 S.C.R. 1210 : 2025 INSC 1133
Kaveri Plastics
v.
Mahdoom Bawa Bahrudeen Noorul
(Criminal Appeal No(s). 4142-4143 of 2025)
19 September 2025
[B.R. Gavai, CJI and N.V. Anjaria,* J.]
Issue for Consideration
When the amount mentioned and demanded in the notice sent
under Proviso (b) to s.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.
Headnotes†
Negotiable Instruments Act, 1881 – Proviso (b) to s.138 –
The High Court quashed the criminal complaint filed by the
respondent herein u/ss.138, 141 and 142 of the Negotiable
Instruments Act, 1881, on the ground that amount mentioned
in the notice was not the same as per the cheque, which
rendered the notice invalid – Correctness:
Held: The fact situation is that the cheque in question was issued
for Rs.1,00,00,000/- whereas in both the 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/- – A
failure, 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
* Author
[2025] 9 S.C.R. 1211
Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul
irrelevant – Any elasticity cannot be adopted in the interpretation – It
has to be given technical interpretation – 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 – In order to make a valid
notice under the Proviso (b) to s.138 of the NI Act, it is mandatory
that ‘said amount’ to be mentioned therein is the very amount of
cheque, and none other – Thus, the notice stood invalid and bad
in law – The order of quashment of notice was eminently proper
and legal. [Paras 3.3, 8.1, 8.2, 9, 10]
Case Law Cited
Suman Sethi v. Ajay K. Churiwal & Anr. [2000] 1 SCR 601 : (2000)
2 SCC 380; Rahul Builders v. Arihant Fertilizers & Chemicals
& Anr. [2007] 11 SCR 951 : (2008) 2 SCC 321; Dashrathbhai
Trikambhai Patel v. Hitesh Mahendrabhai Patel & Anr. (2023) 1
SCC 578 – relied on.
Central Bank of India & Anr. v. Saxons Farms & Ors. [1999] Supp.
3 SCR 534 : (1999) 8 SCC 221; K.R. Indira v. Dr. G. Adinarayana
[2003] Supp. 4 SCR 535 : (2003) 8 SCC 300; M. Narayanan
Nambiar v. State of Kerala [1963] Supp. 2 SCR 724 : AIR 1963
SC 1116; Balaji Traders v. State of U.P. & Anr. 2025 SCC OnLine
SC 1314; K.K. Ahuja v. V.K. Vora & Anr. [2009] 9 SCR 1144 :
(2009) 10 SCC 48 – referred to.
Gokuldas v. Atal Bihari & Anr., MCRC 5458/2013 (High Court of
Madhya Pradesh); M/s. Yankay Drugs and Pharmaceuticals Ltd. v.
CITI Bank, 2001 DCR 609 (High Court of Andhra Pradesh);
Chhabra Fabrics Private Limited v. Bhagwan Dass, Crl. Appeal
No.1772-SB of 2002 (High Court of Punjab and Haryana); K.
Gopal v. Mr. T. Mukunda, Criminal Appeal No.1011 of 2010 (High
Court of Karnataka); Sunglo Engineering India Pvt. Ltd. v. The State
& Ors., MANU/DE/3805/2021 (Delhi High Court) – referred to.
Dyke v. Elliott (1872) 4 PC 184; U.S. v. Wiltberger, 18 US 76
(1820) – referred to.
List of Acts
Negotiable Instruments Act, 1881.
1212 [2025] 9 S.C.R.
Supreme Court Reports
List of Keywords
Proviso (b) to s.138 of the Negotiable Instruments Act, 1881; Amount
mentioned and demanded in the notice; Typographical error; Actual
cheque amount; Penal statute; Dishonoured cheque; Legality of
notice; Technical interpretation; Strict mandatory compliance.
Case Arising From
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No(s).
4142-4143 of 2025
From the Judgment and Order dated 26.02.2024 of the High Court
of Delhi at New Delhi in CRLMC Nos. 2164 and 9155 of 2022
Appearances for Parties
Advs. for the Appellant:
Ms. Aditi Pancharia, Jitendra Pancharia, Arvind Rathaur, Rohan
Rana, Sonu Kumar, Sanjay Kumar.
Advs. for the Respondent:
Siddharth Khattar, Kush Chaturvedi, D. Andley, Sanket Kumar,
Syed Faraz Alam, Atharva Gaur, Aayushman Aggarwal, Ms. Ayesh
Choudhary.
Judgment / Order of the Supreme Court
Judgment
N.V. Anjaria, J.
Leave granted.
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.
2.1. The appeals arise out of the judgment and order dated
26.02.2024 in Crl. M.C. No.2164 of 2022 and Crl. M.A. No.9155
[2025] 9 S.C.R. 1213
Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul
of 2022 passed by the High Court of Delhi whereby the High
Court quashed the Criminal Complaint No.523804 of 2016 filed
by the respondent herein under Sections 138, 141 and 142 of
the Negotiable Instruments Act, 1881 (hereinafter referred to
as ‘the NI Act’), on the ground that amount mentioned in the
notice was not the same as per the cheque, which rendered
the notice invalid.
3. Stated in brief, the facts in the background are inter alia that a
complaint came to be filed by the appellant herein against the
respondent-arraigned as accuse No.3, alleging that accused No.1-
M/s. Nafto Gaz India Private Limited entered into Memorandum
of Understanding with the appellant-complainant on 30.04.2012
relating to sale of land. A cheque bearing number 876229 dated
12.05.2012 drawn on the Indian Overseas Bank, R.K. Puram, Delhi
for Rs.1,00,00,000/- was issued by the accused No.1 in favour of
the appellant, which returned dishonoured on the ground ‘funds
insufficient’.
3.1 The appellant issued demand notice dated 08.06.2012. The
relevant part of said notice is extracted hereunder.
“4. That in pursuance of the MoU, in terms of part
liability towards my clients, you the noticees issued
the following cheque:
CHEQUE DATE BANK & BRANCH AMOUNT
NO.
876229 30.04.2012 Indian Overseas 1 Crore
Bank,
B/o R.K. Puram 1,00,00,000/-
I, hereby call upon you to make the payments of the
aforesaid cheques of 2,00,00,000/- (Rupees Two
Crores) within the stipulated period of 15 days from
the date of receipt of this legal notice failing which
I have definite instructions from my client to initiate
legal proceedings, against you which please note
shall solely be at your risk and cost. Copy kept.”
3.2 Another notice dated 14.09.2012 was issued to accused No.1-
M/s. Nafto Gaz India Private Limited and its Directors through
the advocates. Relevant portion thereof is extracted hereinbelow:
1214 [2025] 9 S.C.R.
Supreme Court Reports
‘Sub.: Legal Notice’
Under instructions and on behalf of my client Sh.
Deepak Gupta, S/o Sh. Rameshwar Dass, R/o 3862,
Gali No.1, Pahari Dheeraj, Sadar Bazar, Delhi -
110006 and on the basis of the documents provided,
I serve upon you the following legal notice;
1. That my client is a law abiding citizen residing at
the abovementioned address for the past many years.
2. That you the noticee no.1 is a company registered
under the Indian Companies Act, 1956 having its office
at the abovementioned address while the noticees
no. 2-5 are Directors of the noticee no. 1 Company
and are responsible for day to day working of the
noticee no. 1 company and the noticee no. 6 is the
authorised signatory of the noticee no.1 company
and noticees No.2-6 are responsible for day to day
activities of the noticee no.-1 company.
3. That you the notice no.1 entered into a Memorandum
of Understanding with my client on 30.04.2012
pertaining sale of land bearing Khasra No. 75,
Khewat No. 61, Khata No. 112 and Khatoni No.
61/14, Village — Humayunpur situated in Abadi of
Arjun Nagar, New Delhi and also agreed to take on
lease the property till the final sale deed is executed
and issued certain cheques towards your liability for
rent of leased property.
4. That in pursuance of the MoU, in terms of part
liability towards my clients, you the notices issued
the following cheque:
CHEQUE DATE BANK & BRANCH AMOUNT
NO.
876229 30.04.2012 Indian Overseas 1 Crore
Bank,
B/o R.K. Puram 1,00,00,000/-
5. That you the noticees assured my client that the
aforesaid cheque shall be honoured on presentation.
[2025] 9 S.C.R. 1215
Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul
6. That believing you assurance, my client presented
the aforesaid cheque to his banker, but was
astonished to see the fate of the cheque as the same
returned dishonoured vide memos dated 29.08.2012
for reason “FUNDS INSUFFICIENT”.
7. That you have defrauded my client by issuing
cheque from account maintained by you towards
discharge of your legal liability towards my client
and then not ensuring that the same is dishonoured
thereafter, attracting penal action u/s 138 of the
Negotiable Instruments Act, 1881 and also under
Section 420 of the Indian Penal Code.
I, hereby call upon you to make the payments of the
aforesaid cheque of ₹2,00,00,000/- (Rupees Two
Crores) within the stipulated period of 15 days from
the date of receipt of this legal notice failing which
I have definite instructions from my client to initiate
legal proceedings, against you which please note
shall solely be at your risk and cost. Copy kept.”
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.
3.4 In the reply filed by the appellant to the discharge application
the following defence was raised as found in paragraph 2.
“That the notice dated 08.05,2012 is perfect and if
contents of the entire notice be read as whole the said
1216 [2025] 9 S.C.R.
Supreme Court Reports
demands, the “aforesaid cheque” and the aforesaid
cheque has been clearly described in para 4 of the
notice, however, due to typographical inadvertent
mistake Rs.2,00,00,000/- has been mention after the
word “aforesaid cheque”. It is very relevant to mention
herein that complainant has also issued other notices
to the accused on the same day which consist the
cheque for Rs.2,00,00,000/- and due to cut paste
command inadvertently amount of Rs. 2,00,00,000/-
could not change in the notice issued in the present
case. It is very relevant to mention herein that contents
of entire notice clearly speaks real facts and all the
contents of the notice must be read in totality.”
4. Learned Advocate for the appellant, Mr. Sanjay Kumar assailing the
judgment of the High Court, contended that a too technical ground
weighed with the High Court in quashing the complaint, as it viewed
that since amount mentioned in the notice was Rs.2,00,00,000/-while
the cheque issued was for Rs.1,00,00,000/-, the notice was invalid.
It was sought to be submitted that there was a clear typographical
error on the part of the complainant in mentioning in the notice the
different amount. It was next submitted that other details of cheque
were mentioned in the notice and that the court ought to have looked
at the substance of the matter rather than becoming technical.
4.1 It was then submitted that the offence under Section 138 of
the NI Act is essentially a civil wrong in the attire of criminal
offence. In that view, it was submitted, the technicality should
not be allowed to prevail. It was further submitted that purpose
of Section 138 of the NI Act is to facilitate smooth business
transactions. Learned counsel for the appellant submitted
that the kind of view taken by the High Court, if allowed to be
sustained, it would give a premium to the drawer of the cheque
whose cheque is dishonoured and has remained unpaid.
4.2 It was submitted by relying on the decision of this Court in
Suman Sethi vs. Ajay K. Churiwal & Anr.1 that the notice
was required to be read as a whole. By pressing into service
another decision also of this Court in Central Bank of India
1 (2000) 2 SCC 380
[2025] 9 S.C.R. 1217
Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul
& Anr. vs. Saxons Farms & Ors.2 it was highlighted that the
object of the notice under the Proviso (b) of Section 138 of
the NI Act, was to give a chance to the drawer of the cheque
to rectify his omission and also to protect an honest drawer.
4.3 On the other hand, learned advocate for the respondent
Mr. Siddharth Khattar submitted that in the notice under
Proviso (b) of Section 138 of the NI Act issued by the respondent,
he gave incorrect details demanding double the cheque
amount. Learned advocate for the respondent highlighted that
Rs.2,00,00,000/- was demanded in both the notices issued
on 08.06.2012 and next on 14.09.2012. It was submitted with
reference to the decisions of this Court as well as that of
different High Courts that the issue is no longer res integra that
the demand in legal notice cannot be different than the cheque
amount. He submitted that the complainant took a false and a
stock plea of typographical error in the notice.
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:
2 (1999) 8 SCC 221
1218 [2025] 9 S.C.R.
Supreme Court Reports
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.”
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.
5.1.1 In K.R. Indira vs. Dr. G. Adinarayana3, this Court enlisted
the components, aspects and the acts, the concatenation
of which would make the offence under Section 138 of the
3 (2003) 8 SCC 300
[2025] 9 S.C.R. 1219
Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul
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.
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.
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.
4 (2000) 2 SCC 380
1220 [2025] 9 S.C.R.
Supreme Court Reports
“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
[2025] 9 S.C.R. 1221
Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul
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.5,
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.
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.6, 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/-.
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
5 (1999) 8 SCC 221
6 (2008) 2 SCC 321
1222 [2025] 9 S.C.R.
Supreme Court Reports
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)
5.4 In more recent decision of this Court in Dashrathbhai
Trikambhai Patel vs. Hitesh Mahendrabhai Patel & Anr.7 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)
5.5 The different High Courts hold the view in unanimity. The
High Court of Madhya Pradesh in Gokuldas vs. Atal Bihari
& Anr.8 observed that offence under Section 138 of the NI Act
is a technical offence therefore every technical formality as
required under the Section must be complied with strictly. In
that case, the complaint was filed on the ground that cheque
of Rs.4,30,000/- was issued in lieu of repayment of loan of
Rs.4,30,000/-. A notice under Proviso (b) to Section 138 of the
NI Act was sent on the ground that cheque of Rs.43,000/- was
given. It was held that the notice was not for ‘said amount of
money’ to render it invalid.
5.5.1 In M/s. Yankay Drugs and Pharmaceuticals Ltd. Vs.
CITI bank9, the High Court of Andhra Pradesh reiterated
the proposition that while demanding payment by issuing
notice under Section 138(b) of the NI Act, the payee or
the holder in due course must demand payment of the
7 (2023) 1 SCC 578
8 MCRC 5458/2013
9 2001 DCR 609
[2025] 9 S.C.R. 1223
Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul
amount covered by the cheque. It was stated that if the
demand is for a lesser amount or a higher amount not
covered by the cheque, which was dishonoured, then
the prosecution must fail in as much as the statutory
requirement of Section 138(b) is not fulfilled. In that case
the amount of cheque which was dishonoured by the bank
was Rs.9,972/-. But in the notice under Section 138(b) of
the NI Act, the complainant failed to make any demand
for payment of the said amount, instead it was stated
in the notice that the cheque was issued for Rs.3,871/-.
The High Court rightly stated that the notice fell short of
the statutory requirement.
5.5.2 Before the High Court of Punjab and Haryana, in Chhabra
Fabrics Private Limited vs. Bhagwan Dass10, it was
a case where there was a discrepancy in mentioning
the number of cheque which was claimed to be a
typographical error. The High Court observed that even
if it was true that there was a typographical error in the
legal notice while typing out the cheque number, such
typographical error, if any, does not meet the compliance
of the mandatory provisions of Section 138 of the NI Act.
5.5.3 The contention that the discrepancy in the amount
mentioned in the notice under Proviso (b) of Section
138 of the NI Act was only a typographical error to be
overlooked, was again negatived by the High Court of
Karnataka in K. Gopal vs. Mr. T. Mukunda11. In that
case, the accused issued two cheques of Rs.2,00,000/-
each but in the legal notice the amount demanded was
only Rs.10,000/-. The argument advanced by the learned
counsel was that it was just a typographical error. The
High Court asserted that Section 138(b) of the NI Act
contemplates issuance of notice demanding the amount
covered under the cheque and in that view the notice
has to be treated as defective in law. The Delhi High
Court in Sunglo Engineering India Pvt. Ltd. Vs. The
10 Crl. Appeal No. 1772-SB of 2002
11 Criminal Appeal No. 1011 of 2010
1224 [2025] 9 S.C.R.
Supreme Court Reports
State & Ors.12 quashed the complaint where the amount
demanded in the notice was double the amount of cheque
which was issued for Rs.1,00,00,000/-, akin to the facts
of the present case.
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
Kerala13, spoke on the rule of construction of a penal provision in its
true perspective by quoting from the English decision in Dyke vs.
Elliott14 which was again referred to in a more recent decision of
this Court in Balaji Traders vs. State of U.P. & Anr.15
“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.””
6.1 The Privy Council decision in Dyke vs. Elliott (supra) quoted
by this Court with approval stated that 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
12 MANU/DE/3805/2021
13 AIR 1963 SC 1116
14 (1872) 4 PC 184
15 2025 SCC OnLine SC 1314,
[2025] 9 S.C.R. 1225
Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul
been intended to be included if thought of. It was thereafter
observed that where the thing is brought within the words and
within the spirit, there a penal enactment is to be construed,
like any other instrument, according to the fair commonsense
meaning of the language used, and the court is not to find or
make any doubt or ambiguity in the language of a penal statute.
6.2 The interpretative canon of strict construction of penal statute
was highlighted also in the Craies Statute Law16 wherein the
decision of U.S. v. Wiltberger17 was referred to observing.
“The distinction between a strict construction and a
more free one has, no doubt, in modern times almost
disappeared, and the question now is, what is the
true construction of the statute? I should say that in
a criminal statute you must be quite sure that the
offence charged is within the letter of the law. This
rule is said to be founded on the tenderness of the
law for the rights of individuals, and on the plain
principle that the power of punishment is vested in
the Legislature, and not in the judicial department, for
it is the Legislature, not the Court, which is to define
a crime and ordain its punishment.”
6.3 Having noticed the above principle of construction of penal
statute, this Court in Suman Sethi (supra) concluded.
“ 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.”
(Para 7)
6.4 The proposition that the penal provision has to be construed
strictly was again asserted by this Court in K.K. Ahuja vs. V.K.
Vora & Anr.18 In the context of provision of Sections 141 and
16 7th Edn. at p.529
17 18 US 76 (1820)
18 (2009) 10 SCC 48
1226 [2025] 9 S.C.R.
Supreme Court Reports
138 of the NI Act it was observed in para 17 of the judgment that
penal statutes are to be construed strictly and that if conditions
are scraped, the courts will insist upon strict literal compliance.
It was stated that there is no question of inferential or implied
compliance.
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.
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.
[2025] 9 S.C.R. 1227
Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul
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.
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.
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.
10. Reverting to recollect the facts of this case, the cheque which was
drawn by the respondent was for Rs.1,00,00,000/- whereas in the
notice issued under Proviso (b) to Section 138 of the NI Act against
the respondent, appellant mentions the amount of Rs.2,00,00,000/-.
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
1228 [2025] 9 S.C.R.
Supreme Court Reports
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.
In view of the disposal of the main appeals, all the interlocutory
applications as may be pending stands disposed of.
Result of the case: Appeals dismissed.
†
Headnotes prepared by: Ankit Gyan
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