Cheque Dishonour Notice Must Specify Amount Demanded, Else No Valid Notice In Eye Of Law: Kerala High Court

The Kerala High Court has held that a statutory demand notice issued in a cheque dishonour case must specifically mention the amount demanded, failing which there would be no legal notice in the eye of law.

“Only when the notice is specific about the amount, it is possible for the recipient of the notice to pay the amount which was specifically asked for to avoid penal consequences,” the Court observed.

Justice A Badharudeen made the observation while dismissing an appeal filed against the acquittal of an accused in a case arising from the dishonour of a cheque for ₹95,000.

The appeal challenged a judgment of the Judicial First Class Magistrate Court-II, Perambra, which had acquitted the accused after finding that the notice demanding payment of the amount covered by the dishonoured cheque did not specifically state the amount.

The complainant argued that the omission was inconsequential because there was only one transaction between the parties and the notice mentioned the dishonoured cheque, making it possible to infer the amount demanded.

Rejecting the contention, the Court observed that an offence under the Negotiable Instruments Act is complete only upon fulfilment of all the requirements prescribed by law, including issuance of a demand notice and failure to pay the amount demanded within the stipulated period.

Explaining the requirement of a specific demand, the Court observed:

“In proviso (b) to Section 138 of the NI Act, it has been specifically stated that “makes a demand for the payment of the said amount of money”. This phraseology would indicate that the notice should specifically state the amount to be paid consequential to the dishonour of the cheque. Only when the notice is specific about the amount, it is possible for the recipient of the notice to pay the amount which was specifically asked for to avoid penal consequences.”

The Court further observed,

“Once the notice failed to mention the actual/specific amount due, the possibility to repay the actual/specific amount which failed to be asked for would become impossible. Be it so, it could only be held that in the absence of specific mentioning of the amount in the demand notice there is no demand for payment of the actual/specific amount covered by the cheque in the eye of law.”

Holding that such a notice is incomplete, the court observed,

“If so, without much ado, it has to be held that when the complainant fails to mention the amount in the demand notice contemplated under proviso (b) to Section 138 of the NI Act, the notice is incomplete and therefore, the recipient of the notice could not pay the amount to avoid the penal consequences. In such circumstances, there is no legal notice in the eye of law.”

Finding the trial court's view justified, the High Court held that the acquittal did not require interference and dismissed the appeal.

For Appellant: Advocate E Narayanan

For Respondents: Advocate Alex M Thombra, Sr.Public Prosecutor