Summary
The Court held that a demand notice under proviso (b) to Section 138 of the Negotiable Instruments Act must demand the very amount of the dishonoured cheque. A notice demanding Rs. 2 crore for a Rs. 1 crore cheque was invalid even though it correctly gave the cheque details, and a plea of typographical error was no defence. The High Court's quashing of the complaint was upheld.
Issues
- Whether a notice under proviso (b) to Section 138 of the NI Act is valid when the amount demanded differs from the amount of the dishonoured cheque.
- Whether the discrepancy can be excused as a typographical error, or cured by reading the notice as a whole.
Provisions considered
- Section 138, proviso (b), Negotiable Instruments Act, 1881The words 'the said amount of money' in proviso (b) were read with 'payment of any amount of money' in the main section and held to mean the cheque amount. A demand notice for a different amount does not satisfy this mandatory condition of the offence, and the complaint cannot be maintained. (¶¶ 5, 5.1, 5.2, 7, 7.1, 8, 8.1, 9)
Held
- Service of a notice demanding payment of 'the said amount of money' is an essential condition of the offence under Section 138. Read with the main section, that expression means the cheque amount (following Suman Sethi, K.R. Indira, Rahul Builders and Dashrathbhai Trikambhai Patel). (¶¶ 5.1, 5.2, 5.2.1, 5.2.2, 5.3, 5.4, 7, 7.1)
- Section 138 is a penal provision creating a technical offence and must be construed strictly; its conditions require literal compliance, with no room for inferential or implied compliance. (¶¶ 6, 6.1, 6.2, 6.3, 6.4, 9)
- The notice must state the exact cheque amount. Once the cheque amount is specifically demanded, the sender may also claim interest, notice charges, legal costs and similar sums. A notice that omits the cheque amount or states a different amount is invalid, even if it gives the other cheque details; the principle of reading the notice as a whole does not apply. (¶¶ 8, 8.1)
- Even a typographical error in the amount is fatal to the notice. In any event, the plea of inadvertence could not be accepted here because the same wrong amount appeared in both notices sent to the drawer. (¶¶ 8.2, 10)
- Since the notices demanded Rs. 2 crore for a cheque of Rs. 1 crore, they were invalid, and the High Court rightly quashed the complaint. (¶¶ 10, 11)
Result
Appeals dismissed; the High Court's order quashing the complaint under Sections 138, 141 and 142 of the NI Act was upheld.