Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul
Criminal Appeal Nos. ____ of 2025
(@ SLP (Crl.) Nos. 11184-11185/2024)
Bench
-
Hon’ble Mr. Justice B.R. Gavai
-
Hon’ble Mr. Justice N.V. Anjaria (Author of Judgment)
Issue for Determination
Whether a notice under Proviso (b) to Section 138 NI Act is valid when the amount demanded in the notice differs from the cheque amount, and if a typographical error can save such notice.
Facts
-
A cheque of ₹1,00,00,000 was issued by the accused company (Nafto Gaz India Pvt. Ltd.).
-
The cheque was dishonoured for “Funds Insufficient.”
-
The complainant issued statutory demand notices on 08.06.2012 and 14.09.2012, but demanded ₹2,00,00,000 instead of the cheque amount of ₹1,00,00,000.
-
Accused sought discharge, contending that notice was invalid.
-
The High Court of Delhi quashed the complaint, holding that the notice was not in compliance with Section 138(b).
-
Complainant argued in Supreme Court that it was only a typographical error.
Arguments
-
Appellant (Kaveri Plastics):
-
Wrong mention was a clerical error (copy-paste mistake).
-
Notice should be read as a whole, cheque details were correctly mentioned.
-
Rigid technicality should not defeat substantive justice.
-
-
Respondent (Accused):
-
Both notices repeatedly demanded double the cheque amount.
-
This was not a mere error; it vitiated the statutory requirement.
-
Law requires strict compliance.
-
Legal Principles Discussed
-
Section 138 NI Act – Ingredients and role of Proviso (b).
-
Interpretation of the phrase “said amount of money” = cheque amount (from Suman Sethi v. Ajay K. Churiwal, (2000) 2 SCC 380).
-
Strict compliance required in penal statutes (Rahul Builders v. Arihant Fertilizers, (2008) 2 SCC 321; Dashrathbhai Patel v. Hitesh Patel, (2023) 1 SCC 578).
-
Several High Court precedents holding notices invalid where cheque amount was misstated.
-
Principle: Penal statutes must be construed strictly; typographical errors cannot dilute mandatory compliance.
Held
-
Notice must demand the exact cheque amount.
-
Even a typographical error is fatal, since Section 138(b) is a mandatory precondition.
-
Since notices in this case demanded ₹2,00,00,000 instead of the actual cheque amount of ₹1,00,00,000, both notices were invalid.
-
Consequently, the complaint under Section 138 NI Act was not maintainable.
Decision
-
Appeals dismissed.
-
High Court’s order upholding quashment of the complaint sustained.
-
Pending interlocutory applications disposed of.
2025 INSC 1133
Page 1 of 25
Reportable
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NOS._______ OF 2025
(@SPECIAL LEAVE PETITION (CRL.) NOS. 11184-11185/2024)
KAVERI PLASTICS …Appellant(s)
VERSUS
MAHDOOM BAWA BAHRUDEEN NOORUL
…Respondent(s)
J U D G M E N T
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.
Page 2 of 25
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 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.
Page 3 of 25
“4. That in pursuance of the MoU, in terms of
part liability towards my clients, you the noticees
issued the following cheque:
CHEQUE NO. DATE BANK & BRANCH AMOUNT
876229 30.04.2012 Indian Overseas Bank, 1 Crore
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:
‘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;
Page 4 of 25
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 NO. DATE BANK & BRANCH AMOUNT
876229 30.04.2012 Indian Overseas Bank, 1 Crore
B/o R.K. Puram 1,00,00,000/-
Page 5 of 25
5. That you the noticees assured my client
that the aforesaid cheque shall be honoured on
presentation.
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
Page 6 of 25
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 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
Page 7 of 25
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
Page 8 of 25
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 & 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. Kush Chaturvedi 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.
1
(2000) 2 SCC 380
2
(1999) 8 SCC 221
Page 9 of 25
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
Page 10 of 25
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
Page 11 of 25
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 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.
3
(2003) 8 SCC 300
Page 12 of 25
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.
“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
4
(2000) 2 SCC 380
Page 13 of 25
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
Page 14 of 25
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.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
5
(1999) 8 SCC 221
6
(2008) 2 SCC 321
Page 15 of 25
(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 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
Page 16 of 25
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
7
(2023) 1 SCC 578
8
MCRC 5458/2013
9
2001 DCR 609
Page 17 of 25
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 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.
10 Crl. Appeal No.1772-SB of 2002
Page 18 of 25
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 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
11 Criminal Appeal No.1011 of 2010
12 MANU/DE/3805/2021
13 AIR 1963 SC 1116
Page 19 of 25
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
14 (1872) 4 PC 184
15 2025 SCC OnLine SC 1314,
Page 20 of 25
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. 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
16 7th Edn. at p.529
17 18 US 76 (1820)
Page 21 of 25
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 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.
18 (2009) 10 SCC 48
Page 22 of 25
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
Page 23 of 25
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.
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.
Page 24 of 25
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.1,00,000/- 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
Page 25 of 25
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.
In view of the disposal of the main appeals, all
the interlocutory applications as may be pending stands
disposed of.
………………………………..,CJI.
[ B.R. GAVAI]
………………………………….., J.
[ N.V. ANJARIA ]
NEW DELHI;
SEPTEMBER 19, 2025.
(VK)
