LAW FOR ALL : For a valid prosecution under Section 138 NI Act, the demand notice must specifically and correctly mention the cheque amount. Any discrepancy, even a typographical error, is fatal.

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.

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.

(2000) 2 SCC 380

(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

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.

(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

(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

(1999) 8 SCC 221

(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

(2023) 1 SCC 578

MCRC 5458/2013

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)

LAW FOR ALL

LawforAll

Saturday, September 20, 2025

For a valid prosecution under Section 138 NI Act, the demand notice must specifically and correctly mention the cheque amount. Any discrepancy, even a typographical error, is fatal.