Failure To Mention Amount In Demand Notice U/s.138 (b) Of NI Act Would Make It Incomplete: Kerala High Court

The High Court was considering an appeal filed at the instance of the complainant in a cheque bounce case.

The Single Bench of Justice A. Badharudeen held, “Thus, the law emerges is that when there is demand for the actual amount covered by the cheque and consequential failure to pay the said amount within 15 days, then only an offence under Section 138 of the NI Act said to be committed by the drawer of the cheque and in the absence of demand for the actual/specific amount demanded in the notice, no offence would be completed, particularly, the ‘deemed offence’. 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.”

Advocate E.Narayanan represented the Petitioner, while Senior Public Prosecutor Alex M Thombra represented the Respondent.

Factual Background

On the dishonour of a cheque for ₹95,000, the complainant lodged a complaint before the Judicial First Class Magistrate Court-II, Perambra, alleging the commission of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881(NI Act), by the accused. The Trial Court secured the presence of the accused for trial and acquitted the accused after appreciating the evidence. Aggrieved thereby, the complainant approached the High Court.

Reasoning

The Bench, at the outset, reiterated that the offence under Section 138 of the NI Act is a deemed offence, and the offence would be complete only on the completion of five stages which includes issuance of cheque for a legally enforceable debt or liability, presentation of cheque within its time limit, i.e., presentation within three months, dishonour of the cheque, issuance of demand notice contemplated under proviso (b) to Section 138 within thirty days from the date of receipt of information regarding dishonour of the cheque, and failure of the drawer to make payment of the amount demanded within the stipulated time (15 days).

“Then complaint to be filed within 30 days after the 15 days notice period expires. 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”, it added.

On a meticulous reading of proviso (b) and (c) of Section 138 of the NI Act, the Bench refused to accept the contention of the appellant/complainant that when there is only a transaction between the complainant and the accused, the amount demanded is to be inferred from the notice, when the dishonour of the cheque was informed without specifying the amount demanded. The Bench made it clear that once the notice failed to mention the actual/specific amount due, the possibility of repaying the actual/specific amount which failed to be asked for would become impossible.

The Bench further stated 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. Thus holding the finding of the Magistrate to be justified, the Bench confirmed the impugned order and dismissed the appeal.

Cause Title: Rajesh K. v. Asokan P.K. (Neutral Citation: 2026:KER:36763)

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