The Supreme Court has ruled that a demand notice issued under Section 138 of the Negotiable Instruments Act, 1881 must precisely state the same amount as the dishonoured cheque, holding that even minor discrepancies render the prosecution invalid.
The judgment came in Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul (2025 INSC 1133), decided by a Bench of Chief Justice B.R. Gavai and Justice N.V. Anjaria. The case arose after a cheque issued by the respondent was dishonoured, prompting Kaveri Plastics to issue a statutory demand notice. However, the amount specified in the notice differed from the actual cheque value.
The Court observed that issuing a correct demand notice is not a procedural formality but a substantive requirement. “For criminal liability to arise, the notice must demand payment of the exact cheque amount. Any mismatch in figures creates uncertainty and undermines the statutory safeguard available to the drawer,” the Bench stated.
Upholding the High Court’s decision to quash the complaint, the apex court dismissed the appeal filed by Kaveri Plastics. The ruling underscores that complainants must exercise strict care in drafting statutory notices, as even a minor error in the cheque amount can defeat the prosecution.
- Case: Kaveri Plastics Vs Mahdoom Bawa Bahrudeen Noorul
- Citation: 2025 INSC 1133
- Bench: CJI B.R. Gavai, J N.V. Anjaria
- Judgement Date: 19th September 2025
Click HERE for full judgment.
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