Kerala High Court: Demand Notice Without Specifying Amount Invalid Under Section 138 NI Act

The Kerala High Court has ruled that a demand notice issued under Section 138 of the Negotiable Instruments Act must clearly mention the exact amount claimed from the drawer of a dishonoured cheque. The Court held that failure to specify the cheque amount renders the notice legally defective and prevents the offence from being completed under the law.

Justice A. Badharudeen delivered the judgment while dismissing an appeal filed by a complainant in a cheque bounce case involving a dishonoured cheque of ₹95,000. The complainant had challenged the acquittal of the accused by a Magistrate Court, arguing that the amount could be inferred from the surrounding circumstances and the parties' transaction history.

Rejecting this contention, the High Court emphasised that Section 138 creates a statutory offence that can arise only after strict compliance with all procedural requirements. One such requirement is the issuance of a written demand notice seeking payment of the cheque amount within the prescribed period. The Court observed that the expression “said amount of money” used in the statute requires the complainant to specifically mention the amount demanded.

According to the Court, unless the exact amount is stated, the recipient cannot reasonably be expected to make payment within the statutory period to avoid criminal consequences. A notice merely referring to the dishonoured cheque without demanding a specific sum does not satisfy the legal mandate. Holding that the notice in the present case was incomplete and invalid, the Court affirmed the acquittal and dismissed the appeal.