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2000 Supreme(SC) 267

G.T.NANAVATI, S.N.PHUKAN
Suman Sethi – Appellant
Versus
Ajay K. Churiwal – Respondent


Judgement Key Points

Certainly. Based on the provided legal document, here are the key points:

  1. A notice of demand issued under Section 138 of the Negotiable Instruments Act is not invalid solely because it requests additional amounts such as damages, costs, or interest alongside the cheque amount, provided these additional claims are severable from the cheque amount (!) (!) .

  2. The words "said amount of money" in the proviso to Section 138(b) and (c) refer specifically to the cheque amount, not to any other amount claimed in the notice (!) (!) .

  3. In a demand notice, the primary requirement is that the cheque amount must be explicitly demanded. If the notice also includes other claims such as damages or interest, these are considered severable if separately specified, and their inclusion does not necessarily invalidate the notice (!) (!) .

  4. An omnibus demand without specifying what is due under the cheque may render the notice invalid, as it fails to meet the legal requirement of clarity and specificity (!) .

  5. The object of the notice is to give the drawer an opportunity to rectify the omission. If the cheque amount is paid within the prescribed period, the liability under Section 138 ceases, and additional claims can be pursued through civil proceedings (!) .

  6. Presumption under Section 139 applies only to the cheque amount, not to any other amounts claimed in the notice. Therefore, additional claims do not automatically invoke the presumption of liability under Section 138 (!) .

  7. When a notice states the cheque amount explicitly and also specifies additional claims such as incidental charges and notice charges, these claims are severable. The validity of the notice depends on whether the primary demand (the cheque amount) is clearly made (!) .

  8. The legal framework emphasizes that the notice should be read as a whole, and demands for amounts other than the cheque amount, if clearly specified and severable, do not invalidate the notice (!) .

  9. If the cheque amount is paid within the statutory period, the legal consequences under Section 138 are avoided, regardless of other claims mentioned in the notice (!) .

  10. The overall scheme of the law supports that claims for additional amounts such as damages, costs, or interest, which are severable from the cheque amount, do not invalidate the demand notice as long as the cheque amount is explicitly demanded (!) (!) .

Please let me know if you require further elaboration or assistance regarding this legal matter.


JUDGMENT

Phukan, J.-Leave granted.

2. This appeal is directed against the judgment and order dated 3.10.1997 passed by the Calcutta High Court in Criminal Revision No. 1611/97. By the impugned judgment, the High Court set aside the order of the Metropolitan Magistrate-16th, Calcutta passed in case No. C/1661/96.

3. Briefly stated the facts are as follows:

The appellant issued a cheque for Rs. 20,00,000/- (Rupees Twenty Lacs) in favour of respondent No. 1. The cheque was presented to the banker which was returned on 2nd August, 1996 with the remarks "Insufficient Fund". Thereafter within 15 days of return of the cheque, respondent No. 1 gave a notice of demand as required under proviso (b) to Section 138 of The Negotiable Instruments Act, 1881, as amended, for short the Act. As the appellant failed to meet the demand, a complaint was filed before the Metropolitan Magistrate. On perusal of the above notice, the Magistrate was of the view that the demand made in the notice being higher than the amount of the cheque, notice was bad in view of an earlier decision of the High Court. Respondent No. 1 approached the High Court by filing the revision petition which was allowed by the impugned o








































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