IMPORTANT POINT
Dishonour of cheque – In demand notice, demand has to be made for ‘cheque amount’ – Notice sans such demand would fall short of legal requirement.

ORDER :

1. Leave granted.

2. The appellant assails the final order dated 13.04.2023 passed by the High Court of Delhi at New Delhi in CRMC No. 2528/2023. As per the impugned order, the prayer of the petitioner for quashing the summoning order dated 19.01.2016 passed by the learned Metropolitan Magistrate, NI Act 02, South East, Saket Courts, New Delhi in CC No. 631164/2016 was dismissed.

3. Heard learned counsel appearing for the appellant as also the learned counsel appearing for the respondent.

4. Paradoxically, learned counsel on both sides relies on the decision of this Court in Suman Sethi vs. Ajay K. Churiwal and Another, (2002) 2 SCC 380. While the appellant contends that in terms of the dictum laid in the said decision, Annexure P-2 notice dated 02.12.2013 is invalid for non-adherence with the mandatory legal requirement under the provisions of the Negotiable Instruments Act, 1881 (for short ‘N.I. Act’), the learned counsel for the respondent would submit that in terms of the dictum laid down in the said decision, it is perfectly legal and valid. In view of the rival contentions, we have carefully gone through Annexure P-2 notice bearing in mind the dictum laid down by this Court in the case of Suman Sethi (supra).

5. The relevant paragraph of the decision in Suman Sethi’s case (supra) is extracted for a proper disposal of this case:

“8. It is well settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the “said amount” i.e. cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to “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 he severable - and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonored cheque, notice might well fail to meet the legal requirement and may be regarded as bad.

9. This Court had occasion to deal with Section 138 of the Act in Central Bank of India and Another vs. M/s. Saxons Farms and Others, JT (1999) 8 SC 58 and held that the object of the notice is to give a chance to the drawer of the cheque to rectify his omission. Though in the notice demand for compensation, interest, cost etc. is also made drawer will be absolved from his liability under Section if he makes the payment of the amount covered by the cheque of which he was aware within 15 days from the date of receipt of the notice or before complaint is filed.

As therein, some other sums were indicated in addition to the amount of cheque, it was, therefore, not held to be a case where the dispute might be existing in respect of the entire outstanding amount.”

(Emphasis added)

6. A bare perusal of the decision referred (supra) would reveal that a demand in addition to the cheque amount in a demand notice by itself would not make it invalid. In other words, as held therein, in the demand notice, demand has to be made for the ‘cheque amount’ and therefore, notice sans such demand would fall short of legal requirement. At the same time, we will reiterate the position that if in a notice while giving the break up of the claim the cheque amount interest, damages, etc. are separately specified and these additional claims would be severable, such demand would not invalidate the notice. In short, in a notice of demand made under the N.I. Act demand shall not be omnibus, there must be a clear demand for the cheque amount lest notice will be invalid. This law laid down as above has to be applied to decide the validity or otherwise of Annexure P-2-demand notice.

7. The last paragraph in Annexure-P2 notice carries the demand and we will refer to the demand m