A valid demand notice under Section 138 of the Negotiable Instruments Act must specify the exact amount related to the dishonored cheque; failure to do so invalidates the cognizance.

JUDGMENT :

Chandra Shekhar Jha, J.

1. Heard learned counsel appearing on behalf of the parties.

2. The present application has been filed for quashing the cognizance order dated 12.10.2023 passed by learned Judicial Magistrate 1^st Class, Siwan in connection with Complaint Case No. 1619 of 2023, where cognizance was taken for the offence under section 138 of the Negotiable Instruments Act.

3. While arguing this matter, learned counsel heavily relied upon the legal notice from wherein, it transpires that the compliance of Section 138 (b) of the Negotiable Instrument Act, 1881 not appears to be followed as demand was not raised for the “said amount” i.e. the amount for which the instrument under dispute was drawn by opposite party no. 2. It is submitted that on this score alone, the entire cognizance order is bad in eyes of law and same be fit to be set aside/quashed. Besides the aforesaid main illegality, it is submitted by learned counsel appearing for the petitioner that there was dispute between the parties related with their business and deed of partnership as executed between them on 15.10.2019 was not complied with in its true spirit. It is also submitted that the instrument in issue was issued by a company i.e. M/s Harishchandra Builders Pvt. Ltd., a company registered under Compaies Act, 2013 but said company was not made an accused in this case. Notice appears issued to petitioner in personal capacity. Learned counsel appearing for petitioner relied upon the legal report of Hon’ble Supreme Court as available through Upasana Mishra Vs. Trek Technology India Pvt. Ltd. reported through 2023 SCC OnLine SC 1740.

4. Mr. D.K. Sinha, learned senior counsel appearing for the opposite party no. 2 submitted that the firm of opposite party no. 2 is a proprietorship firm and, therefore, the notice was issued in personal capacity. It is pointed out that the firm of petitioner is also a proprietorship firm. Mr. Sinha Further submitted that the demand of Rs. 35 lacs was out of total outstanding demand of Rs. 80,20,000/- and it was so raised to protect the interest of opposite party no. 2 in case of summary suit, if any initiated in future regarding recovery of the aforesaid amount.

5. It would be apposite to reproduce the provision of Section 138 (b) of the Negotiable Instrument Act, for the sake of better understanding of the position of law.

“138. Dishonour of cheque for insufÏciency, etc., of funds in the account.—

“Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufÏcient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for 1[“a term which may extend to two year”], or with fine which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless-

(a) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.

(b) The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer, of the cheque, 2[“within thirty days”] of the receipt of information by him from the bank regarding