Searching Case Laws & Precedent on Legal Query.....!
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Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Legal requirement of notice under Section 138 - A valid Section 138 notice must demand the payment of the cheque amount within 15 days of receipt, serving as a statutory condition precedent to filing a complaint. The notice should specify the amount due and be properly served to the drawer. Failure to issue or serve this notice correctly renders subsequent proceedings invalid ["M/S BIODIVERSITY CONSERVATION INDIA PRIVATE LIMITED vs M/S VISTA ITCL (INDIA) LIMITED - Karnataka"], ["N.Ramadoss vs V.Paramasivam - Madras"], ["Ramkrit Jadav VS Samir Kumar Das - Calcutta"].
Purpose of the notice - The primary purpose is to provide the drawer an opportunity to pay the dishonoured cheque amount within 15 days, thereby avoiding penal consequences under Section 138 ["N.Ramadoss vs V.Paramasivam - Madras"], ["Sakshi Yadav vs State of U.P. - Allahabad"], ["Somnath Paul VS Debasish Dey - Calcutta"].
Form and contents of the notice - The notice must clearly specify the cheque number, date, amount, and demand for payment. Omnibus or vague demands, or notices that do not specify the amount or are improperly addressed, are considered invalid ["Aryan Biological Corporation VS Vishwakarma Metal Box - Delhi"]. For example, a notice that makes an omnibus demand without specifying the cheque amount fails to meet legal requirements ["Aryan Biological Corporation VS Vishwakarma Metal Box - Delhi"].
Service of notice - Proper service, such as via registered post or in accordance with law, is essential. Evidence of receipt by the drawer is critical; non-receipt or improper service can invalidate the proceedings ["Ram Kasyyap Chits Pvt. Ltd. , Visakhapatnam VS Chinnam Krishna Murthy - Crimes"], ["Komala Unnikrishnan VS Manoj Kumar K. - Kerala"], ["G. Raja Ram VS State of A. P. - Dishonour Of Cheque"].
Consequences of non-compliance - If the notice is not issued, not served properly, or fails to demand the specific cheque amount, the complaint under Section 138 may be dismissed or considered invalid ["G. Raja Ram VS State of A. P. - Dishonour Of Cheque"], ["G. Raja Ram VS State OF A. P. , through Public Prosecutor, High Court of A. P. - Andhra Pradesh"], ["G. Raja Ram VS State of A. P. - Dishonour Of Cheque"].
Legal precedents emphasizing notice validity - Courts have consistently held that the issuance and proper service of a demand notice are mandatory, and failure to do so can be a ground for dismissing the complaint ["Rithvik Bhattacharjee v. Eskay Tower Pvt. Ltd. - Calcutta"], ["Komala Unnikrishnan VS Manoj Kumar K. - Kerala"], ["Ram Kasyyap Chits Pvt. Ltd. VS Chinnam Krishna Murthy - Andhra Pradesh"].
Analysis and Conclusion:To draft a valid 138 Notice, ensure it explicitly demands the cheque amount within 15 days of receipt, clearly states the cheque details, and is served through proper legal channels with proof of receipt. Avoid vague or omnibus demands, and verify proper service to comply with legal requirements and prevent the dismissal of proceedings.
Cheque bounce cases are common in India, often arising from business transactions or personal loans gone sour. Under the Negotiable Instruments Act, 1881 (NI Act), Section 138 provides a powerful remedy for payees when a cheque is dishonored due to insufficient funds or other reasons. But before filing a complaint, you must issue a statutory demand notice under Section 138(b). Many cases fail because the notice is improperly drafted or served.
If you're thinking, I Want to Draft a 138 Notice, this guide is for you. We'll break down the essential legal principles, step-by-step drafting tips, and pitfalls to avoid, drawing from judicial precedents. Note: This is general information based on established case law and statutes. It is not a substitute for professional legal advice. Consult a lawyer for your specific situation.
A Section 138 notice is a written demand sent to the drawer (issuer) of a dishonored cheque. It must be issued within 15 days of receiving bank information about the dishonor. The drawer then has 15 days from receipt to pay the cheque amount. Failure triggers criminal liability under Section 138.
The notice is a mandatory precondition for filing a complaint under Section 142. Courts strictly interpret these requirements, as seen in various judgments. For instance, the notice must demand payment of the said amount of the dishonored cheque, and serving it correctly creates a presumption of service if sent by registered post to the right address Indo Automobiles VS Jai Durga Enterprises - Rajasthan.
Failure to comply can invalidate your case. In one ruling, the court noted: The fact that the accused failed to reply to the statutory notice under Section 138 of the NI Act would lead to the inference that there was merit in the complainant's case Arihant Distributors VS State of Telangana - 2022 Supreme(Telangana) 700.
The notice must be in writing and served within 15 days of receiving dishonor information Central Bank Of India VS Saxons Farms - Supreme CourtSuman Sethi VS Ajay K. Churiwal - Supreme Court. This period is strict and non-extendable for the payee, unlike the 30-day window (extendable) for filing the complaint KIRSHNA TEXPORT & CAPITAL MARKETS LTD. VS ILA A. AGRAWAL - Supreme Court.
Your notice should explicitly mention:- Cheque number, date, and amount.- Reason for dishonor (e.g., insufficient funds).- A clear demand for payment of the cheque amount within 15 days.
Demanding additional amounts like interest or costs does not invalidate the notice if the cheque amount is specified separately Suman Sethi VS Ajay K. Churiwal - Supreme Court. However, an omnibus demand without isolating the cheque amount may render it invalid Suman Sethi VS Ajay K. Churiwal - Supreme Court.
Example phrasing: You are hereby called upon to pay the sum of Rs. exact cheque amount being the amount of the dishonored cheque No. number dated date, within 15 days of receipt of this notice.
Serve the notice on the drawer, not directors or others unless vicariously liable under Section 141 KIRSHNA TEXPORT & CAPITAL MARKETS LTD. VS ILA A. AGRAWAL - Supreme Court. In company cases, specific averments are needed for officers, but the primary notice goes to the drawer Davinder Kaur VS State of West Bengal - 2015 Supreme(Cal) 306.
Courts have quashed proceedings where notices were improperly directed, emphasizing: It is drawer of Cheque, who has to be made liable for the payment of amount of money due to the payee Dipikaben Alpesh Patel VS State of Gujarat - 2021 Supreme(Guj) 359.
Send via registered post with acknowledgment due (RPAD) to the drawer's correct address. Once sent, service is presumed effectiveIndo Automobiles VS Jai Durga Enterprises - Rajasthan. Personal service is also valid, but proof is key.
In a case, the court upheld service via RPAD, noting the accused received it but failed to pay, as required under Section 138(c) Electronics Trade and Technology Develp. Corpn. Ltd. v. Indian Technologists and Engineers (Electronic) Pvt. Ltd. - 1996 Supreme(Online)(SC) 20.
To ensure compliance:1. Gather Documents: Cheque, bank memo, and dishonor date.2. Draft Precisely: - Header: Legal Notice under Section 138 of NI Act. - Facts: Describe transaction, cheque issuance, presentation, and dishonor. - Demand: Isolate cheque amount; mention 15-day deadline. - Avoid extras: No new claims beyond cheque amount to prevent invalidation.3. Serve Correctly: RPAD to drawer's address; retain postal receipt.4. File Complaint Timely: Within 30 days of notice expiry (extendable) KIRSHNA TEXPORT & CAPITAL MARKETS LTD. VS ILA A. AGRAWAL - Supreme Court.
Sample Structure (Not a Template):
```Your AddressDate
To,Drawer's Name & Address
Subject: Demand Notice u/s 138 NI Act for Dishonored Cheque No. XXX
Dear Sir,1. On date, you issued cheque No. [](https://supremetoday.ai/doc/judgement/) for Rs. amount towards debt.2. Presented on date, dishonored on date for reason.3. Pay Rs. cheque amount within 15 days, failing which legal action.
Yours,Your Name```
Premature Complaints: Filing before 15-day notice period ends is invalid. One court held: complaint filed before expiry of statutory period—It is a premature complaint—Hence, essential ingredients of Section 138 held not satisfied GANESH SINGH VS STATE OF U. P. - 2014 Supreme(All) 933.
Presumption of Debt: Under Sections 118/139, a dishonored cheque presumes liability. Accused must rebut; non-reply strengthens your case Usha Khare W/o A. K. Khare VS Harpal Singh Chhabda, S/o Harbansh Singh Chhabda - 2024 Supreme(Chh) 665NELSON vs SHEELA - 2012 Supreme(Online)(KER) 25768.
Company Cases: Directors/officers need specific roles alleged under Section 141. Company secretaries can be liable without extra averments Davinder Kaur VS State of West Bengal - 2015 Supreme(Cal) 306.
Fraud Allegations: If forgery claimed, parallel proceedings may prejudice; courts scrutinize Angrej Singh S/o Sh. Chanan Singh VS State of Rajasthan, through PP. - 2018 Supreme(Raj) 14.
Burden of Proof: Complainant must show enforceable debt; gaps lead to acquittal Ashalatha VS K. Yakub - 2020 Supreme(Kar) 1270.
In another instance: When the accused appeared, a notice of accusation was put to him... Thus, it is apparent that issuance of notice to the accused demanding the payment of the money is an essential ingredient of Section 138 of the NI Act THE THORE CO-OPERATIVE AGRICULTURE SERVICE SOCIETY LTD vs Milap Chand - 2025 Supreme(Online)(HP) 9037.
If no payment, file complaint in the Magistrate's court with jurisdiction over the bank's location. Attach proof of service. Courts often impose compensation alongside imprisonment.
Drafting a 138 notice correctly sets a strong foundation for recovery. With rising digital transactions, cheque bounces persist—stay informed. For personalized help, contact a legal expert.
This article references judicial decisions like KIRSHNA TEXPORT & CAPITAL MARKETS LTD. VS ILA A. AGRAWAL - Supreme Court, Indo Automobiles VS Jai Durga Enterprises - Rajasthan, and others for educational purposes.
#Section138Notice, #ChequeBounce, #NIA1881
In view of the aforesaid, we as the debenture trustees do hereby call upon you and demand you to pay to BPHCL the aforesaid amount of INR 2,60,00,000/-. being the amount of the said dishonored cheque by pay-order or bank-draft or cash within 15 days of receipt of this notice, failing which, we shall ... In view of the aforesaid, we as the Debenture Trustees do hereby call upon you and demand you to pay to BPHCL the aforesaid amount of INR 15,54,00,000/- being the amount of the said dishonoured cheques by pay-order or bank-draft or cash wi....
Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved.” Section 138 provides that the section shall not apply unless the drawer of the cheque fails to make the payment within 15 days of the receipt of the said notice. ... As noticed above, the entire purpose of requiring a notice is to give an opportunity to the drawer to pay the cheque amount within 15 days of service of notice#HL....
Do you want to say anything? A. Money was there in my account. He knew that. Q5. Petitioner no.1 further stated that he had sent you a Demand Notice with Registered Post A/D and you received that Notice. Do you want to say anything? ... notice by adopting different strategies and escape from legal consequences of Section 138 of the Act. ... Do you want to say anything? A. No, he does not know anything. Q10. Do you want to say anything regarding the i....
Section 138 for discharge, in whole or in part, of any debt or other liability.
of the said notice. ... ... Accused 2 has issued the cheque knowing fully well that he has no Bank balance to their credit and he cannot honour the cheque for want of funds alone. He has not taken any steps to honour the cheque and arrange payment as required under S.138(C) of the Negotiable Instruments Act. ... It reads thus: ... "138. ... The said notice was received and acknowledged by the accused. No payment has been made by the accused as required under S.138(C) of the Negotiable....
Service of notice of demand in Clause (b) of the Proviso to Section 138 is the condition precedent for filing a complaint under Section 138 of the N.I. Act. ... I have perused notice Exhibit-3 which carries with it the information that a cheque that was drawn on UCO Bank by the accused person, was presented and dishonoured for want of sufficient fund. ... Bank dishnounred the cheque for want of sufficient fund in the account. By convening all these information the drawee through his la....
When the accused appeared, a notice of accusation was put to him for the commission of an offence punishable under Section 138 of the NI Act, to which he pleaded not guilty and claimed to be tried. 4. ... Thus, it is apparent that isfsuance of notice to the accused demanding the payment of the money is an essential ingredient of Section 138 of the NI Act. It was laid down by the Hon’ble Supreme Court in Shakti Travel & Tours v. ... Therefore, the essential ingredient of Section 138 of the NI Act, that a....
The fact that the accused failed to reply to the statutory notice under Section 138 of the NI Act would lead to the inference that there was merit in the complainant's case. ... The lower appellate court failed to appreciate that the mandatory notice under Section 138(b) of the NI Act was not issued as per the procedure laid down under law. The complainant issued the notice, demanding the interest. The defence set up by the complainant was civil in nature. ... In the case at hand, even after purportedly....
under Section 138 of the Act of 1881. ... When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not. ... After returning of the cheque, non-applicant issued a legal notice demanding the cheque amount, however the cheque amount was not repaid by the applicant-accused and an application was filed be....
In spite of the notice Ext.P5 dated November 14, 1997, the accused did not re-pay the amount. Therefore, the complainant filed the complaint under section 138 of the Negotiable Instruments Act before the learned Magistrate. ... For all these reasons, accepting the evidence of PW1, I hold that Ext.P1 cheque was issued by the accused to discharge the liability of `75,000/-, which when presented for collection was returned dishonoured for want of sufficiency of funds in the account of the accused and in spite of notice, the....
Act was sent through R.P.A.D., which was received by the accused on 12.01.2019. The said legal notice was replied on 29.01.2019, whereby the accused denied the contention raised by the present respondent no.2 in his Demand Notice and stated of taking a loan of Rs.1,00,000/- in the month of November, 2015 for a period of one year at the monthly interest of 5%. It is stated that the said Cheque of 24.12.2018 was deposited by the respondent no.2 in his Corporation Bank, Sudan Branch, Account No.346000101000161, which was dishonoured on 28.12.2018 with endorsement “Today’s Opening Balance Insuff....
Thus, the guilt against the accused has been proved beyond reasonable doubt. The legal notice as required under Section 138 of the N.I. Act has also been issued to the accused for which, he did not respond by making the payment of the cheque amount. 8. Learned counsel for the appellant in his argument submitted that, the accused was the drawer of the cheque at Ex.P-1, which when presented for realisation, came to be dishonoured for the reason of insufficiency of fund.
Thereby, the cheque amount was fraudulently changed from Rs. 15,000/- to Rs. 1,15,000/- and the same was presented in the bank and was got dishonoured. Act to the complainant mentioned therein regarding the cheque amount was Rs. 1,15,000/- whereupon, the complainant came to know of this entire fraud and forgery. The complaint so submitted by Harbhajan Singh was forwarded to the Police Station Sri Karanpur for investigation under Section 156(3) Cr.P.C. 1973 where, an FIR No. 212/2007 was registered for the offences under Section 418, 419, 420, 465, 467, 468, 471 and 120B IPC and investigation....
Act calling upon the accused company to make payment of the amount of Rs. 50,00,000/-. The accused company paid Rs. 15,00,000/- in response to the notice, but the balance amount of Rs. 35,00,000/-was not paid by the accused company. 2. The cheque was dishonoured on presentation at Allahabad Bank, Red Cross Place Branch, Calcutta on October 31, 2011. The notice was issued under Section 138(b) of the N.I.
Statutory notice as is contemplated under Section 138 N.I. Act (herein after referred to as the Act) was given to applicant Ganesh Singh only but inspite of service of notice no payment was reimbursed and hence complaint under Section 138 of the Act as well as under Section 420 I.P.C. was filed before the Magistrate to punish both the applicants for the aforesaid offences. It is further alleged that complainant deposited the said cheque in her PNB bank, Kesari Bazar branch, but the cheque was dishonored and received back to the complainant on 8.2.2002 with bank endorsement ....
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