The case
Apputty v. Yahutty ( Crl.Rev.Pet No. 778 of 2004 ) (2025 KLT OnLine 2076) Decided on 28th May 2025 , Hon’ble Justice Dr. Kauser Edappagath, High Court of Kerala.
Facts of the case
The petitioner filed a private complaint under Section 142 of the Negotiable Instruments Act (for short, ‘the NI Act’) against the 1st respondent before the Judicial Magistrate of First Class, Tirur (for short, ‘the trial court’) alleging an offence under Section 138 of the NI Act, as S.T.No.4120 of 1995. The learned Magistrate dismissed the complaint as not maintainable, relying on the decision of the Single Bench of Calcutta High Court in Gopa Devi Ozha v. Sujit Paul, [1996 (2) KLT 886], which held that a notice of demand must be for the cheque amount and that if a higher or smaller amount is claimed in the notice, it is not a valid notice. This revision petition has been filed challenging the said order.
Observations of the Hon’ble High Court
(1) The Division Bench of Kerala High Court in Kunjan Panicker v. Christudas [1997 (2) KLT 539] took the view that a notice in which the cheque amount with interest and costs is also claimed cannot be said to be an invalid notice, but it is a valid notice.
(2) The Supreme Court, in Suman Sethi v. Ajay K. Churiwal, [(2000) 2 SCC 380] interpreted the phrase ‘the said amount of money’ found in proviso (b) to Section 138 of the NI Act, and held that the demand has to be made for the ‘said amount’, which refers to the cheque amount. It was also observed that the question whether a notice demanding an amount higher than the cheque amount is valid would depend on the language of the notice. It was held in paragraph 8 of the said decision thus:
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“8. It is a 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. the cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to the “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 be severable and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonoured cheque, the notice might well fail to meet the legal requirement and may be regarded as bad.” |
3.Dashrathabhai Trikambhai Patel v. Hitesh Mahendrabhai Patel and Another [2022 (7) KHC 61]. It was reiterated that notice demanding payment of ‘the said amount of money’ in Section 138 has to be interpreted to mean the cheque amount.
(4) Thus, the law is now well settled that the notice issued under Section 138(b) of the N.I.Act should be for the cheque amount. If no such demand is made, the notice would fall short of its legal requirement. However, the notice can include other claims or demands such as interest, cost, damages, etc. alongside the cheque amount, as long as they are separated and do not overshadow the demand for the cheque amount. In other words, the presence of additional claims in the demand notice would not negate its validity, provided the cheque amount is specified. If in a notice while giving the breakup of the claim, the cheque amount, interest, damage etc., are separately specified, the notice will not be bad. On the other hand, if, in the notice, an omnibus demand is made, without specifying what was due under the dishonoured cheque, the notice would be bad. Where, in addition to the cheque amount, interest, cost etc. are also demanded, whether the notice is bad or not would depend upon the language of the notice.
Decision
So the High Court set aside the impugned order and the matter is remanded to the learned Magistrate for fresh disposal in the light of the observations made in the order and also in the light of the dictum laid down in the decisions referred to in the case by High Court.