Notice Under S.138 NI Act Invalid If Omnibus Demand Is Made Without Specifying Cheque Amount : Supreme Court

Finding the demand raised in a notice issued under Section 138 of the Negotiable Instruments Act, 1881, to be omnibus in nature, the Supreme Court quashed a criminal case for the dishonour of a cheque. The Supreme Court bench comprising Justices CT Ravikumar and PV Sanjay Kumar while referring to the case Suman Sethi, in para 6 noted that: “A bare perusal of the decision referred would reveal that a demand in addition to the cheque amount in a demand notice by itself would not make it invalid. This law laid down as above has to be applied to decide the validity or otherwise of Annexure P-2-demand notice.” Further, the Supreme Court, while examining the legality of the notice of demand served to the appellant found that an omnibus demand for Rs.6,50,000/- was made in addition to the demand for interest @12 per annum from the date of returning of the cheque, Rs.50,000/- towards damages and Rs.5,500/- as notice charge. The Court held the demand notice to be invalid as per the law laid down in the case of Suman Sethi, and accordingly allowed the criminal appeal by setting aside the impugned summoning order passed by the learned Metropolitan Magistrate, Negotiable Instruments Act, Saket Court, New Delhi.