Question: Will demand notice be faulted if any other sum is indicated in addition to the said amount u/s.138 (b) of N.I. Act?
The answer is no. According to the provision of The Negotiable Instrument Act,1881, Section 138 (B), the answer deals with the demand notice that the chequeholder gives. When we read Clause (b) and (c) of the proviso to Section 138, it is specifically mentioned that a whole word means “said amount of money.”
This is referred to as the words “payment of any amount of money,” which means the cheque amount. So, in the notice under Clause (b) to the proviso, the holder can demand only the cheque amount.
The settled principle of the law is that the demand notice should be read as a whole and not considered only part of it. In the demand notice, the holder or payee can demand payment for the said amount, i.e., the cheque amount.
It is also true that if no demand is made out in a legal notice, which is mandatorily required under 138 (b), such notice is not legally valid as per the Negotiable Instrument Act of 1881.
But in some cases, if the holder adds another amount, such as he has a Demand for a claim, the interest of loss, money, cost, etc.
Now, the main question is whether the holder adds such types of amounts. Then, what is the validity of said notice? We can say that it depends on the language of the demand notice.
When the holder demands these types of other amounts with the cheque amount, he has to specify that amount with details in the notice. It does not affect the validation of such demand notice.
Thus, To make a valid demand notice as per the proviso of s.138 (b) of the N.I. Act, the notice should be mentioned in a separate portion of the due amount of the bounced cheque and other amounts that are additionally claimed, i.e., interest of loss, cost, etc.
The legislature clearly explains that in provision S.138 of the N.I. Act, it is mentioned that regarding the cheque bounce matter, the drawer would be liable for conviction if he did not make the payment within 15 days after receiving the notice.
So if the drawer pays the cheque bounce amount within the above period or before the complaint is filed against him, he might be at the end of his legal liability regarding the cheque u/s.138. For the recovery of other sums, which is additionally mentioned in the notice, the payee should apply for the civil proceeding. In that jurisdiction, he can pray for that remedy.
Case Laws:
(1) In the case of Suman Sethi vs. Ajay K. Churiwal and another (AIR SC 828), The Supreme Court held that, as per the proviso clause (b) to the s.138 of N.I. Act, Demand has to be made for the cheque amount. However, it cannot be faulted if, in addition to the “cheque amount,” any other sum by way of interest, cost, etc., is separately indicated.[1].
(2) In the case of Central Bank of India v. M/s. Saxons Farms, (1999) 8 J.T. (SC) 58, The Supreme Court held the object of the notice is to give a chance to the drawer of the cheque to rectify his omission. Yet demand compensation, interest, etc., are also included in the notice, and the drawer will be exempted from his liability u/S. 138 If, within 15 days from the date of receipt of the notice, he makes payment of the sum covered by the cheque of which he was informed or before a complaint is filed.[2].
(3) In the case of Shailesh Kumar Agrawal vs. State of U.P. and others (2000 CRI. L. J. 2921), The Allahabad High Court held that the amount of cheque has been clearly mentioned in the notice. After the service of the notice, no amount was tendered by the applicant; in case he had tendered the amount of the cheque, it might have been argued that no offense under Section 138 N.I. The act is made out. The applicant can not avoid the payment after the service of the notice on the ground that the cost of the notice was also demanded.[3].
(4) In the case of Prasanta Kumar Basu vs. Narendra Kumar Anchalia and Anr (2007 CRI. L. J. 1026), The Calcutta High Court held that, in the notice, besides the cheque amount, the complainant mentioned the interest that would be charged against the accused, the same cannot be held to be bad in the eye of law.[4].
Conclusion :
Held after the above discussion, in a demand notice, if other amounts are mentioned with the cheque amount in a separate portion in detail, the said notice can not be faulted in a legal term of the N.I. Act u/s.138 (b).
Reference:
(1) Suman Sethi vs. Ajay K. Churiwal and another (AIR SC 828).
(2) Central Bank of India v. M/s. Saxons Farms, (1999) 8 J.T. (SC) 58.
(3) Shailesh Kumar Agrawal vs. State of U.P. and others, (2000 CRI. L. J. 2921).
(4) Prasanta Kumar Basu vs. Narendra Kumar Anchalia and Anr, (2007 CRI. L. J. 1026).
