Omission to mention nature of Debt or Liability in statutory demand notice does not render it invalid under section 138 of Negotiable Instruments Act, 1881

The Kerala High Court observed that the omission or error in the notice under section 138 of the Negotiable Instruments Act to mention the nature of the debt or liability, does not render the same invalid.

The said ruling was held in the matter of B. Surendra Dass Vs. State of Kerala & Ors. (Crl. MC No. 3289 of 2015), decided on 30.05.2019.

Challenge

In the instant matter the Kerala High Court was considering a petition seeking to quash the criminal proceedings on the ground that no demand for payment of the amount of the cheque was made by the complainant as per the notice sent by him and therefore, the notice is defective and the proceedings initiated against the accused pursuant to such notice cannot be sustained.

Held

While perusing the contents of the statutory demand notice, the court observed that the complainant was legally entitled to realize the amount of the cheque from the petitioner and that the petitioner is legally bound to pay the amount of Rs.35,00,000 to the complainant within 15 days from the date of the notice.

The Bench also observed that Section 139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability. Hence, the complainant is entitled to take advantage of this statutory presumption.

Finally it was held that Section 138 nowhere mentions that there is a statutory mandate that the notice shall narrate the nature of the debt or liability and/or there is a requirement that the complainant must specifically allege in the complaint that there was a subsisting liability.