Delhi High Court
Ms Pharmaceuticals vs Nityam Pharma on 10 July, 2026
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 02, July 2026
Pronounced on: 10, July 2026
+ CRL.M.C. 1676/2025
MS PHARMACEUTICALS .....Petitioner
Through: Mr. Vipin Nandwani and Mr. Ajay
Chaudhary, Advs.
versus
NITYAM PHARMA .....Respondent
Through: Ms. Shweta Garg, Adv.
CORAM:
HON'BLE MS. JUSTICE MADHU JAIN
JUDGMENT
MADHU JAIN, J.
1. The present petition has been filed by the petitioner, MS
Pharmaceuticals, under Section 528 of the Bharatiya Nagarik Suraksha
Sanhita (hereinafter referred to as ‘BNSS’), challenging the Order dated
07.10.2024 passed by the learned Session Court, in Criminal Revision No.
2003/2024, titled Nityam Pharma & Ors. v. MS Pharmaceuticals, whereby
the learned session court has allowed the aforesaid revision petition and set
aside the summoning order dated 15.03.2021 passed in CC No. 198/2021.
FACTUAL MATRIX
2. The genesis of the matter lies in a business transaction between the
petitioner and respondent, wherein the petitioner supplied goods (Cefixime
Trihydrate IP Compected) to the respondent vide invoice dated 21.08.2019
for a sum of Rs.10,02,410/-, payable within 60 days, with interest of 24%
chargeable on default.
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3. Towards the said invoice value, the respondent issued three cheques
drawn upon Yes Bank amounting to Rs.10,02,410/-, all of which were
dishonoured with the remark ‘payment stopped by drawer’. It is the case of
the petitioner that upon the threat of legal action, the respondent made part
payments of Rs.2,00,000/- through NEFT.
4. Towards the balance invoice value of Rs.8,02,410/-, the respondent
issued 8 fresh cheques drawn upon HDFC Bank, Chandigarh. In the
interregnum, the respondent made further part payments of Rs.1,50,000/-
through NEFT, leaving an outstanding balance of Rs.6,52,410/-.
5. The said 8 cheques, upon presentation, were dishonoured with the
remark ‘funds insufficient’. A legal demand notice dated 21.03.2020 was
issued by the petitioner, specifying the invoice value, the cheques issued, the
part payments received, and demanding the outstanding amount of
Rs.6,52,410/-.
6. Upon failure of the respondent to make payment despite service of the
legal demand notice, the petitioner filed a complaint under Section 138 of the
Negotiable Instruments Act, 1881 (hereinafter referred to as the ‘NI Act‘),
registered as CC No. 198/2021, titled MS Pharmaceuticals v. Nityam
Pharma & Anr., wherein the learned Metropolitan Magistrate, Dwarka
Courts, summoned the respondent vide order dated 15.03.2021.
7. Aggrieved by the summoning order, the respondent preferred a revision
petition under Section 397 Cr.P.C. before the Sessions Court, primarily
contending that the legal demand notice dated 21.03.2020 did not reflect the
correct legal liability of the respondent, as the amount demanded
(Rs.6,52,410/-) was less than the cumulative value of the 8 cheques
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(Rs.8,02,410/-) forming the subject matter of the complaint, thereby rendering
the notice, and consequently the complaint, invalid.
8. The learned Sessions Court, vide impugned judgment dated
07.10.2024, allowed the revision petition and set aside the summoning order
dated 15.03.2021, holding that the legal demand notice was invalid inasmuch
as it did not reflect the legally enforceable debt corresponding to the impugned
cheques, and that the demand was omnibus in nature. The relevant portions
of the impugned judgment are reproduced hereinunder:
“9. The main argument of the Counsel for petitioner
is that the legal notice does not reflect the legal
liability of the petitioner towards the
respondent/complainant and hence, the summoning
order/impugned order is bad in law. The petitioner
has approached this Court stating that the amount
of the cheques is more than the due amount of
Rs.6,52,410/- and hence, the legal notice demanding
an amount lesser than that of the impugned cheques
is bad in law making the entire complaint invalid u/s
138 NI Act. Ld. Counsel has relied upon various
Judgments specially Mahdoom Bawa Bahrudeen
Noorul vs. Kaveri Plastics, (2024) 02 Del CK 0095,
to state that a legal demand notice asking the
accused to pay an amount which was not a legally
enforceable debt is bad in law making the legal
demand notice invalid. In the present case, it is
obvious that 8 cheques are subject matter of the
present complaint bearing no. 000127, 000128,
000129, 000130, 000131 and 000132 for the sum of
Rs. 1,00,000/- respectively and cheque no. 000133
and 000134 for a sum of Rs. 1,01,000/- and Rs.
1,01,410/- respectively. Thus, the total demand for
the above said cheques amounts to Rs. 8,02,410/-.
Hence, it is obvious that the amount demanded
through the legal notice and the complaint is lessSignature Not Verified
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than the total amount of the impugned cheques and
prima facie, legal liability is not proved. It is settled
law that for a claim to be made u/s 138 NI Act, the
legal demand notice must reflect the exact amount
of legal liability due. The Hon’ble Supreme Court
has recently held that a notice of demand made
under NI Act shall not be omnibus and there must
be a clear demand for the cheque amount else the
notice would be invalid1. It was further held that if
in a notice while giving break-up of the claim, the
cheque amount, interest, damages, etc. which are
separately specified and are severable, such
demand would not invalidate the notice. To quote, it
was held that
6. …..In other words, as held therein, in the demand
notice, demand has to be made for the “cheque
amount” and therefore, notice sans such demand
would fall short of legal requirement.
10.Thus in view of the above-mentioned Judgment,
in the opinion of the Court, the legal demand notice
in the present matter is invalid. There has been a
specific demand of Rs. 6,52,410/- in the last para of
the legal notice, which demand is not reflected from
the impugned cheques. Further in the complaint in
Para 14, it is stated that the petitioner was liable to
pay an amount of Rs. 6,52,410/- alongwith charges
and interest subject to the compliance of terms and
conditions settled upon. These charges and interest
have not been specified anywhere and are not even
part of the demand made in the legal notice, hence,
they cannot form part of legal liability u/s 138 NI
Act. Prima facie, the demand made in the legal
demand notice for a sum of Rs. 6,52,410/- only and
demand made in the complaint for a sum of Rs.
6,52,410/- alongwith charges and interest does not
match. Further, the impugned cheques in any case,
do not reflect legally enforceable debt of Rs.
6,52,410/-, the cheques being of a much higherSignature Not Verified
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amount than the amount of Rs. 6,52,410/-.
11.Hence, in view of the above discussion, the
impugned Order dt. 15.03.2021, summoning
petitioner no. 1 company and petitioner no. 2 is set
aside. Accordingly, revision petition is allowed.”
9. Aggrieved by the aforesaid impugned order, the petitioner has
approached this Court by way of the present petition.
SUBMISSIONS ON BEHALF OF THE PETITIONER
10. The learned counsel for the petitioner submitted that the learned
Sessions Court failed to appreciate that the only ground raised by the
respondent that the legal demand notice did not demand a legally enforceable
debt was misconceived, as the notice dated 21.03.2020 demanded only the
amount actually due and payable, i.e., Rs.6,52,410/-, after accounting for all
part payments received.
11. It was submitted that the learned Sessions Court committed a grave
error in returning a finding that legal liability was ‘not proved’ without
relegating the parties to trial, particularly when the notice categorically
specified the invoice value, the cheques issued, the part payments received,
and the resultant outstanding liability.
12. It was further submitted that the notice was not an omnibus demand,
since it clearly and separately specified each of these particulars, and therefore
there was no defect in the notice as contemplated in Suman Sethi v. Ajay K.
Churiwal, (2000) 2 SCC 380, wherein it was held that a notice is bad in law
only where an omnibus demand is made without specifying what is due under
the dishonored cheque, and not otherwise.
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13. The learned counsel for the petitioner placed reliance on M/s Alliance
Infrastructure Project Pvt. Ltd. & Ors. v. Vinay Mittal, 2010 SCC OnLine
Del 182, to submit that a notice is invalid only where the principal amount
demanded exceeds the principal amount actually payable, without indicating
the basis for the excess; whereas in the present case, the demand was less than,
and not more than, the cheque amount, and hence the notice was legal and
valid.
14. It was further submitted that the judgment relied upon by the affirmed
before the Sessions Court, namely Mahdoom Bawa Bahrudeen Noorul v.
Kaveri Plastics (2024) 02 Del Chandhok 0095, was factually distinguishable,
as it concerned a notice demanding double the cheque amount on account of
a typographical error, whereas no such typographical error or excess demand
existed in the present case.
15. The learned counsel also submitted that it is not the cheque amount but
the legally recoverable debt which is required to be demanded in a notice
under Section 138(b) NI Act, and since the petitioner had correctly demanded
only the legally recoverable debt, the notice did not suffer from any infirmity.
16. The learned counsel places reliance on Union of India v. Major
Bahadur Singh, (2005) 8 SCC 368, to submit that each case turns on its own
facts, and that the learned Sessions Court erred in mechanically relying upon
judgments dealing with notices demanding amounts in excess of the cheque
amount, which were factually inapplicable to the present case where the
demand was admittedly less than the cheque amount.
17. It is submitted that the impugned judgment dated 07.10.2024 is based
on surmises and conjectures and is liable to be set aside, and that the petitioner
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has not filed any other petition challenging the said judgment before this Court
or any other superior court.
SUBMISSIONS ON BEHALF OF THE RESPONDENT
18. Per contra, the learned counsel for the respondent submits that the
complaint filed by the petitioner is not maintainable as it is based on cheques
aggregating to ₹8,02,410/-, whereas the statutory demand notice sought
payment of only ₹6,52,410/-. It is contended that the learned Sessions Court
rightly noticed this material discrepancy, which is also reflected in the
metadata form accompanying the complaint. Relying upon Suman Sethi v.
Ajay K. Churiwal, (2000) 2 SCC 380 and Kaveri Plastics v. Mahdoom Bawa
Bahrudeen Noorul, (2025) 259 Comp Cas 658, learned counsel submitted
that a complaint founded on a defective statutory notice demanding an amount
different from the cheque amount is not maintainable and, therefore, the
impugned revisional order warrants no interference.
19. Learned counsel for the respondent submitted that no offence under
Section 138 of the NI Act is made out as the petitioner presented the cheques
for their full amount despite having received part payments prior to their
presentation, without making the mandatory endorsement under Section 56 of
the Act. Consequently, the cheques did not represent a legally enforceable
debt to the extent of their face value on the date of presentation. Reliance is
placed on Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel,
(2023) 1 SCC 578.
20. Learned counsel for the respondent submitted that the complaint is
founded upon an omnibus statutory demand notice which fails to specify the
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break-up of the principal amount, interest, and other charges claimed. It was
contended that such a vague and indefinite notice does not satisfy the
mandatory requirements of Section 138 of the NI Act and, therefore, the
complaint is not maintainable and the present petition is liable to be dismissed.
21. Learned counsel for the respondent submitted that the complaint is not
maintainable as it seeks prosecution in respect of eight dishonoured cheques
pertaining to different dates of presentation and dishonour, each constituting
a separate and distinct transaction. It was contended that in view of Sections
218 and 219 of the Code of Criminal Procedure, 1973, each distinct offence
is required to be tried separately, and the joinder of all eight cheque dishonour
allegations in a single complaint is impermissible.
22. Learned counsel for the respondent, in support of the aforesaid
submissions, also placed reliance upon the following decisions:
Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul, (2025) 259
Comp Cas 658
Yankay Drugs and Pharmaceuticals Ltd. v. Citi Bank, (2001) 106
Comp Cas 662
Sunglo Engineering India Pvt. Ltd. v. State Criminal MC No. 3 of
2021, order dated 21-12-2021 (Del).
Gaurav Mittal v. State (NCT of Delhi), 2023 SCC OnLine Del 1528
Jay Hanuman Enterprises v. State of Gujarat (CRA. 1625/2023)
decided on 9.10.2024.
ANALYSIS AND FINDINGS
23. I have considered the submissions made by the learned counsels for the
parties.
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24. The principal question that falls for consideration is whether the learned
Session Court was justified in setting aside the summoning order by holding
the statutory demand notice to be invalid merely because the amount
demanded therein was less than the aggregate amount covered by the
dishonoured cheques.
25. Section 138 of the NI Act reads as under:
“138. Dishonour of cheque for insufficiency, etc., of
funds in the account.–Where any cheque drawn by
a person on an account maintained by him with a
banker for payment of any amount of money to
another person from out of that account for the
discharge, in whole or in part, of any debt or other
liability, is returned by the bank unpaid, either
because of the amount of money standing to the
credit of that account is insufficient to honour the
cheque or that it exceeds the amount arranged to be
paid from that account by an agreement made with
that bank, such person shall be deemed to have
committed an offence and shall, without prejudice to
any other provision of this Act, be punished with
imprisonment for 4 [a term which may be extended
to two years’], or with fine which may extend to
twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall
apply unless–
(a) the cheque has been presented to the bank within
a period of six months from the date on which it is
drawn or within the period of its validity, whichever
is earlier;
(b) the payee or the holder in due course of the
cheque, as the case may be, makes a demand for the
payment of the said amount of money by giving a
notice; in writing, to the drawer of the cheque, 5
[within thirty days] of the receipt of information bySignature Not Verified
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him from the bank regarding the return of the
cheque as unpaid; and
(c) the drawer of such cheque fails to make the
payment of the said amount of money to the payee
or, as the case may be, to the holder in due course
of the cheque, within fifteen days of the receipt of the
said notice.
Explanation.–For the purposes of this section,
“debt of other liability” means a legally enforceable
debt or other liability.”
26. A plain reading of Section 138 of the NI Act makes it evident that for
constituting an offence under the said provision, the conditions stipulated in
clauses (a), (b) and (c) of the proviso are mandatory. In the present case, the
controversy centres around clause (b) of the proviso, namely, the requirement
that the payee must make a demand for payment of the ‘said amount of
money’ by issuing a statutory notice within the prescribed period.
27. Before adverting to the facts of the present case, this Court considers it
apposite to examine the legal position governing the controversy in issue, as
emerging from the judgments relied upon by the learned counsel appearing
for the parties.
28. It is a pertinent to refer to the judgment of the Supreme Court in Suman
Sethi v. Ajay K. Churiwal, (2000) 2 SCC 380, wherein the Court examined
the scope of the expression ‘the said amount of money’ occurring in clauses
(b) and (c) of the proviso to Section 138 of the NI Act. The Supreme Court
held that the expression refers to the cheque amount and that a statutory notice
must contain a demand for the cheque amount. At the same time, it was
clarified that the notice has to be read as a whole. The relevant extract is
reproduced hereinbelow:
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“6. We have to ascertain the meaning of the words
the “said amount of money” occurring in clauses
(b) and (c) to the proviso to Section 138. Reading
the section as a whole we have no hesitation to
hold that the above expression refers to the words
“payment of any amount of money” occurring in
the main Section 138 i.e. the cheque amount. So
in a notice, under clause (b) to the proviso,
demand has to be made for the cheque amount.
Dr Dhavan, learned Senior Counsel has urged
that Section 138 being a penal provision has to be
construed strictly. We may refer the decision of
this Court in M. Narayanan Nambiar v. State of
Kerala [AIR 1963 SC 1116 : 1963 Supp (2) SCR
724] . This Court considered the rule of
construction of a penal provision and quoted with
approval the following passage of the decision of
the Judicial Committee in Dyke v. Elliott [(1872)
4 PC 184 : 26 LT 45] . The passage runs as
follows:
“No doubt all penal statutes are to be construed
strictly, that is to say, the court must see that the
thing charged as an offence is within the plain
meaning of the words used and must not strain
the words on any notion that there has been a slip,
that there has been a casus omissus, that the thing
is so clearly within the mischief that it must have
been intended to be included if thought of. On the
other hand, the person charged has a right to say
that the thing charged although within the words,
is not within the spirit of the enactment. But
where the thing is brought within the words and
within the spirit, there a penal enactment is to be
construed, like any other instrument, according
to the fair commonsense meaning of the
language used, and the court is not to find or
make any doubt or ambiguity in the language of
a penal statute, where such doubt or ambiguitySignature Not Verified
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would clearly not be found or made in the same
language in any other instrument.”
7.There is no ambiguity or doubt in the language
of Section 138. Reading the entire section as a
whole and applying common sense, from the
words, as stated above, it is clear that the
legislature intended that in a notice under clause
(b) to the proviso, the demand has to be made for
the cheque amount. According to Dr Dhavan, the
notice of demand should not contain anything
more or less than what is due under the cheque.
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.
13. In the notice in question the “said amount” i.e.
the cheque amount has been clearly stated.
Respondent 1 had claimed in addition to the
cheque amount, incidental charges and notice
charge. These two amounts are severable. In the
notice it was clearly stated that on failure to
comply with the demand necessary legal steps will
be taken up. If Respondent 1 had paid the cheque
amount he would have been absolved from the
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criminal liability under Section 138. Regarding
other claims, a civil suit would be necessary.”
(emphasis supplied)
29. The decision of this Court in Alliance Infrastructure Project (P) Ltd.
v. Vinay Mittal, 2010 SCC OnLine Del 182, is also relevant to the issue
involved in the present case. The relevant portion of the judgment reads as
under:
“The expression “amount of money” used in
Section 138(b) of Negotiable Instrument Act, to my
mind, in a case of this nature would mean the
amount actually payable by the drawer of the
cheque to the payee of the cheque. Of course, if the
payee of the cheque makes some demands on
account of interest, compensation, incidental
expenses, etc. that would not invalidate the notice so
long as the principal amount demanded by the payee
of the cheque is correct and is clearly identified in
the notice. When the principal amount claimed in
the notice of demand is more than the principal
amount actually payable to the payee of the cheque
and the notice also does not indicate the basis for
demanding the excess amount, such a notice cannot
be said to be a legal and valid notice envisaged in
Section 138(b) of Negotiable Instrument Act. In such
a case, it is not open to the complainant to take the
plea that the drawer of the cheque could have
escaped liability by paying the actual amount due
from him to the payee of the cheque. In order to
make the notice legal and valid, it must necessarily
specify the principal amount payable to the payee of
the cheque and the principal amount demanded
from the drawer of the cheque should not be more
than the actual amount payable by him though
addition of some other demands in the notice by
itself would not render such a notice illegal or
invalid.
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30. In Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul, (2025) 259
Comp Cas 658, the cheque in question was admittedly issued for
Rs.1,00,00,000/-, whereas the statutory notice demanded Rs.2,00,00,000/-,
i.e., double the cheque amount. The complainant attempted to justify the
discrepancy by contending that it was merely a typographical error. The
Supreme Court rejected this explanation and held:
“3.3. The fact situation is that the cheque in
question was issued for Rs. 1,00,00,000 whereas in
both the aforesaid notices sent to the accused-
drawer of the cheque upon bouncing of the cheque,
the complainant asked for the payment of Rs.
2,00,00,000. At that stage, the respondent accused
filed an application seeking discharge contending
that the notice of demand as aforementioned was not
in terms of proviso (b) to section 138 of the
Negotiable Instruments Act, therefore, the
complaint was not maintainable. The plea for
discharge was dismissed by the Metropolitan
Magistrate on October 6, 2021. The respondent
herein then filed a petition before the High Court,
culminating into the impugned judgment and order
whereby the High Court held that as the demand
notice under proviso (b) of section 138 of the
Negotiable Instruments Act, was at variance with
the cheque amount, the same was invalid rendering
the complaint liable to be quashed.
xxx
10. Reverting to recollect the facts of this case, the
cheque which was drawn by the respondent was for
Rs. 1,00,000,00 whereas in the notice issued under
proviso (b) to section 138 of the Negotiable
Instruments Act against the respondent, the
appellant mentions the amount of Rs. 2,00,000,00.
The rigours of law on this score being strict, the
defence would not hold good that the different
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amount mentioned in the notice was out of
inadvertence. Even if the cheque number was
mentioned in the notice, since the amount was
different, it created an ambiguity and differentiation
about the “said amount”. The notice stood invalid
and bad in law. The order of quashment of notice
was eminently proper and legal.”
31. The Supreme Court in Dashrathbhai Trikambhai Patel v. Hitesh
Mahendrabhai Patel, (2023) 1 SCC 578 revisited the principles governing
the validity of a statutory notice under Section 138 of the NI Act. The relevant
paragraph is extracted hereinbelow:
“28. In K.R. Indira v. G. Adinarayana [K.R.
Indira v. G. Adinarayana, (2003) 8 SCC 300 : 2003
SCC (Cri) 2002] , it was held that the notice did not
demand the payment of the cheque amount but the
loan amount. It was observed that for the purposes
of proviso (b), the amount covered in the
dishonoured cheque must be demanded. In Rahul
Builders [Rahul Builders v. Arihant Fertilizers &
Chemicals, (2008) 2 SCC 321 : (2008) 1 SCC (Civ)
553 : (2008) 1 SCC (Cri) 703] , the drawee
demanded the payment of Rs 8,72,409 which was
higher than the sum of Rs 1,00,000 represented in
the cheque. It was reiterated that the phrase
“payment of the said amount” in proviso (b) would
mean the cheque amount. Since the demand in the
notice was not severable as the cheque amount
could not be severed from the demand for the
additional amount, it was held that it was an
omnibus notice. S.B. Sinha, J. writing for a two-
Judge Bench of this Court observed [Rahul
Builders v. Arihant Fertilizers & Chemicals, (2008)
2 SCC 321 : (2008) 1 SCC (Civ) 553 : (2008) 1 SCC
(Cri) 703] : (Rahul Builders case [Rahul
Builders v. Arihant Fertilizers & Chemicals, (2008)Signature Not Verified
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2 SCC 321 : (2008) 1 SCC (Civ) 553 : (2008) 1 SCC
(Cri) 703] , SCC pp. 324-25, para 10)
“10. … One of the conditions was service of a notice
making demand of the payment of the amount of
cheque as is evident from the use of the phraseology
“payment of the said amount of money”. … It is one
thing to say that the demand may not only represent
the unpaid amount under cheque but also other
incidental expenses like costs and interests, but the
same would not mean that the notice would be vague
and capable of two interpretations. An omnibus
notice without specifying as to what was the amount
due under the dishonoured cheque would not
subserve the requirement of law. Respondent 1 was
not called upon to pay the amount which was
payable under the cheque issued by it. The amount
which it was called upon to pay was the outstanding
amounts of bills i.e. Rs 8,72,409. The noticee was to
respond to the said demand. Pursuant thereto, it was
to offer the entire sum of Rs 8,72,409. No demand
was made upon it to pay the said sum of Rs 1,00,000
which was tendered to the complainant by cheque
dated 30-4-2000. What was, therefore, demanded
was the entire sum and not a part of it.”
32. The aforesaid decisions, relied upon by both the parties, lay down the
general principles governing the validity of a statutory notice under Section
138 of the NI Act. They hold that the demand contemplated under clause (b)
of the proviso to Section 138 must ordinarily relate to the amount covered by
the dishonoured cheque and that the statutory notice must be read as a whole.
They further hold that where, in addition to the cheque amount, the notice
separately specifies claims towards interest, costs or other incidental charges,
such claims are severable and do not invalidate the notice. Conversely, where
the notice contains only an omnibus demand without specifying the amount
due under the dishonoured cheque, it may fail to satisfy the statutory
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requirement.
33. However, the factual matrix of the present case is materially different,
since the demand in the notice was reduced on account of admitted part
payments and not because of an erroneous or inflated demand. The
applicability of the aforesaid principles must, therefore, be examined in the
peculiar facts of the present case. As aptly observed by Lord Denning:
“… Each case depends on its own facts and a close
similarity between one case and another is not
enough because even a single significant detail may
alter the entire aspect. In deciding such cases, one
should avoid the temptation to decide cases (as said
by Cordozo) by matching the colour of one case
against the colour of another. To decide, therefore,
on which side of the line a case falls, the broad
resemblance to another case is not at all decisive.”
34. At this juncture, this Court deems it appropriate to examine the demand
notice in question. The relevant extracts thereof are reproduced hereinbelow:
“11. That you, the above addressee, further assured
our client that the said cheques would be honoured
on their presentation.
12. That our above-named client presented the
above-mentioned three cheques for encashment to
its banker, i.e., Syndicate Bank, Mohan Garden,
New Delhi. However, the said cheques were
received back unpaid with the endorsement of the
Bank “STOPPED BY DRAWER”.
13. That my client has requested Addressee Nos. 2
and 3, i.e., Mr. Nikhil Goel and Kanti Nanad Shori,
via e-mails, WhatsApp messages, and phone calls
on several occasions to make the balance payment.
….That in lieu of the same, you, the Addressee No.
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2, had issued a further 8 fresh cheques in favour of
our client, i.e.:
Cheque No. 000127 dated 11.01.2020 for an amount
of Rs. 100,000/-;
Cheque No. 000128 dated 17.01.2020 for an amount
of Rs. 100,000/-;
Cheque No. 000129 dated 21.01.2020 for an amount
of Rs. 100,000/-;
Cheque No. 000130 dated 29.01.2020 for an amount
of Rs. 100,000/-;
Cheque No. 000131 dated 04.02.2020 for an amount
of Rs. 100,000/-;
Cheque No. 000132 dated 12.02.2020 for an amount
of Rs. 100,000/-;
Cheque No. 000133 dated 18.02.2020 for an amount
of Rs. 101,000/-; and
Cheque No. 000134 dated 22.02.2020 for an amount
of Rs. 101,410/-,
all cheques being drawn on HDFC Bank,
Chandigarh.
15. That you, the above addressee, further assured
our client that the said cheques would be honoured
upon presentation.
16. That our above-named client presented the
above-mentioned three cheques, namely Cheque
Nos. 000132, 000133 and 000134, for encashment
through its banker, Syndicate Bank, Mohan Garden,
New Delhi. However, the said cheques were
returned unpaid with the endorsement “Funds
Insufficient”, vide the Banker’s Return Memos dated
27.02.2020.
17. That Cheque No. 000130 was also presented by
our client for encashment through its banker,
Syndicate Bank, Mohan Garden, New Delhi.
However, the said cheque was returned unpaid with
the endorsement “Funds Insufficient”, vide the
Banker’s Return Memo dated 28.02.2020.
18. That thereafter, our above-named client
presented the remaining four cheques, namely
Cheque Nos. 000127, 000128, 000129 and 000131,
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for encashment through its banker, Syndicate Bank,
Mohan Garden, New Delhi. However, the said
cheques were returned unpaid with the endorsement
“Funds Insufficient”, vide the Banker’s Return
Memos dated 02.03.2020.
19. That you, Addressee Nos. 2 and 3, on behalf of
Addressee No. 1, deposited the following amounts
through IMPS/ECS/NEFT/Cheques against the
above-stated bills:
i. NEFT No. N331190323988701 dated 27.11.2019
– Rs. 100,000/-
ii. NEFT No. N333190325689585 dated 29.11.2019
– Rs. 100,000/-
iii. NEFT No. N017200354983281 dated
17.01.2020 – Rs. 50,000/-
iv. NEFT No. N036200366249506 dated 05.02.2020
– Rs. 50,000/-
v. NEFT No. N059200379672813 dated 29.02.2020
– Rs. 50,000/-
20. That the payment deposited by Addressee Nos. 2
and 3, on behalf of Addressee No. 1, was only Rs.
3,50,000/- (Rupees Three Lakhs Fifty Thousand
Only) against the total liability of Rs. 10,02,410/-
(Rupees Ten Lakhs Two Thousand Four Hundred
Ten Only) as on the date of issuance of this notice.
21. That it is now apparent that you have
deliberately, with mala fide intention to defraud and
cheat our client, failed to pay/deposit the balance
amount of Rs. 6,52,410/- (Rupees Six Lakhs Fifty-
Two Thousand Four Hundred Ten Only).
22. That the issuance and subsequent dishonour of
the aforesaid cheques constitute a criminal offence.
Our above-named client has instructed us to initiate
proceedings under Section 138 of the Negotiable
Instruments Act, 1881, along with appropriate
criminal proceedings under the relevant provisions
of the Indian Penal Code, as applicable to the facts
and circumstances of the case. You, the above-
named addressees, intentionally and mala fidely
issued the said cheques with the knowledge and
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intention that they would be dishonoured due to
closure of the account, thereby cheating our client.
In view of the aforesaid facts and circumstances, we,
on behalf of our above-named client, hereby call
upon you, the above-named addressee, to pay the
total outstanding amount of Rs. 6,52,410/- (Rupees
Six Lakhs Fifty-Two Thousand Four Hundred Ten
Only) within 15 days from the date of receipt of this
notice, failing which our client has instructed us to
initiate appropriate proceedings against you for
recovery of the said amount under Section 138 of the
Negotiable Instruments Act, 1881, as well as under
other applicable provisions of Indian law, entirely
at your own cost, risk and consequences.
You are also liable to pay a sum of Rs. 21,000/-
(Rupees Twenty-One Thousand Only) towards the
cost of this legal notice.”
35. On a plain reading of the statutory notice, it cannot be said that the
notice is omnibus in nature. It specifically records the invoice value, the
dishonoured cheques, the part payments received through NEFT on different
dates and the manner in which the outstanding amount of Rs.6,52,410/- was
arrived at before calling upon the respondent to make payment thereof.
Whether, in view of the admitted part payments, the statutory requirement
under Section 138 read with Section 56 of the NI Act stood satisfied, and
whether the dishonoured cheques continued to represent a legally enforceable
debt, are issues which depend upon the evidence led by the parties and the
factual foundation established during trial. Such disputed questions could not
have been conclusively determined while exercising revisional jurisdiction
against a summoning order.
36. The learned Session Court, while setting aside the summoning order,
has primarily relied upon the decision in Mahdoom Bawa Bahrudeen Noorul
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v. Kaveri Plastics, 2024 SCC OnLine Del 1302 which was affirmed by the
Supreme Court in Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul,
(2025) 259 Comp Cas 658. The learned counsel for the respondent has also
placed substantial reliance on the said decision. However, this Court is of the
considered view that the said judgment is distinguishable on facts and does
not govern the controversy involved in the present case. In the said case, the
cheque amount was Rs.1,00,00,000/-, whereas the statutory notice demanded
Rs.2,00,00,000/- solely on the ground of an alleged typographical error. The
Supreme Court held that such a notice was invalid as the amount demanded
was neither the cheque amount nor was there any legal basis disclosed for the
excess demand.
37. The present case stands on a different footing. The statutory notice
specifically sets out the invoice value, the particulars of all the dishonoured
cheques, the part payments admittedly received from the respondent, and the
manner in which the outstanding amount of Rs.6,52,410/- has been computed
before calling upon the respondent to make payment thereof. On its face, the
statutory notice cannot be characterised as an omnibus notice or as a notice
making an arbitrary or inflated demand. The controversy here is not whether
the notice ex facie demands an incorrect amount, but whether, in view of the
admitted part payments, the dishonoured cheques continued to represent a
legally enforceable debt and whether the provisions of Section 56 of the NI
Act were attracted. Those issues cannot be conclusively determined while
examining the validity of the summoning order in exercise of revisional
jurisdiction.
38. Similarly, the reliance placed by the respondent on Dashrathbhai
Trikambhai Patel v. Hitesh Mahendrabhai Patel, (2023) 1 SCC 578 does
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not conclude the issue arising in the present case. In Dashrathbhai (supra),
the Supreme Court was considering an appeal against acquittal after a full-
fledged trial where the complainant had admitted receipt of part payments and
the Courts below had returned findings of fact that the cheque no longer
represented the legally enforceable debt on the date of its presentation. It was
in those proved facts that the Court examined the effect of Section 56 of the
NI Act and held that, in the absence of the requisite endorsement, the offence
under Section 138 was not attracted.
39. The present case is factually distinguishable from the aforesaid
decision. The challenge before this Court arises from an order passed in
revision setting aside the summoning order. At this stage, there is no
adjudication on whether the admitted part payments were made towards the
very dishonoured cheques, whether Section 56 was attracted in the facts of
the case, whether the cheques continued to represent a legally enforceable
debt on the date of presentation, or what legal effect, if any, the alleged
absence of endorsement would have. These are disputed questions which
require appreciation of evidence and, therefore, could not have been
conclusively determined while examining the legality and correctness of the
summoning order in exercise of revisional jurisdiction.
40. The learned Session Court proceeded on the premise that since the
amount demanded in the statutory notice was lower than the aggregate amount
covered by the dishonoured cheques, the notice was necessarily invalid. In
doing so, it did not examine that the statutory notice itself disclosed the
invoice value, the dishonoured cheques, the admitted part payments received
from the respondent and the manner in which the outstanding amount of Rs.
6,52,410/- had been computed. Whether such reduced demand correctly
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represented the legally enforceable debt in view of the admitted part
payments, and the legal consequences flowing therefrom, are matters
requiring appreciation of evidence and could not have been conclusively
determined while exercising revisional jurisdiction against the summoning
order.
41. At the stage of issuance of process, the Court is only required to
examine whether a prima facie case is disclosed from the complaint and the
material placed on record. It is not expected to adjudicate disputed questions
of fact or return findings on issues which require evidence.
CONCLUSION
42. Therefore, the impugned judgment dated 07.10.2024 passed by the
learned Session Court is hereby set aside. Consequently, the present petition
is allowed, and the summoning order dated 15.03.2021 passed by the learned
Metropolitan Magistrate in CC No. 198/2021 is restored.
43. The parties shall appear before the learned Trial Court on 08.08.2026.
The learned Trial Court shall proceed with the complaint in accordance with
law and decide the same on its own merits, uninfluenced by any observations
contained in the impugned revisional order or the present judgment.
44. The petition is accordingly disposed of in the above terms. Pending
application(s), if any, stand disposed of.
45. Copy of this order be communicated to the concerned learned Trial
Court for necessary information and compliance.
(MADHU JAIN)
JUDGE
JULY 10, 2026/RM/b
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