The Delhi High Court has clarified that under Section 138 of the Negotiable Instruments Act, 1881, a legal notice sent to a cheque drawer must specifically demand payment of the cheque amount, failing which the complaint is not maintainable.
In the case titled Barun Bhanot v. M/S Annie Impexpo Marketing Pvt Ltd & Anr (CRL.L.P. 45/2018), Justice Amit Mahajan dismissed the petitioner’s plea, stating that the absence of a clear demand for ₹1,00,000—being the cheque amount—rendered the legal notice invalid under Section 138(b) of the NI Act.
“The language of Section 138(b) of the NI Act provides that the payee or the holder in due course ought to make a demand for the payment of ‘the said amount of money’ by giving a notice in writing to the drawer of the cheque. The term ‘the said amount of money’ refers to the cheque amount,” the Court stated.
The case involved dishonour of two cheques worth ₹50,000 each. The petitioner sent a legal notice asking the respondents to “clear all dues” but failed to specifically demand the cheque amount of ₹1,00,000. The Court observed that this did not fulfil the statutory requirement under Section 138(b).
“The legal demand notice failed to make a demand for the payment of cheque amount… Instead, it vaguely asked the drawer to clear all dues,” the Court noted.
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The High Court also upheld the trial court's finding that the respondents had successfully rebutted the presumption under Section 139 of the NI Act by showing inconsistencies in the petitioner’s accounts and double billing for the same consignment.
“Even if the petitioner’s case is taken at its highest, once the respondents raised a probable defence, the burden shifted back to the petitioner to prove actual debt,” the Court emphasized.
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The Court found no perversity in the Magistrate's decision and affirmed that acquittal further strengthens the presumption of innocence of the accused.
“A decision of acquittal must not be interfered with unless appreciation of evidence is found to be perverse,” the Court concluded.
Case title: Barun Bhanot v. M/S Annie Impexpo Marketing Pvt Ltd & Anr
Case no.: CRL.L.P. 45/2018
Appearance: For the Appellant : Mr. Anand Ranjan, Mr. Abhishek Kumar Singh & Mr. Alok Kumar, Advs. For the Respondents : Ms. Dharini Windlass, Adv. through V.C
