Section 138 of Negotiable Instruments Act, 1881, Business Transactions, Cheque Dishonour and Manner of Notice

Section 138 of Negotiable Instruments Act, 1881, Business Transactions, Cheque Dishonour and Manner of Notice 

Section 138 - Legal Notice - Form of Notice - Manner of Notice - C filed a complaint against A in respect of cheque dishonour arising out of a transaction related to metal box - Cheque was presented by C on 8 March 2013 which got dishonoured after which a legal notice was also sent by C to A - When Magistrate issued notice to A, A filed a petition under S.482 of Code of Criminal Procedure, 1973 to set aside the Order of Magistrate - Held, "it is accepted proposition of law that a notice has to be read as a whole and in the demand notice, a demand for cheque amount is required to be made. If no such demand is made, then the demand notice would not pass the test of legal requirement of section 138 NI act. If in addition to the cheque amount, the claims of interest, cost etc. are also made, then the validity of the notice would depend upon the language of the notice.  If in the demand notice, the breakup of the claims i.e., cheque amount, interest, damages etc. are specifically and distinctly mentioned then the demand notice is not bad in law". Petition filed by accused was allowed on facts of the case. - Aryan Biological Corporation v. Vishwakarma Metal Box [2020] GCtR 2000 (Delhi)

Section 138 - Role of Notice - Condition Precedent - "For initiating criminal action as per section 138 of NI Act, the service of notice is a condition precedent". - Aryan Biological Corporation v. Vishwakarma Metal Box [2020] GCtR 2000 (Delhi)

Section 138 - Notice - Omnibus Demand in Notice - C sent a legal notice to A after cheque issued by A was dishonoured - Held,  when the cheque amount is not separately mentioned and identifiable from entire outstanding amount and in notice dated 14.03.2013, an omnibus demand is made without specifying the cheque amount then "such notice dated 14.03.2013 failed to meet legal requirements of section 138(b) of NI Act. The demand notice accordingly is bad in law i.e., as per section 138(b) of NI Act." Complaint filed by C was quashed. - Aryan Biological Corporation v. Vishwakarma Metal Box [2020] GCtR 2000 (Delhi)