Case Title: Kaveri Plastics vs. Mahdoom Bawa Bahrudeen Noorul
Court: Supreme Court of India
Case Number: Criminal Appeal (2025 INSC 1133)
Judgment Date: 19 September 2025
Bench / Judges: Justice Sanjay Karol & Justice S.C. Sharma
Law Involved: Section 138 of the Negotiable Instruments Act, 1881
Title:
“Cheque Bounce Case: Legal Notice Must Match Cheque Amount under Section 138 NI Act”
The Story / Incident
- Kaveri Plastics entered into a land transaction agreement (MoU) with Nafto Gaz India Pvt. Ltd.
- As part of the deal, the accused company issued a cheque worth ₹1 Crore.
- When the complainant presented the cheque in the bank, it was dishonoured (bounced) due to insufficient funds.
- After a cheque bounces, the law requires the complainant to send a legal demand notice before filing a case.
- Here, the complainant sent two notices (in June and September 2012).
- Mistake in the notice: Instead of demanding the cheque amount ₹1 Crore, the complainant wrongly demanded ₹2 Crores in both notices.
- The accused argued: “Since the notice does not demand the correct amount, it is invalid. Hence, the complaint itself cannot survive.”
The Court Journey
- Metropolitan Magistrate:
- Accepted the complaint.
- Rejected the accused’s plea to discharge (dismiss) the case.
- Delhi High Court:
- Found that the demand in the notice (₹2 Crores) did not match the cheque amount (₹1 Crore).
- Held that such a notice is not valid under law.
- Quashed the complaint.
- Supreme Court (2025):
- The complainant appealed to the Supreme Court.
- Argument: “The mention of ₹2 Crores was just a typographical mistake. The cheque details like number, date, and bank were correctly mentioned, so the case should not fail because of a small error.”
Supreme Court’s Analysis
1. Requirement of Valid Notice
- Section 138(b) of the Negotiable Instruments Act clearly states that the notice must demand “the said amount of money”, i.e., the exact cheque amount.
- If a cheque is for ₹1 Crore, the demand in the notice must also be for ₹1 Crore only.
2. Typographical Error Argument
- The Court did not accept the “typo” excuse because:
- The error was repeated in both notices.
- Penal provisions like Section 138 require strict compliance; there is no room for approximation or casual errors.
3. Precedent Cases Referred
The Court relied on earlier judgments:
- Suman Sethi v. Ajay K. Churiwal
- Rahul Builders v. Arihant Fertilizers
- Dashrathbhai Patel v. Hitesh Patel
All of these confirm that: if the notice amount is not identical to the cheque amount, the complaint is invalid.
Final Judgment
- The Supreme Court dismissed the appeal.
- Upheld the Delhi High Court’s decision.
- Held that the legal notice demanding ₹2 Crores instead of ₹1 Crore was invalid in law.
- Therefore, the complaint under Section 138 of the NI Act cannot be maintained.
Key Takeaways
- In cheque bounce cases, the legal notice is the backbone of the case.
- The notice must exactly mention the cheque amount — neither more nor less.
- Even if it is claimed to be a typing mistake, the courts will not allow it.
- Section 138 is a penal provision → it requires strict compliance.
- Lesson: Even small errors in a demand notice can destroy the entire case.
