Mismatch Between Cheque and Demand Notice Is Fatal — Even Typo Renders Section 138 Notice Invalid: Supreme Court

“Even typographical error can be no defence... The error, even if typographical, would be fatal to the legality of notice” – On 19th September 2025, the Supreme Court of India delivered a landmark ruling in which firmly holding that a demand notice under Section 138(b) of the Negotiable Instruments Act, 1881, must exactly replicate the cheque amount, and any variance—even due to typographical error—renders the notice invalid, thus nullifying the entire criminal prosecution.

The Court held that the “'said amount' under proviso (b) of Section 138 refers strictly to the cheque amount,” and “when a different amount is mentioned in the notice, the statutory condition is not fulfilled.” This decision reaffirms the position that compliance with Section 138 must be literal, not liberal, and underscores that penal provisions are to be interpreted strictly.

Supreme Court Slams Technical Lapse in Demand Notice: "Wrong Amount in Notice Defeats the Complaint Entirely"

In the case before the apex court, Kaveri Plastics, the complainant, alleged that M/s Nafto Gaz India Pvt. Ltd., represented by the respondent, had issued a cheque dated 12.05.2012 for ₹1,00,00,000/-, which was dishonoured on the ground of "funds insufficient". However, the statutory notice under Section 138(b) sent to the accused demanded payment of ₹2,00,00,000/-, exactly double the cheque amount.

Despite the correct cheque number and bank details being mentioned in the notice, the amount mismatch became fatal. The complainant explained the mistake as a typographical error resulting from a copy-paste lapse, but the Supreme Court refused to condone it.

The Court observed,
“The cheque which was drawn by the respondent was for Rs.1,00,00,000/- whereas in the notice issued under Proviso (b) to Section 138 of the NI Act against the respondent, appellant mentions the amount of Rs.2,00,00,000/-... The rigours of law on this score being strict, the defence would not hold good that the different amount mentioned in the notice was out of inadvertence.”

No Room for Flexibility in Penal Law: "Said Amount" Must Be Exact Cheque Amount, Not More, Not Less

The Court categorically held that Section 138(b) creates a technical penal offence, and therefore, strict compliance is mandatory. Referring to a long line of precedents including Suman Sethi v. Ajay K. Churiwal, K.R. Indira v. G. Adinarayana, Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel, and others, the Court emphasized the legislative intent:

“The words ‘said amount’ and the phrase ‘any amount of money’ have the same purport signifying the cheque amount... They operate hand-in-hand for the purpose of applicability of the Section.”

Rejecting the typographical error argument, the Court said:
“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.”

It further noted:
“Here the principle of reading of notice as a whole is inapplicable and irrelevant. Any elasticity cannot be adopted in the interpretation. It has to be given technical interpretation.”

The Law Must Be Followed, Not Implied: Typo is Not a Technicality But a Fatal Flaw

The judgment reinforced that penal statutes cannot be saved by equity, intent, or assumption, quoting classic principles from Dyke v. Elliott and M. Narayanan Nambiar v. State of Kerala, stating:

“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...”

“In a criminal statute you must be quite sure that the offence charged is within the letter of the law.”

The Court therefore held that Section 138 proceedings cannot be saved by arguing typographical lapses, even if inadvertent.

Demand in the Notice Must Be for the Cheque Amount Alone — Nothing Else Matters If That Fails

The Supreme Court concluded that the notice issued was legally defective, and therefore, the entire complaint under Section 138 stood vitiated. It explained that statutory notices demanding incorrect amounts fall short of the mandatory requirement, and even if additional amounts like interest or legal costs are claimed, the cheque amount must be accurately and explicitly demanded.

The Court ruled:
“In order to make a valid notice under the Proviso (b) to Section 138 of the NI Act, it is mandatory that ‘said amount’ to be mentioned therein is the very amount of cheque, and none other.”

“A failure in this regard… such notice would stand invalid in eye of law. Even typographical error can be no defence.”

No Valid Notice, No Prosecution

The Supreme Court dismissed the appeal, upholding the Delhi High Court's judgment that had quashed the complaint on grounds of non-compliance with Section 138(b).

Summing up, the Court declared:
“When the provision is penal and the offence is technical, there is no escape from holding that the ‘said amount’ in proviso (b) cannot be the amount other than mentioned in the cheque.”

Thus, the Supreme Court decisively held that even inadvertent errors in statutory notices can be fatal to prosecution under Section 138 NI Act, sending a strong message to all complainants to exercise meticulous legal precision.

Date of Decision: 19th September 2025