No Embargo On Issuing Single Statutory Notice Under Section 138 NI Act For Multiple Dishonoured Cheques: Orissa High Court

"There is no embargo in law for issuing one notice for two cheques which have been dishonoured and... the amount claimed is the amount for which the cheque(s) have been issued." Orissa High Court, in a significant ruling, held that issuing a single, consolidated demand notice for the dishonour of multiple cheques is legally permissible under Section 138 of the Negotiable Instruments Act (N.I. Act).

A bench of Justice V. Narasingh observed that such a notice remains perfectly valid as long as the total amount demanded accurately reflects the cumulative value of the dishonoured cheques in question.

The dispute arose when the complainant paid Rs 20 lakhs as part consideration to purchase a duplex house from the accused company. Upon failing to deliver the property, the company's Managing Director executed an agreement and issued two cheques amounting to Rs 2,60,000 and Rs 19,40,000 towards a refund. After both cheques were dishonoured for insufficient funds, the complainant issued a single legal notice demanding the combined sum of Rs 22,00,000, which subsequently led to a criminal conviction and an order to pay Rs 25 lakhs in compensation. The accused filed a revision petition challenging the validity of this consolidated notice.

The primary question before the court was whether a single demand notice issued for multiple dishonoured cheques violated the strict procedural requirements of proviso (b) to Section 138 of the N.I. Act. The court was also called upon to determine whether a fundamental legal objection regarding the validity of such a statutory notice could be raised for the very first time in a revisional proceeding under Section 442 of the BNSS.

New Legal Pleas Permissible In Revision

The court first addressed the complainant's preliminary objection that the validity of the notice was never challenged before the trial or appellate courts. Rejecting this technical bar, Justice Narasingh permitted the accused to raise the ground for the first time. The judge categorically observed that the doors of the court in exercising revisional jurisdiction ought not to be shut when violations of basic statutory ingredients are alleged.

Clients Must Not Suffer For Counsel's Inaction

Relying on the Supreme Court's precedent in Rafiq v. Munshilal, the bench emphasised that a litigant places implicit trust in their legal counsel. The court noted that a party cannot be made to suffer merely because a crucial legal ground was not urged earlier. The bench reiterated that an innocent party must not suffer injustice solely due to the deliberate omission or default of their chosen advocate.

Demand Must Match Cheque Amount

Delving into the core issue, the court examined the strict compliance required under proviso (b) to Section 138 of the N.I. Act. The petitioner, relying on the Supreme Court's judgment in Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul, argued that the notice was defective. The defense contended that the statutory notice demanded a consolidated sum of Rs 22 lakhs rather than stating the exact individual amounts of the specific bounced cheques.

Consolidated Notice Legally Valid

The High Court rejected the petitioner's interpretation, pointing out that the demand notice clearly detailed both bounced cheques and demanded their exact combined total. Distinguishing the precedents cited by the defense, including the Kerala High Court's decision in A.C. Raj v. M. Rajan, the bench noted that those cases involved demands that were arbitrarily higher than the cheque amounts. Here, the demanded sum perfectly mirrored the combined value of the two cheques.

Single Notice For Multiple Cheques Permitted

The court categorically ruled that aggregating the amounts of multiple dishonoured cheques into a single statutory notice does not render it invalid. The bench aligned its view with the jurisprudence of other High Courts, specifically citing the Jammu and Kashmir High Court's ruling in Fayaz Ahmad Rather v. Tariq Ahmad Wani. It affirmed that a consolidated notice of demand is well within the established legal framework.

"On a bare perusal of the notice issued in the case at hand... the same does not suffer from any infirmity and there is no embargo in law for issuing one notice for two cheques which have been dishonoured."

Corporate And Individual Liability Upheld

The court also evaluated the impleadment of the parties, observing that the original complaint was rightly filed against the company as well as its Managing Director. The bench found no infraction in the trial court's approach to fixing individual liability on the Managing Director. It noted that the liability fixed on the accused in his individual capacity had not been successfully assailed and had attained finality.

The High Court concluded that the lower courts' appreciation of the evidence did not suffer from any patent perversity requiring interference. Consequently, the criminal revision was rejected, and the order sentencing the petitioner to six months of simple imprisonment along with Rs 25 lakhs in compensation was upheld.

Date of Decision: 22 July 2026