Supreme Court Overturns High Court Order on Cheque Dishonour Case

The Supreme Court in Kaveri Plastics v. Mahdoom Bawa Bahruden Noorul (SC-927, 2025) held that a complaint under Section 138 of the Negotiable Instruments Act is not maintainable if the demand notice served does not precisely state the amount payable under the dishonoured cheque. The Court clarified that typographical or clerical errors in the notice (for example, mentioning an incorrect amount due to a typo) could render the demand notice invalid. As the demand notice is a statutory pre-condition for initiating a Section 138 complaint, lack of strict compliance affects maintainability. The judgment underscores that statutory requirements under the NI Act must be followed with precision; minor mistakes in the notice cannot be glossed over. In effect, the Court quashed the complaint where the demand notice failed to accurately reflect the cheque’s amount, reinforcing the rigor required in legal notices under the NI Act.