In a recent ruling by the Supreme Court in the case of *UPASANA MISHRA v. TREK TECHNOLOGY INDIA PVT. LTD.*, the Court invalidated a demand notice issued under Section 138 of the Negotiable Instruments Act, 1881, for being omnibus in nature. The appellant-notice holder had approached the Delhi High Court seeking the quashing of the summoning order passed by the Magistrate, arguing that the notice failed to specify the amount due under the dishonoured cheque, as mandated by the precedent set in the case of Suman Sethi vs. Ajay K. Churiwal and Anr.
The Delhi High Court, however, dismissed the petition, emphasizing that while the notice did not explicitly ask for the total amount due, it separately demanded the amount of the cheque, compensation for its value, and an additional sum of Rs.50,000 for mental harassment. The High Court found these demands to be severable and concluded that they did not invalidate the notice.
The appellant, unsatisfied with the High Court’s decision, appealed to the Supreme Court. The Supreme Court bench, comprising Justices CT Ravikumar and PV Sanjay Kumar, referenced the Suman Sethi case and reiterated that while demanding an amount in addition to the cheque amount doesn’t inherently invalidate the notice, a clear demand for the ‘cheque amount’ is essential. However, it clarified that if the notice distinctly specifies separate claims, such as the cheque amount, interest, damages, etc., these additional claims can be severable and would not render the notice invalid.
Upon scrutinizing the demand notice in question, the Supreme Court found that an omnibus demand for Rs.6,50,000 was made alongside demands for interest, damages, and notice charges. Notably, the demanded sum of Rs.6,50,000 was not the cheque amount, leading the Court to conclude that the notice was invalid as per the principles established in the Suman Sethi case.
Consequently, the Supreme Court allowed the criminal appeal filed by the appellant, setting aside the summoning order passed by the Metropolitan Magistrate, Negotiable Instruments Act, Saket Court, New Delhi.
The ruling reaffirms that demands in a notice under the Negotiable Instruments Act must specifically include the ‘cheque amount,’ and any additional claims should be clearly distinct from it. The failure to make a clear demand for the cheque amount renders the notice invalid.
This judgment by the Supreme Court acts as a pivotal clarification on the legal requirements for demand notices under the Negotiable Instruments Act, setting a precedent for future cases involving dishonoured cheques. The Court’s emphasis on the necessity of clarity and specificity in demanding the cheque amount upholds the sanctity of legal notices under the Act.
In essence, the decision reiterates the importance of precision and adherence to legal requirements in demand notices concerning dishonoured cheques. It underlines the significance of clearly delineating additional claims from the cheque amount to ensure the validity of such notices.
The ruling by the Supreme Court in the *UPASANA MISHRA v. TREK TECHNOLOGY INDIA PVT. LTD.* case serves as a crucial guideline for practitioners and stakeholders dealing with matters related to dishonoured cheques under the Negotiable Instruments Act, thereby contributing to greater clarity and adherence to legal standards in such cases.