K.R. INDIRA versus DR. G. ADINARAYANA

Citation: [2003] SUPP. 4 S.C.R. 535 · Decided: 09-10-2003 · Supreme Court of India · Bench: DORAISWAMY RAJU · Disposal: Dismissed

Judgment (excerpt)

K.R. INDIRA 
A 
v. 
DR. G. ADINARA Y ANA 
OCTOBER 9, 2003 
[DORAISWAMY RAJU AND ARIJIT PASAYAT, JJ.] 
B 
Negotiable Instruments Act, I 88 I: 
Section I 38 Proviso (b)-Appel/ants husband and wife advancing 
loans to respondent-Respondent issuing two cheques each in the name C 
of husband and wife-Bouncing of-Common notice of demand-Notice 
not specifically containing any demand for payment of cheque amount-
Held, the notice is imperfect-Demand in the notice has to be in relation 
to amount covered by the bounced cheque which is conspicuously absent 
in the notice issued-However, any further or additional claims found to D 
have been made does not invalidate a notice. 
Section 138-Clause (b) of proviso-Consolidated notice~Validity 
of-Held, if the consolidated notice is found to provide sufficient information 
envisaged by the statutory provision and there is a specific demand for the 
payments of the sum covered by the cheque dishonoured, mere fact that E 
it is a consolidated notice may not invalidate the same. 
Section 138-0.ffence under-Components of, elucidated. 
Appellants being husband and wife, advanced loans '.o respondent F 
for which he executed pronotes with a view to ensure repayment of 
loans with interest. Subsequently, four cheques were issued by the 
respondent, two in the name of the husband and two in the name of 
the wife. The cheques bounced when presented for collection with an 
endorsement 'not arranged for'. Thereupon one common notice of 
demand was sent by both the appellants calling upon the accused- G 
respondent to pay the cheque amounts within 15 days from the receipt 
of notices. Though the accused-respondent received the notices, he did 
not choose to respond. After waiting for the stipulated period of 15 
days, three separate complaints were filed by the appellants. Trial 
Court dismissed the complaints holding that tbe appellants failed to H 
535 
536 
SUPREME COURT REPORTS [2003] SUPP. 4 S.C.R. 
A prove that the cheques were issued by way of repayment of the loans 
advanced by the appellants. Appeals were filed before High Court 
which were disposed of by a common judgment acquitting the 
respondent on the ground that the notices sent did not meet the 
requirement of proviso to Clause (b) of Section 138 of the Negotiable 
B Instruments Act, 1881. Hence the present appeals. 
c 
On behalf of the appellants, it was contended.that the essence of 
the notice was to be seen and a bare reading of the notice, even though 
consolidated, showed that the requirements of Clause (b) of proviso to 
Section 138 of the Act were met; that the substance and not form 
should have primacy and if sufficient compliance was there, question 
of deficiency did not arise. 
Dismissing the appeals, the Court 
D 
HELD : 1.1. A perusal of the contents of the notice in question 
shows that not only the cheque amounts were different from the alleged 
loan amounts but the demand was made not of the cheque amounts but 
only the loan amount as though it is a demand for the loan amount and 
not the demand for payment of the cheque amount; nor could it be said 
E that it was demand for payment of the cheque amount and in addition 
thereto made further demands as well. What is necessary is making of a 
demand for the amount covered by the bounced cheque which is 
conspicuously absent in the notice issued in this case. The notice is 
imperfect in this case not because it had any further or additional claims 
F as well but it did not specifically contain any demand or the payment of 
the cheque amount, the non-compliance with such a demand only being 
the incriminating circumstance which expose the drawer for being 
proceeded against under Section 138 of the Act. [542-E•G) 
Central Bank of India and Anr. v. Saxons Farms and Ors., (1999] 
G 8 sec 221, referred to. 
1.2. Though no formal notice is prescribed in the provision, the 
statutory provisfon indicates in unmistakabte terms as to what should 
be clearly indicated in the notice and what manner of demand it should 
H make. In a given case if the consolidated notice is found to provide 
K.R. INDIRA v. DR. G. ADINARA Y ANA 
537 
sufficient information envisaged by the statutory provision and there A 
was a specific demand for the payment of the sum covered by the 
cheque dishonoured, mere fact that it was a consolidated notice, and/ 
or that further demands in addition to the statutorily envisaged 
demand was also found to have been made may not invalidate the 
same. [542

Excerpt shown. Read the full judgment & AI analysis in Lexace.