{"id":214465,"date":"2019-05-08T20:30:37","date_gmt":"2019-05-08T15:00:37","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=214465"},"modified":"2019-05-09T14:18:12","modified_gmt":"2019-05-09T08:48:12","slug":"tri-hc-purpose-of-demand-notice-under-s-138-ni-act-not-to-demand-payment-but-to-inform-the-party-of-broken-contract-and-liability-to-pay","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2019\/05\/08\/tri-hc-purpose-of-demand-notice-under-s-138-ni-act-not-to-demand-payment-but-to-inform-the-party-of-broken-contract-and-liability-to-pay\/","title":{"rendered":"Tri HC | Purpose of demand notice under S. 138 NI Act \u2013 not to demand payment, but to inform the party of broken contract and liability to pay"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Tripura High Court:<\/strong> The Bench of Arindam Lodh, J. allowed a revision petition under Section 397 read with Section 401 of Code of Criminal Procedure, 1973 and set aside the lower courts\u2019 order acquitting the accused in a case filed under Section 138 of the Negotiable Instruments Act, 1881.<\/p>\n<p style=\"text-align: justify;\">Petitioner herein (complainant before lower court) gave a loan of Rs 3.6 lakhs to the accused in three installments against which the respondent issued three post-dated cheques. When the petitioner tried to encash these cheques, they were dishonoured with the remark \u2018insufficient funds\u2019 in the account of the respondent. The petitioner served a statutory demand notice upon the respondent which went unresponded. Thereafter, he filed a complaint in the Trial Court charging the accused for dishonour of cheque. The Trial Court dismissed the case holding that the demand notice was invalid as it did not bear the signatures of petitioner\u2019s Advocate.\u00a0 Respondent\u2019s acquittal was affirmed and upheld by the learned Sessions Judge. Aggrieved thereby, the instant revision petition was filed.<\/p>\n<p style=\"text-align: justify;\">The Court opined that the decisions arrived at by the lower courts were perverse and unwarranted on both the points of facts and law, hence not sustainable. It was held that Section 138 proviso (b) does not stipulate that the notice is to be sent through an advocate. Further, each page of the demand notice had been signed by the complainant himself, and thus it was a valid notice in terms of Section 94 of the NI Act. It was observed that the object of notice of dishonor of cheque to endorser is not to demand payment, but to indicate to the party notified that his contract arising on the negotiable instrument has been broken and he is liable for payment.<\/p>\n<p style=\"text-align: justify;\">Reliance was placed on<em> Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd.<\/em>, <a href=\"http:\/\/scconline.com\/DocumentLink\/56V2ga53\">2016 SCC Online SC 954<\/a>, where it was held that a post-dated cheque issued as security towards payment of installments of a loan transaction falls within the purview of Section 138 NI Act. In view thereof, it was held that the respondent was liable under Section 138 of NI Act, and he was ordered to pay a fine of Rs 3,60,000 to the petitioner as compensation, failing which, he would be sentenced to simple imprisonment of six months.[Subal Chandra Ghosh v. State of Tripura, <a href=\"http:\/\/scconline.com\/DocumentLink\/DBYlNNm9\"><b>2019 SCC OnLine Tri 134<\/b><\/a>, decided on 25-04-2019]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tripura High Court: The Bench of Arindam Lodh, J. allowed a revision petition under Section 397 read with Section 401 of Code <\/p>\n","protected":false},"author":8808,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[35294,31402,2862,3301,34538],"class_list":["post-214465","post","type-post","status-publish","format-standard","hentry","category-casebriefs","category-highcourts","tag-broken-contract","tag-demand-notice","tag-dishonour_of_cheque","tag-liability","tag-section-138-negotiable-instruments-act"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.4 (Yoast SEO v26.4) - 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The instant revision petition was filed against the order passed dismissing the\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":261058,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/02\/03\/whether-proceedings-under-ss-138-and-141-of-ni-act-can-be-initiated-against-corporate-debtor-during-moratorium-period\/","url_meta":{"origin":214465,"position":1},"title":"Whether proceedings under Ss. 138 and 141 of NI Act can be initiated against corporate debtor during moratorium period? Madras HC answers","author":"Bhumika Indulia","date":"February 3, 2022","format":false,"excerpt":"Madras High Court: N. Sathish Kumar, J., while addressing a matter with regard to the dishonour of cheques under Section 138 of Negotiable Instruments Act, 1881, held that the moratorium provision contained in Section 14 of the Insolvency and Bankruptcy Code, would apply only to corporate debtor, but the natural\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/01\/Madras_New-logo.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/01\/Madras_New-logo.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/01\/Madras_New-logo.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/01\/Madras_New-logo.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/01\/Madras_New-logo.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":364043,"url":"https:\/\/www.scconline.com\/blog\/post\/2025\/10\/16\/rajasthan-hc-section-138-ni-act-on-cheque-for-time-barred-debt-revives-enforceability-under-contract-act\/","url_meta":{"origin":214465,"position":2},"title":"Cheque for Time-Barred Debt Revives Enforceability Under S. 25(3) Contract Act; Dishonour attracts Section 138 NI Act: Rajasthan High Court","author":"Editor","date":"October 16, 2025","format":false,"excerpt":"\u201cA meaningful reading of Sections 20, 118 and 139 of the NI Act makes it clear that a person who signs a cheque and delivers it to the payee remains liable unless he successfully rebuts the statutory presumptions.\u201d","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Section 138 NI Act on Cheque for Time-Barred Debt","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Section-138-NI-Act-on-Cheque-for-Time-Barred-Debt.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Section-138-NI-Act-on-Cheque-for-Time-Barred-Debt.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Section-138-NI-Act-on-Cheque-for-Time-Barred-Debt.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Section-138-NI-Act-on-Cheque-for-Time-Barred-Debt.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":239537,"url":"https:\/\/www.scconline.com\/blog\/post\/2020\/11\/23\/tri-hc-what-is-the-purpose-of-a-serving-a-statutory-notice-under-negotiable-instruments-act-detailed-analysis-of-significance-of-statutory-presumption\/","url_meta":{"origin":214465,"position":3},"title":"Tri HC | What is the purpose of a serving a &#8216;Statutory Notice&#8217; under Negotiable Instruments Act? Detailed analysis of significance of &#8216;Statutory Presumption&#8217;","author":"Bhumika Indulia","date":"November 23, 2020","format":false,"excerpt":"Tripura High Court:\u00a0S.G. Chattopadhyay, J., highlights the essence of the provisions of Negotiable Instruments Act, in light of the object of a statutory notice. It has been stated that the Courts below have concurrently held that the respondent has already established his case under the provisions of Section 138 of\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":302661,"url":"https:\/\/www.scconline.com\/blog\/post\/2023\/09\/29\/prima-facie-evidence-undated-cheque-security-in-dishonor-of-cheque-case-calcutta-hc-scc-blog\/","url_meta":{"origin":214465,"position":4},"title":"&#8216;Need to interpret Section 138 in a manner that preserves the law\u2019s efficacy&#8217;: Calcutta High Court sets aside conviction","author":"Ritu","date":"September 29, 2023","format":false,"excerpt":"In the instant matter of cheque bounce, on the date of presentation of the cheque, the company which allegedly issued the cheque was no more existence.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"calcutta high court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/calcutta-high-court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":266804,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/05\/13\/law-on-liability-of-guarantor-dishonour-of-cheque-section-138-ni-act\/","url_meta":{"origin":214465,"position":5},"title":"Liability of Guarantor for Cheque Dishonour: Can lender enforce his right against either principal borrower or his guarantor? 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