The Single Statutory Notice: Compliance and the Second Notice in 138 NI Act (Updated 2025)
When a cheque you receive bounces due to insufficient funds, it creates significant financial and legal challenges. In India, Section 138 of the Negotiable Instruments Act, 1881 (NI Act), provides a powerful legal framework to tackle cheque dishonour cases. A critical, yet widely misunderstood, part of this process is issuing the statutory demand notice, which is often mistakenly discussed as the second notice in 138 NI Act.
This comprehensive guide explains the accurate legal process, clarifies the role of the notice, integrates essential updates up to September 2025, and provides practical, India-focused steps for payees and drawers.
What is Second Notice in 138 NI Act of the NI Act?
Section 138 of the NI Act is a key provision in India that criminalises cheque dishonour due to insufficient funds or exceeding arranged credit. It allows the payee (the person who received the cheque) to demand payment from the drawer and pursue criminal legal action if the payment remains unpaid within a stipulated period. Successful prosecution depends entirely on strict adherence to the statutory notice procedure.
Clarifying the Cheque Dishonour Process in India
The law requires the issuance of only one statutory demand notice for each instance of dishonour.
The Correct Legal Procedure
- Cheque Dishonour: Your bank returns the cheque unpaid.
- Statutory Demand Notice (The Single Notice): You, the payee, must send a legal notice demanding payment within 30 days of receiving the bank’s dishonour memo.
- Payment Window: The drawer has 15 days from the date they receive this notice to settle the payment.
- Cause of Action: If the drawer fails to pay the amount within the 15-day period, the cause of action is complete. You must then file the legal complaint.
When the Second Notice in 138 NI Act is Valid
The concept of a “second notice” is only legally relevant when you decide to re-present the cheque, and it bounces again. Since you have the right to present the cheque multiple times within its validity period (now three months), each successive dishonour creates a fresh cause of action and entitles you to issue a fresh statutory demand notice.
- Sicagen India Ltd. vs. Mahindra Vadideni (2023): This Supreme Court ruling reaffirmed that a complaint based on a second statutory notice (after re-presentment) is valid, even if an earlier notice was sent, provided the 30-day timeline is followed for the second dishonour.
- Kamlesh Kumar vs. State of Bihar (2014): This case warns that if you serve one valid notice and the drawer fails to pay, your cause of action arises once. You cannot simply serve a second notice for the same dishonour instance to extend the time limit for filing the complaint.
Legal Requirements for the Demand Notice (2025 Updates)
The statutory notice is the critical step for initiating a legal complaint. Failure to meet the strict legal requirements can lead to the dismissal of your case.
Mandatory Requirement: Exact Amount Only
In a landmark ruling, Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul (September 2025), the Supreme Court of India held that the statutory demand notice must mention the exact amount of the dishonoured cheque. The demand for the “said amount of money” in the notice must be identical to the cheque value; even a typographical error or a slight discrepancy in the amount renders the notice invalid. You can claim additional amounts like interest or legal charges, but you must clearly and separately specify the cheque amount as the core demand.
Other Key Requirements
You must send the notice within 30 days of receiving the dishonour memo. The notice content must clearly include the cheque number, the exact amount, the reason for dishonour, and a clear demand for payment within 15 days, mentioning the serious legal consequences if unpaid. For delivery, use reliable methods like Registered Post with Acknowledgement Due (AD) or courier for strong proof, as the law presumes service when the notice is correctly addressed and dispatched.
Digital Notice Validity in Indian Jurisdictions
Following the 2024 amendment to the NI Act, you can now send the statutory notice via email or other digital means, provided you obtain a digital acknowledgment. This is particularly useful in tech hubs like Bengaluru, Hyderabad, or Pune. Always retain proof of successful delivery and acknowledgment.
Common Challenges and Solutions in India
Payees and drawers face unique, jurisdiction-specific challenges when dealing with the statutory notice procedure across India.
- Delayed Postal Services (Rural areas, Uttar Pradesh, Bihar): Use reliable, trackable courier services or digital notices (if applicable) and prioritise obtaining the proof of dispatch over waiting for the delivery confirmation.
- Disputes over Content (Busy courts like Mumbai, Delhi, Kolkata): Consult a legal professional to draft a precise notice. Remember the strict requirement to demand the exact cheque amount only, to avoid dismissal of the case.
- Jurisdiction (Across India): File the complaint only in the court where the payee’s bank branch (where the cheque was presented) is located, as per Supreme Court mandate. Check the local court’s e-filing portal (ecourts.gov.in) for jurisdiction-specific guidelines.
Steps for Drawers After Receiving the Statutory Notice
If you receive the statutory demand notice, act promptly to avoid severe legal consequences.
- Review the Notice: Verify the cheque details, amount, and dishonour reason immediately. Critically, check if the demanded amount is exactly the amount of the cheque.
- Make Payment: Pay the outstanding amount within 15 days to avoid criminal prosecution.
- Seek Legal Advice: If you dispute the claim, consult a lawyer familiar with local court procedures, such as those in the District Courts of Ahmedabad or Jaipur, to build your defence and prepare to respond.
Ignoring the notice will lead to severe penalties, including imprisonment for up to two years or a fine up to twice the cheque amount.
Conclusion
The second notice in Section 138 of the NI Act is a critical step in resolving cheque dishonour cases in India. Payees must adhere to timelines, ensure proper delivery, and draft clear notices to strengthen their case. Drawers should act swiftly to settle dues and avoid legal repercussions. For professional legal assistance, explore services on IndiaFilings or consult a local lawyer to navigate jurisdiction-specific rules.
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