Summary and Analysis of Kaveri Plastics vs Mahdoom Bawa Bahurudeen Noorul 2025 INSC 1133
1. Heading of the Judgment
Kaveri Plastics vs. Mahdoom Bawa Bahurudeen Noorul
Citation: 2025 INSC 1133
Criminal Appeal Nos.: Arising out of SLP (Crl.) Nos. 11184-11185 of 2024
Date of Judgment: September 19, 2025
Coram: Chief Justice B.R. Gavai and Justice N.V. Anjaria
2. Related Laws and Sections
The judgment exclusively interprets and applies the following provision:
Section 138 of the Negotiable Instruments Act, 1881 (NI Act): This section criminalizes the dishonor of a cheque due to insufficient funds. The case specifically focuses on the mandatory conditions laid down in the proviso to this section, particularly:
Proviso (b): Requires the payee to make a demand for the payment of the "said amount of money" by giving a written notice to the drawer of the cheque within 30 days of receiving the dishonor information from the bank.
3. Basic Details of the Case
Appellant (Complainant): Kaveri Plastics
Respondent (Accused): Mahdoom Bawa Bahurudeen Noorul (Director of the company that issued the cheque)
Core Fact: The appellant received a cheque for Rs. 1,00,00,000 (One Crore) from the respondent's company. The cheque was dishonored due to "insufficient funds".
The Fatal Error: The appellant's lawyer sent a legal notice under Section 138(b) of the NI Act. However, in the notice, the amount demanded was Rs. 2,00,00,000 (Two Crores)—double the actual cheque amount. A second notice was sent later repeating the same error.
Defence: The appellant claimed this was a "typographical error" caused by a "copy-paste mistake" from notices prepared for other cheques.
Procedural History:
Trial Court (Metropolitan Magistrate): Dismissed the respondent's application for discharge.
High Court of Delhi: Quashed the criminal complaint, holding that a notice demanding an amount different from the cheque amount is invalid in law.
Supreme Court: The appellant (complainant) appealed to the Supreme Court against the High Court's order.
4. Explanation of the Judgment with Supreme Court's Analysis & Directions
The Supreme Court dismissed the appeal and upheld the High Court's decision to quash the complaint. The Court's reasoning is a masterclass in the strict interpretation of penal statutes.
The Core Legal Principle: Strict Compliance is Mandatory
The Court began its analysis by reaffirming a fundamental legal principle: penal statutes must be construed strictly. This means that for an act to be considered a crime, it must fall squarely within the plain and unambiguous language of the law. Courts cannot stretch the meaning of words to cover a situation, even if it seems like a mere oversight or a "casus omissus" (a case omitted from the statute).
The Importance of the Notice under Section 138(b)
The Court emphasized that the notice under Proviso (b) to Section 138 is not a mere formality; it is a mandatory and imperative condition that must be fulfilled before an offence can be said to have been committed. The purpose of this notice is twofold:
To give the drawer a chance to rectify their omission: It provides a final opportunity to the person who issued the cheque to pay the amount and avoid criminal prosecution.
To protect an honest drawer: It ensures that the drawer is clearly informed of the exact default for which they are being held liable.
Interpretation of "Said Amount of Money"
The entire case hinged on the interpretation of the phrase "said amount of money" used in Proviso (b). The Court, relying on its landmark precedent in Suman Sethi vs. Ajay K. Churiwal & Anr. (2000) 2 SCC 380, held that this phrase unequivocally refers back to the "amount of money" mentioned in the main body of Section 138, which is the amount for which the cheque was drawn.
Therefore, the demand in the notice must be for the cheque amount and nothing else. The Court clarified that if a notice demands the correct cheque amount and also separately claims additional sums like interest or legal costs, those additional claims are "superfluous and severable" and do not invalidate the notice.
However, if the notice demands an amount that is different from the cheque amount—whether higher or lower—it fails to meet this statutory requirement.
Application to the Present Case and Rejection of the "Typographical Error" Defence
The Court applied this strict interpretation to the facts:
The cheque was for Rs. 1 Crore.
The notice demanded Rs. 2 Crores.
This was a clear and fatal discrepancy.
The Court categorically rejected the appellant's "typographical error" defence for several reasons:
Strict Liability: The condition of a valid notice is a strict liability requirement in a penal statute. There is no room for inferential or implied compliance. The notice must be precise.
The Error was Repeated: The mistake was not a one-off; it was repeated in two separate legal notices sent on different dates (08.06.2012 and 14.09.2012).
Creates Ambiguity: A demand for a different amount creates ambiguity. It fails to clearly inform the drawer of the specific liability they are required to discharge to avoid prosecution. The drawer cannot be expected to guess the correct amount.
Principle of Reading the Notice as a Whole is Inapplicable: The appellant argued that since the cheque number and other details were correctly mentioned, the notice should be read as a whole to understand the intent. The Supreme Court held that this principle is irrelevant when the core statutory requirement—the demand for the "said amount"—is not met.
Conclusion and Supreme Court's Direction
The Supreme Court concluded that the notice issued by the appellant was invalid and bad in law. Since a valid notice is a prerequisite for initiating prosecution under Section 138 of the NI Act, the entire complaint was not maintainable.
The appeal was dismissed, and the order of the Delhi High Court quashing the criminal complaint was upheld. The Court affirmed that for a notice under Section 138(b) to be valid, it must demand the exact amount of the dishonoured cheque, and no defence of typographical error can cure a failure to comply with this mandatory requirement.