M.S. Narayana Menon v. State of Kerala (S.138 Notice)

Supreme Court of India(2006) 6 SCC 39

Bench: J. S.B. Sinha, J. Dalveer Bhandari

The Supreme Court held that for the notice under Section 138(b) NI Act to be legally effective, it must: (i) be in writing; (ii) be sent to the drawer (the accused); (iii) specifically demand payment of the amount of the cheque; (iv) be sent within 30 days from receipt of information from the bank about the dishonour. A general notice to "settle the dues" without specifying the cheque amount or demanding its payment does not fulfill the statutory requirements. The notice is a mandatory ingredient of the offence under Section 138 — without a proper notice, the essential element is absent and the prosecution under Section 138 must fail. The Court held that the purpose of the notice is to give the drawer a final opportunity to pay and avoid criminal prosecution — this purpose cannot be served by a vague notice.