Section 138: Demand Notice, Deemed Service and Cause of Action

The demand notice is the hinge of the Section 138 offence. It gives the drawer one last chance to pay and avoid prosecution, and his failure to pay after receiving it completes the offence. Because so much turns on it, the notice has generated a large body of case law on its timing, contents and service. This note sets out the statutory requirements and the leading decisions, including the Supreme Court's 2025 and 2026 rulings.

1. The Statutory Requirements

Who gives it: the payee or the holder in due course, personally or through an advocate or agent.
Form: a demand in writing for payment of the cheque amount (proviso (b)). No particular form is prescribed.
Time: within 30 days of receiving information from the bank about the dishonour, usually the return memo.
Mode: any mode, such as registered post, speed post, courier or hand delivery. Several High Courts have accepted notices sent by email or WhatsApp, provided delivery is proved.
Payment period: the drawer has 15 days from receipt of the notice to pay (proviso (c)).

2. Contents of the Notice

Must demand the cheque amount: the notice must call on the drawer to pay the amount of the cheque. A notice that demands only some other sum, or an omnibus amount without identifying the cheque amount, is invalid (Rahul Builders v. Arihant Fertilizers and Chemicals, 2008).
Additional claims: a notice may also claim interest, costs or other amounts, if the cheque amount is separately and clearly demanded, so that the drawer can pay it (Suman Sethi v. Ajay K. Churiwal, 2000).
Exact amount: the cheque amount stated in the notice must be correct. A notice stating a different figure, even by a typographical error, does not satisfy the proviso, and the complaint fails (Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul, Supreme Court, 2025).
Particulars: good practice is to identify the cheque number, date, amount, bank, the date and reason of dishonour, and to demand payment within 15 days.

3. Service and Deemed Service

📖 K. Bhaskaran v. Sankaran Vaidhyan Balan (Supreme Court, 1999)

Held: The proviso requires the payee to give notice, and the drawer's 15 days run from receipt. Where a notice is sent by registered post to the correct address, service is presumed under Section 27 of the General Clauses Act, even if it is returned unclaimed or refused, unless the drawer proves that he had no knowledge of it. A drawer cannot defeat the section by evading the notice.

📖 C.C. Alavi Haji v. Palapetty Muhammed (Supreme Court, three judges, 2007)

Held: The complainant need not specifically plead in the complaint that the notice was served. A drawer who claims he did not receive the notice may, within 15 days of receiving the court's summons, pay the cheque amount and have the complaint dismissed. A person who does not do so cannot complain of non-receipt, because the summons gives him the same opportunity the notice would have given.

📖 Sainaba v. State of Kerala (Supreme Court, 30 September 2026)

Held: A demand notice sent by registered post to the drawer's correct address is validly served even if it was received by a family member rather than the drawer. The requirement of "giving" notice is complied with once it is dispatched to the correct address; the burden then shifts to the drawer to rebut the presumption.

4. Cause of Action and the Complaint

When the offence is complete: on the drawer's failure to pay within 15 days of receipt of the notice. The cause of action arises on the day after the 15 days expire.
Premature complaints: a complaint filed before the 15 days expire is not maintainable, though a fresh complaint may be filed in time (Yogendra Pratap Singh v. Savitri Pandey, three judges, 2014).
Limitation for complaint: within one month of the cause of action, with power to condone delay for sufficient cause (Section 142(1)(b); Topic 47).
One cause of action per cheque: successive presentations and notices are allowed (MSR Leathers, 2013), and each dishonoured cheque gives its own cause of action (Sumit Bansal, 2026).

⚠ Note

The Section 138 demand notice is distinct from the civil notice of dishonour under Section 93. The civil notice preserves the holder's rights against drawer and indorsers; the Section 138 notice is a condition of criminal liability and must demand payment (Topic 30).

⚠ Key point

The payee or holder in due course must give a written demand for the cheque amount within 30 days of the bank's information of dishonour; the drawer has 15 days from receipt to pay. The notice must clearly demand the correct cheque amount (Rahul Builders; Kaveri Plastics, 2025), though other claims may be added if severable (Suman Sethi). Service by post to the correct address is presumed, including where refused, unclaimed (K. Bhaskaran) or received by a family member (Sainaba, 2026); and a drawer who does not pay within 15 days of summons cannot plead non-receipt (C.C. Alavi Haji). The cause of action arises on expiry of the 15 days; earlier complaints are premature (Yogendra Pratap Singh).

5. Related Topics and Provisions

Notice of dishonour (Topic 30)
Ingredients of the offence (Topic 42)
Cognizance and limitation (Topic 47)