Supreme Court clarifies scope of Section 138 Negotiable Instruments Act, 1881 for multiple cheques

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Published 26 October 2026

Case: N. Arasappa Versus State of Karnataka & Ors.
Court: Supreme Court of India
Citation: 2026 LiveLaw (SC) 1086
Statutes: Negotiable Instruments Act, 1881 — s.138
Source: LiveLaw

Bottom Line Up Front (BLUF)

In N. Arasappa Versus State of Karnataka & Ors., 2026 LiveLaw (SC) 1086, the Supreme Court clarified that a single notice of demand under Section 138 of the Negotiable Instruments Act, 1881, is valid for multiple dishonoured cheques if they arise from the same transaction and are presented within the statutory period.

Ratio Decidendi · Legal Principle Established

A single notice of demand under Section 138 of the Negotiable Instruments Act, 1881, is legally sufficient for multiple dishonoured cheques, provided all cheques relate to the same transaction and are presented for payment within the stipulated period.

Practice & Procedural Impact for Advocates

Advocates can issue a single demand notice for multiple cheques dishonoured from the same transaction, streamlining the process. Litigants should ensure all such cheques are presented within the statutory period to avoid procedural challenges.

Key Legal Takeaways

1A single demand notice is permissible for multiple dishonoured cheques.
2The multiple cheques must originate from the same transaction.
3All cheques must be presented for payment within the statutory period for the single notice to be valid.

The Legal Issue The Supreme Court addressed the question of whether a single notice of demand under Section 138 of the Negotiable Instruments Act, 1881, is valid when multiple cheques issued by the same drawer are dishonoured. This issue frequently arises in cases where a single debt or liability is discharged through several cheques, leading to confusion regarding the procedural requirements for initiating criminal proceedings.

Court's Reasoning The Supreme Court held that a single notice of demand is indeed valid for multiple dishonoured cheques, provided two conditions are met. Firstly, all the dishonoured cheques must arise from the same transaction. This ensures that the underlying liability is singular, even if fragmented into multiple instruments. Secondly, all such cheques must have been presented for payment within the statutory period prescribed by the Negotiable Instruments Act, 1881. The Court reasoned that the purpose of the demand notice is to give the drawer an opportunity to make payment, and consolidating demands for related instruments does not prejudice the drawer's rights.

What Follows This clarification by the Supreme Court will simplify the process for complainants seeking to initiate proceedings under Section 138 of the Negotiable Instruments Act, 1881, when dealing with multiple dishonoured cheques from a single transaction. Complainants may now issue a single demand notice covering all such cheques, reducing the procedural burden. However, strict adherence to the condition that all cheques must relate to the same transaction and be presented within the statutory period is essential for the validity of such a notice.