A demand notice is the letter, usually from an advocate, that sets out what is owed, the basis of the claim, and a date by which it must be paid, sent before a recovery suit is filed. It is not a formality to get out of the way. A good many debts are paid at this stage, once a claim is put in writing with a firm date attached to it, and a suit turns out not to be needed.
The notice does two things a suit will later rely on. It fixes what was actually claimed, the sum, and the transaction it arises from, and records that the debtor was asked and did not pay, which becomes part of the evidence if the matter is disputed later. It also interacts with time itself: a recovery suit must generally be filed within three years of the debt falling due, under the Limitation Act, 1963, and a written acknowledgement of the debt made within that period can start the three years running afresh. A notice, and any reply to it, is often the clearest record of when that happened.
A notice that works says exactly what is owed and why: the principal, any interest claimed and how it is worked out, the invoice, loan or cheque the claim arises from, and a firm date for payment. A notice that only asks for “the outstanding amount” invites an argument later about what was actually claimed, and when. Where the claim is on a written instrument or an admitted account, a faster summary suit may be available under Order XXXVII of the Code of Civil Procedure, 1908, in which the debtor must obtain the court’s leave before being allowed to defend at all.
A dishonoured cheque is a narrower case with its own strict clock, separate from an ordinary civil notice. Under Section 138 of the Negotiable Instruments Act, 1881, the notice must be sent within 30 days of the bank’s return memo; the person who gave the cheque then has 15 days to pay; only after that does a criminal complaint become available, itself due within 30 days of that period ending. Missing any of those dates can close the criminal remedy off for good, though the money can still be pursued through an ordinary civil recovery suit. See Recovery suits.
This note describes the general position only. What a particular notice needs to say, and what deadline applies, depends on the transaction and the facts of the case, and nothing here is legal advice.