A dishonoured cheque given for a debt or liability can lead to a criminal case under Section 138 of the Negotiable Instruments Act, 1881. The remedy is strong, but only if strict deadlines are met.
The timeline
- Present the cheque within 3 months of its date.
- When it bounces, the bank gives a return memo stating the reason.
- Send a legal notice within 30 days of receiving the return memo.
- The drawer has 15 days from receiving the notice to pay.
- If unpaid, file the complaint within 1 month after those 15 days end.
Where to file
The complaint is filed in the court with jurisdiction over the bank branch where the cheque was deposited for collection. If you deposited it in Gurugram, the case can be filed in the Gurugram courts.
What the law provides
- Punishment of up to 2 years' imprisonment, a fine of up to twice the cheque amount, or both.
- Interim compensation of up to 20% of the cheque amount can be ordered while the case is pending (Section 143A).
- On appeal against conviction, the appellate court can require a deposit of at least 20% (Section 148).
- Cases can be settled by compromise at any stage.
If you issued the cheque
Take the notice seriously: paying within the 15 days ends the matter. If you dispute the liability, for example because the cheque was given as security, was misused, or the debt was already paid, reply to the notice and get advice early, as the defence depends on documents.
How we can help
We draft and send the legal notice, file and prosecute the complaint, seek interim compensation, and defend people who have received cheque bounce notices or summons.