Cheque Bounced? Your Legal Steps Under Section 138 NI Act

Under Section 138 of the Negotiable Instruments Act, 1881, dishonour of a cheque issued for a legally enforceable debt is a criminal offence. Timelines are strict:

• Present the cheque within 3 months of its date (or within its validity).
• If it bounces, the bank gives a “cheque return memo” stating the reason (e.g. insufficient funds).
• Send a written legal demand notice to the drawer within 30 days of receiving the return memo.
• The drawer gets 15 days from receiving the notice to pay.
• If payment is not made, file a complaint before the competent court within 30 days after those 15 days end.

Possible consequences for the drawer include imprisonment up to 2 years, a fine up to twice the cheque amount, or both.

Keep the original cheque, return memo, notice copy and postal/courier proof safe. Missing a deadline can weaken your case, so get advice early.

This article is general information about Indian law, not legal advice. Please consult an advocate about your specific facts.

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