Cheque-Bounce
Your cheque bounced. The clock has started.
ection 138 of the Negotiable Instruments Act, 1881 gives a payee a narrow window of strict statutory deadlines to convert a dishonoured cheque into a criminal recovery. Miss them, and the right is lost. We act quickly, accurately, and only on facts that meet the section.
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Send us your cheque details
30 day notice clock starts from the bank’s memo. We respond within one working day.
43,05,932
Cheque bounce cases pending in India
Ministry of Law & Justice, Lok Sabha Unstarred Q.4190 dated 20 Dec 2024
30 days
To send a legal notice from dishonour memo
Section 138(b), NI Act, 1881
15 days
Drawer’s window to pay after notice
Section 138(c), NI Act, 1881
20%
Interim compensation court can order
Section 143A, NI Act (inserted 2018)
Action in three directions, depending on which side you are on
We take cheque bounce work for both payees pursuing recovery and drawers defending complaints. The facts decide the strategy.
Recovery for the payee
From dishonour memo to legal notice within 30 days, complaint under Section 138 read with Section 142, interim compensation under Section 143A, and execution after conviction.
Defence for the drawer
Quashing on jurisdictional, limitation, or vicarious liability grounds. Compounding under Section 147 and Damodar S. Prabhu guidelines. Negotiated settlements where viable.
Appellate and revisional remedies
Appeals before Sessions Court under Section 374 CrPC and revision before the High Court. Section 148 deposit applications. Suspension of sentence and bail in S.138 appeals.
A statute-driven timeline, not a guess
The Negotiable Instruments Act sets exact windows. Each step has a date. We track them.
Cheque dishonoured
We collect the bank memo, the cheque, the underlying transaction documents, and the cause of issue. The cheque must have been presented within its validity period.
Day 0
Statutory legal notice
A demand notice is sent in writing within 30 days of the bank’s dishonour memo, by speed post and email where permissible. Service is critical.
Within 30 days
Wait the 15 days
The drawer has 15 days from receipt of notice to pay. If paid, the cause of action extinguishes. If not, the offence is complete on day 16.
Day 31 to 45
Complaint filed
A complaint under Section 138 read with Section 142 must be filed within 30 days of expiry of the 15 day window, before the Magistrate having territorial jurisdiction under Section 142(2).
Day 46 to 75
Built for Section 138 prosecutions, not just any litigation
We are a focused chamber. Each matter is handled by a partner who has actually argued these in court, not delegated to junior associates without supervision.
We file within the statutory window
Section 138 prosecutions are won or lost on dates. We treat the 30 and 15 day timelines as non-negotiable and document service rigorously.
Section 143A and 148 are pursued
Interim compensation up to 20% during trial and a 20% deposit on appeal are real, underused remedies. We move applications early.
Jurisdiction handled correctly
Post the 2015 amendment to Section 142(2), territorial jurisdiction lies where the payee’s bank is situated. We file in the correct court the first time.
What clients ask first
Answers grounded in current Indian law. For specifics on your matter, please speak with us.
Thirty days from the date you receive the bank’s dishonour memo. The notice must demand payment of the cheque amount in writing. If you miss the thirty day window, the right to prosecute under Section 138 is lost, though a civil suit for recovery may still lie.Section 138 proviso (b), Negotiable Instruments Act, 1881
Imprisonment for a term that may extend to two years, or with a fine which may extend to twice the amount of the cheque, or with both. In practice, courts in most cases impose a fine equal to the cheque amount plus interest, and compensation to the payee under Section 357 CrPC.Section 138, Negotiable Instruments Act, 1881
Yes. Section 143A, inserted by the 2018 amendment, empowers the Magistrate to direct the drawer to pay interim compensation up to 20% of the cheque amount, payable within 60 days. This is a powerful tool and we move for it early in the trial.Section 143A, NI Act (Act 20 of 2018)
After the 2015 amendment, the complaint must be filed in the court within whose local jurisdiction the bank branch of the payee, where the cheque was delivered for collection, is situated. For cheques cleared through CTS, the location of the payee’s account branch governs.Section 142(2), NI Act, as amended by Act 26 of 2015
You can pay the cheque amount within fifteen days of receipt of notice and the matter ends. You can dispute the underlying liability and respond to the notice on facts. You can also seek compounding under Section 147 at the appropriate stage. Doing nothing is the worst option, because once a complaint is filed, summons and bond requirements follow.Sections 138 proviso (c) and 147, NI Act; Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663
The original cheque, the bank’s dishonour memo, proof of the underlying transaction such as invoice, ledger, MoU, or loan documents, your KYC, and any prior correspondence with the drawer. Bring scans or photographs if originals are not on hand. We can begin the assessment with what you have.
A dishonoured cheque is not a closed door, until it is.
The Negotiable Instruments Act gives you a tightly defined window to act. Talk to us before the clock runs out.
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