Cheque bounce: what is Section 138 NI Act and the procedure?

⚡ Short answerSection 138 of the Negotiable Instruments Act makes dishonour of a cheque for insufficient funds a criminal offence. The payee must send a written demand notice within 30 days of the cheque return memo; if the drawer doesn't pay within 15 days, the payee can file a complaint in the magistrate's court within the next 30 days. Punishment can extend to two years' imprisonment or twice the cheque amount.

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The mandatory timeline

Day 0: cheque bounces (keep the return memo). Within 30 days: send a legal demand notice. The drawer gets 15 days to pay. If unpaid, file the complaint within 30 days of that 15-day window expiring. Missing any limb can defeat the case.

What you need to prove

A legally enforceable debt, the cheque issued to discharge it, dishonour for funds reasons, a timely notice, and non-payment. The drawer can defend on grounds such as no debt, a blank/security cheque, or notice defects.

Related questions

What is the time limit to file a cheque bounce case?

Send the demand notice within 30 days of the bounce. After giving 15 days to pay, file the complaint within 30 days. So the case must be filed within roughly 45 days of the notice period ending.

Related reading

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General information for AY 2026-27, not professional advice. Rules change with each Finance Act / notification and depend on your facts — verify with a licensed CA or advocate before acting.