Banking · 7 min read
Cheque Bounce Case under Section 138 — Full Procedure & Timeline (India)
By the India Law Simplified editorial team · Verified against primary government sources (bare Acts & official portals) · Last updated 2026-06-04
When a cheque bounces for insufficient funds, Section 138 of the Negotiable Instruments Act 1881 gives the payee a strong, time-bound remedy. The catch: you must follow the timeline precisely, or you lose the right to file.
1The three deadlines that decide your case
- Within 30 days of the bank's cheque-return memo — send a written demand notice to the drawer asking them to pay.
- The drawer then has 15 days to pay after receiving the notice.
- If unpaid after those 15 days, you must file the complaint within the next 30 days before the Magistrate.
2Step-by-step procedure
- Get the cheque-return memo from your bank stating the reason (e.g. 'funds insufficient').
- Send a legal demand notice by registered post / courier with acknowledgement, within 30 days.
- Preserve proof of dispatch and delivery of the notice.
- If unpaid in 15 days, file a complaint under Section 138 before the jurisdictional Magistrate.
- Attend hearings; the court may attempt mediation/settlement first.
3What you can recover
The offence is punishable with imprisonment up to 2 years and/or a fine up to twice the cheque amount. Courts frequently direct the drawer to pay compensation covering the cheque value. Jurisdiction generally lies where the payee's bank branch is located (post the 2015 amendment).
Frequently asked questions
What is the time limit to file a cheque bounce case?
After the 15-day payment window from your notice expires, you have 30 days to file the complaint before the Magistrate. Missing this window can bar the case.
Is a legal notice mandatory for cheque bounce?
Yes. A written demand notice within 30 days of the return memo is a mandatory pre-condition for a Section 138 complaint.
Can cheque bounce lead to jail?
Yes, it is a criminal offence punishable with up to 2 years imprisonment and/or fine up to twice the cheque amount, though courts often prioritise compensation.
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