Cheque bounce under Section 138: timelines every payee must know

If a cheque given to you is returned unpaid for insufficient funds, Section 138 of the Negotiable Instruments Act, 1881 lets you take criminal action. The law has strict timelines, and missing one can weaken your case.

The key timelines

1. Present the cheque within its validity, normally 3 months from its date
2. Send a written demand notice to the drawer within 30 days of receiving the bank's return memo
3. The drawer then has 15 days from receiving the notice to pay
4. If they do not pay, file the complaint within one month after those 15 days end

What the law provides

• Punishment can extend to two years' imprisonment, a fine up to twice the cheque amount, or both
• The court may order interim compensation of up to 20% of the cheque amount (Section 143A)
• The offence is compoundable, so the parties can settle at any stage, including at Lok Adalat

Practical tips

• Keep the original cheque and the bank's return memo safe
• Send the notice by a trackable method and keep proof of delivery
• Note every date in writing

This article is general information, not legal advice. For your case, AdalatSaathi can connect you with an independent, enrolled advocate for the notice and complaint.

ℹ️ General information only, not legal advice.