In short. Under section 138 of the NI Act, the payee must send a legal notice within 30 days of receiving the bank's return memo. The drawer has 15 days from receiving the notice to pay. If not paid, the complaint must be filed within one month, before the court where the payee's bank branch is. Punishment is up to 2 years, or fine up to twice the cheque amount, or both.
Cheque bounce cases fill a large share of the criminal courts in Delhi, Noida and Ghaziabad. They are criminal cases, but the purpose is almost always money: the complainant wants the amount paid, and the accused wants the case to end. That shapes everything, from how the notice is drafted to when settlement makes sense. Most of these cases end in settlement, and the ones that are fought to judgment usually turn on documents and dates.
We act for both sides: payees who want to recover money, and drawers who have received a notice or summons. If you want an overview of how criminal cases run generally under the new laws, see our page on criminal law practice. If the cheque was part of a larger fraud with forged documents or a chain of victims, the economic offences lawyer page is the better starting point.
- Law
- Section 138, Negotiable Instruments Act 1881
- Legal notice
- Within 30 days of receiving the return memo
- Time to pay
- 15 days from the drawer's receipt of the notice
- Complaint
- Within one month after the 15 days expire (s.142)
- Where to file
- Court where the payee's bank branch is (s.142(2))
- Punishment
- Up to 2 years, or fine up to twice the cheque amount, or both
When is a bounced cheque a criminal offence under section 138?
A dishonoured cheque is an offence under section 138 when five things are true. The cheque was issued to discharge a legally enforceable debt or liability. It was presented within its validity, which is three months from the date on it. It was returned unpaid because funds were insufficient or it exceeded the arrangement with the bank. The payee sent a written demand within 30 days of receiving information of the dishonour. And the drawer failed to pay within 15 days of receiving that demand.
The offence is complete only when the 15 days pass without payment. Before that, there is no offence, only a dishonoured cheque. That is why the notice matters so much: it is not a formality but the step that gives the drawer a last chance and fixes the date from which the complaint can be filed.
Section 139 presumes, unless the contrary is proved, that the cheque was given for a debt or liability. That presumption is what makes section 138 attractive to payees. The accused can rebut it, but the burden shifts to them, and they need to show a probable defence rather than simply deny the debt.
Cheque bounce timeline at a glance
Count each period from the exact date. Keep envelopes, tracking printouts and bank memos; they are your proof of these dates.
| Stage | Time limit | Counted from |
|---|---|---|
| Present the cheque | Within 3 months | The date written on the cheque |
| Send the legal notice | Within 30 days | Receipt of the bank's return memo or information of dishonour |
| Drawer pays | Within 15 days | Drawer's receipt of the notice |
| File the complaint | Within 1 month | The day after the 15-day period ends |
| Late complaint | Delay can be condoned | Only on showing sufficient cause, at the court's discretion |
| Interim compensation, if ordered | Within 60 days, extendable by 30 | The date of the order under section 143A |
| Appeal against conviction | Generally 30 days | The date of the judgment |
My cheque has bounced. How many days do I have to send a legal notice?
Thirty days from the date you receive the bank's return memo or other information that the cheque was dishonoured. Not thirty days from the date on the cheque, and not from the date of presentation. If your bank sent the memo by post and it reached you a week after the dishonour, the 30 days usually start from receipt, but you should be able to prove that date.
A cheque can be presented more than once within its three-month validity, and many payees do that after the drawer asks for time. Courts have accepted that a notice can be sent after a later dishonour, so long as everything else is within time. But only one prosecution can follow for one cheque, so do not send a notice after every return.
Do not leave the notice to the last week. A notice drafted in a hurry often gets the amount, the cheque number or the drawer's address wrong, and those mistakes come back in cross-examination two years later.
What should a cheque bounce legal notice say?
The notice must clearly demand payment of the cheque amount. It should give the cheque number, date, amount, bank, the date of dishonour and the reason in the return memo, the transaction for which the cheque was given, and a demand to pay within 15 days of receipt. If you also claim interest or other dues, state them separately so that the demand for the cheque amount itself is unmistakable.
Send it to every address you have for the drawer, and for a company, to the registered office and to the directors who ran the business. Speed post or registered post with tracking is the standard. Sending the same notice by email or WhatsApp as well helps prove service, especially when the drawer refuses delivery or has moved.
A notice returned with remarks such as 'refused', 'not claimed' or 'door locked' is usually treated as served if it was sent to the correct address. A notice sent to an old address the payee knew to be wrong is not. Keep the returned envelope unopened; it is evidence.
Which bank return reasons can lead to a section 138 case?
The section speaks of insufficient funds and amounts exceeding the arrangement, but courts have read it more widely. These are the common return reasons on a memo.
- Funds insufficient or exceeds arrangement. The core case under section 138.
- Payment stopped by drawer. Usually covered. The drawer can still defend by showing there was no debt due, or that the account had enough funds and the stop instruction had a valid reason.
- Account closed. Generally treated as covered, because closing an account is a way of making sure the cheque is not honoured.
- Signature differs or incomplete. Often held covered where the mismatch was deliberate. It depends on the facts and the evidence.
- Refer to drawer. A vague remark that banks use for various reasons, often insufficient funds. The bank's records can be summoned to show the actual reason.
- Technical defects. Overwriting, words and figures differing, a stale or post-dated cheque presented too early. These usually do not support a case, because the cheque was never a valid instrument for presentation.
Where do I file a cheque bounce case in Delhi, Noida or Ghaziabad?
Before the court within whose local limits the branch of the bank where the payee maintains the account is situated, if the cheque was deposited for collection through that account. That is the rule in section 142(2), added by the 2015 amendment. It means the payee files where their own bank branch is, not where the drawer lives or where the drawer's bank is.
In Delhi, cheque bounce complaints go to the courts of the Judicial Magistrates designated for NI Act cases in the district court complexes: Tis Hazari, Saket, Patiala House, Karkardooma, Rohini, Dwarka and Rouse Avenue, depending on the area of the payee's branch. Delhi has also set up digital courts for a share of cheque bounce cases, where filing and early stages are handled online. In Noida, complaints are filed at the Gautam Buddh Nagar court at Surajpur; in Ghaziabad, at the Ghaziabad district court.
If the payee's account is in Gurugram and the drawer is in Delhi, the case goes to Gurugram. Once one complaint is filed in a court with jurisdiction, later complaints between the same parties for other cheques can be filed in, or transferred to, the same court, which keeps the matters together.
How a cheque bounce complaint runs in court
Section 143 makes these cases triable summarily, and the evidence of the complainant can be given by affidavit under section 145. In practice the stages are these.
Filing the complaint
The complaint is filed with the original cheque, return memo, notice, postal receipts, tracking report and an affidavit of evidence. The court fee is fixed by the state's rules. The complainant or an authorised representative signs; for a company, a board resolution or authority letter is attached.
Pre-summoning and summons
The magistrate examines the complaint and the affidavit. If a case is made out, summons are issued to the accused. Service now often includes email and other electronic modes as well as post and process server.
Appearance and bail
The offence is bailable. The accused appears, furnishes a bail bond and surety, and is released the same day. If the accused does not appear despite service, the court can issue bailable and then non-bailable warrants.
Notice of accusation and plea
The court explains the accusation. The accused pleads guilty or claims trial and states the defence. The court may refer the parties to mediation at this stage, and may consider interim compensation under section 143A.
Evidence, statement and arguments
The complainant's affidavit evidence is followed by cross-examination. The accused's statement is recorded, defence evidence is led if any, and the parties argue. The court then convicts or acquits.
I have received a cheque bounce legal notice. What should I do?
Check the dates first, then decide within the 15 days. If the debt is genuine and you can pay, paying the cheque amount within 15 days of receiving the notice prevents the offence altogether. Pay by a traceable mode, take a written receipt referring to the cheque, and ask for the cheque back.
If you dispute the debt, send a considered reply within the 15 days, explaining why the cheque was not for a debt that was due: it was a security cheque, the goods were never supplied, the loan was already repaid, or the amount was filled in wrongly. A reply is not legally required, but a clear, early version of your defence carries weight at trial, and silence followed by a new story two years later does not.
Do not write a reply that admits the debt and asks for time unless that is what you mean. Such a letter is the first exhibit the complainant will rely on. If you need time to pay, it is usually better to negotiate a written settlement that ends the matter.
I got summons in a cheque bounce case. Will I be arrested?
No, not if you appear. An offence under section 138 is bailable, and on appearance the court releases the accused on a bail bond, usually with one surety. Arrest happens only through a warrant issued because the accused did not appear after being served, which is why ignoring a summons is the worst choice available.
If you have been away and a warrant has already been issued, the remedy is to appear before the court with an application to cancel the warrant and furnish bail. In most cases the court does that on the same day. Anticipatory bail is rarely needed in a cheque case; for the general position on bail, see our bail lawyer page.
After bail, you can ask for exemption from personal appearance on routine dates, especially if you live in another city. Courts in Delhi and NCR generally allow this, though they expect the accused to attend for the plea, for the statement of the accused and when the court specifically directs.
Defences that work in a cheque bounce case
A defence must be shown on a balance of probabilities, through documents, cross-examination of the complainant or your own evidence. A bare denial rarely succeeds.
- No legally enforceable debt. The cheque was not for a debt due on the date of presentation: the loan was never given, the goods were not supplied, or the amount was already repaid. Cross-examination on the source of the money, income tax returns and the complainant's books often decides this.
- Security cheque. A cheque given as security is not automatically outside section 138. The question is whether a debt had crystallised and was due when the cheque was presented. If nothing was due on that date, the defence is strong.
- Notice or limitation defects. Notice sent after 30 days, complaint filed before the 15 days ended or after the one month without condonation, notice to a wrong address, or no demand for the cheque amount.
- Jurisdiction. A complaint filed in a court other than the one where the payee's bank branch is located.
- Material alteration. The amount, date or name was altered without the drawer's consent. Where the drawer handed over a signed blank cheque, the position is harder, because the law treats that as authority to fill it in, unless misuse is shown.
- Not in charge of the company. A director who was not in charge of, and responsible for, the conduct of the company's business at the relevant time, such as an independent or non-executive director, may not be liable under section 141.
Can directors and partners be made accused in a cheque bounce case?
Yes, under section 141, when the cheque was issued by a company or firm. Every person who, at the time of the offence, was in charge of and responsible to the company for the conduct of its business can be prosecuted along with the company, unless they prove the offence was committed without their knowledge or that they used due diligence to prevent it.
The company itself must be made an accused. A complaint against the directors alone, without the company, generally fails. The complaint must also contain specific averments about each director's role. A managing director or the director who signed the cheque is in a different position from an independent or nominee director, who is ordinarily not liable unless a specific role is shown.
Directors who resigned before the cheque was issued, and filed that resignation with the ROC, have a strong ground for quashing. That application is usually made before the High Court under section 528 of the Bharatiya Nagarik Suraksha Sanhita 2023, which replaced section 482 of the old Code.
What is interim compensation under section 143A?
Section 143A lets the trial court order the accused to pay interim compensation of up to 20% of the cheque amount while the case is pending. It can be ordered in a summary trial or summons case when the accused pleads not guilty. The amount must be paid within 60 days of the order, which the court can extend by 30 days for sufficient cause.
Courts have held that this power is discretionary, not automatic. The magistrate is expected to look at whether the complainant has a prima facie case, whether the defence is plausible, and the financial position of the parties, and to give reasons. An accused with a genuine defence should argue against a 143A order rather than treat it as a formality.
If the accused is later acquitted, the court directs the complainant to repay the interim compensation with interest at the bank rate. If the accused is convicted, the amount is adjusted against the fine or compensation. Unpaid interim compensation can be recovered as if it were a fine.
Do I have to deposit money to appeal a cheque bounce conviction?
Usually, yes. Under section 148, when a convicted accused appeals, the appellate court (normally the Sessions Court) may order a deposit of at least 20% of the fine or compensation awarded by the trial court. This is in addition to any interim compensation already paid under section 143A. Courts treat the deposit as the normal rule, and depart from it only in exceptional cases with reasons.
The deposit has to be made within 60 days of the order, extendable by 30 days. The appellate court can release it to the complainant during the appeal. If the appeal succeeds, the complainant is directed to repay it with interest. Failure to deposit can lead to the appeal being dismissed or the suspension of sentence being withdrawn.
A complainant who loses at trial can also challenge the acquittal. The route, whether by special leave of the High Court or by an appeal as a victim, has been the subject of recent Supreme Court decisions, so we check the current position before advising on it.
What an accused may have to pay, and when
| Stage | Provision | Amount | Refundable? |
|---|---|---|---|
| During trial | Section 143A | Up to 20% of the cheque amount, if ordered | Yes, with interest, on acquittal |
| On conviction | Section 138 | Fine up to twice the cheque amount, and/or up to 2 years' imprisonment | Only if set aside on appeal |
| On appeal by the accused | Section 148 | At least 20% of the fine or compensation | Yes, with interest, if the appeal succeeds |
| On settlement | Section 147 | The agreed amount, sometimes with costs ordered by the court | Not applicable |
Can a cheque bounce case be settled or compounded?
Yes, at any stage. Section 147 makes the offence compoundable, so the complainant and the accused can settle the case before the trial court, during appeal or even in revision before the High Court. Courts encourage it, and Delhi's district courts refer many cheque cases to their mediation centres. Lok Adalats also settle large numbers of these cases.
The Supreme Court has encouraged early settlement, and courts may impose costs when a case is compounded late in the proceedings, so settling early is usually cheaper. A settlement should be in writing, signed by both parties, stating the amount, the schedule, how payments will be made and what happens on default. The complaint is compounded or withdrawn once payment is complete, or on recording the settlement with conditions.
Settlement by instalments carries a risk for the complainant: the accused pays the first two and stops. Courts usually record that, on default, the complaint will be revived or the settlement amount recovered as a fine. Our page on alternate dispute resolution explains how mediation at the courts works.
Should I also file a civil suit for the money?
Often, yes, if the amount is large. A section 138 case punishes the drawer and can lead to compensation, but it is not a recovery suit. A civil suit, usually a summary suit under Order 37 of the Code of Civil Procedure 1908 based on the dishonoured cheque, leads to a decree that can be executed against the drawer's property and bank accounts. Both can run at the same time.
The limitation for a suit on a cheque or a loan is generally three years. For commercial transactions with a specified value of ₹3 lakh and above, the suit goes to the commercial court, and pre-institution mediation under section 12A of the Commercial Courts Act is required unless urgent interim relief is sought. Our pages on civil law practice and the commercial court in Delhi explain those routes.
Where the drawer is a borrower and the payee a bank or NBFC, cheque bounce cases usually run alongside SARFAESI or DRT proceedings. Our page on banking and insurance laws covers that side.
A made-up example: a business cheque that bounced
Here's a made-up example. A wholesaler in Ghaziabad supplies goods worth ₹8 lakh to a retailer in Laxmi Nagar, who gives a post-dated cheque. The cheque, presented at the wholesaler's bank in Vaishali, returns with 'funds insufficient'. The retailer says the goods were partly damaged and he will pay ₹6 lakh.
The wholesaler sends a notice within 30 days of the return memo, demanding the cheque amount. No payment comes within 15 days. The complaint is filed within the next month, before the Ghaziabad court, because the wholesaler's branch is in Vaishali. At trial, the retailer's defence is that part of the goods was defective, so the full amount was not a debt due.
The outcome would depend on the invoices, delivery challans, any complaint about damage made at the time, and how the cross-examination goes. Cases like this often settle in mediation at a figure between the two positions. That is a common pattern, not a forecast for any real case.
Documents to bring
Bring the originals of the cheque and return memo if you are the complainant; we will keep copies and return them until filing.
If you are the payee (complainant)
- Original dishonoured cheque
- Bank return memo and your bank's letter or SMS
- Invoices, loan agreement, ledger or messages showing the debt
- Copy of the legal notice, postal receipts and tracking report
- Returned envelope, if the notice came back
- Your ID and, for a company, a board resolution
If you are the drawer (accused)
- The legal notice with its envelope
- Summons and complaint copy, if received
- Your bank statement for the period
- Proof of payments already made
- Agreements or messages showing the cheque was security
- For a company: resignation letters and ROC filings of directors
How long does a cheque bounce case take in Delhi?
Section 143 asks the court to try to conclude a cheque bounce trial within six months. In practice, a contested case in Delhi, Noida or Ghaziabad commonly takes one to three years at the trial stage, longer if the accused avoids service or the court's list is heavy. Digital courts and mediation have shortened some cases considerably.
Time is spent mainly on serving the accused, on adjournments for cross-examination and on settlement talks that fail. An appeal to the Sessions Court and a revision before the Delhi High Court can add more time. A case that settles at the first or second hearing, on the other hand, can end within a few months of filing.
Mistakes that sink cheque bounce cases
For complainants, the usual mistakes are late notices, notices that demand a different amount from the cheque, complaints filed one day before the 15 days end, and filing in the wrong court. Another is lending cash with no record and then being unable to explain at trial where the money came from. Courts look hard at large cash loans with no trace in bank statements or tax returns.
For the accused, the mistakes are ignoring the notice, ignoring the summons until a warrant is issued, and running a defence at trial that was never mentioned in the reply to the notice. Handing over signed blank cheques 'as security' without a written record of the terms is the mistake that causes most of these cases in the first place.
Both sides sometimes treat the criminal case as the whole dispute. It is often only one part. A supplier dispute, a loan between relatives or a partnership breakdown may need a civil claim, an accounts settlement or arbitration to resolve fully.
How we handle cheque bounce matters
Advocate B.K. Singh's first question in any cheque case is the dates: the cheque, the return memo, the notice, its delivery and the complaint. A large share of these cases are decided by those five dates before anyone argues the merits. For the accused, he looks next at the transaction behind the cheque and the complainant's paper trail for it.
Advocate Sadhna Singh usually drafts the notice or the reply, prepares the complaint and affidavit of evidence, and attends the routine dates. We appear in the NI Act courts in the Delhi district complexes, at Surajpur and in Ghaziabad, and before the Delhi High Court in quashing and revision matters. You can read about Advocate B.K. Singh and Advocate Sadhna Singh, or see the other case types on our criminal law practice page.
Fees are discussed at the first meeting and agreed in writing for each stage: notice, complaint, trial, appeal. Court fees and other expenses are separate. If you have a return memo or a notice, send it through the online enquiry form or WhatsApp with its date, so we can tell you how many days are left.
Frequently asked questions
What is the time limit to send a cheque bounce notice?
Thirty days from the date you receive the bank's return memo or other information that the cheque was dishonoured. A notice sent after 30 days means no valid complaint can be filed on that dishonour. If the cheque is still within its three-month validity, it can be presented again.
How many days does the drawer get to pay after a cheque bounce notice?
Fifteen days from the date the drawer receives the notice. The offence is complete only if payment is not made within those 15 days. Payment of the cheque amount within that period ends the matter, so take a receipt and the cheque back.
When should the cheque bounce complaint be filed?
Within one month from the day after the 15-day payment period ends, under section 142 of the NI Act. A complaint filed before the 15 days are over is premature. A late complaint can be accepted only if the court condones the delay for sufficient cause.
Is cheque bounce a criminal or civil case?
Section 138 makes it a criminal offence, tried by a magistrate, punishable with up to two years, a fine up to twice the cheque amount, or both. The payee can also file a separate civil suit for recovery of the money, and both can run together.
Can I be arrested for cheque bounce?
Not if you appear in court when summoned. The offence is bailable, so the court releases you on a bail bond on appearance. Arrest happens only on a warrant issued because you did not appear after the summons was served.
Can a cheque bounce case be filed for a security cheque?
Yes, if a debt had become due and payable on the date the cheque was presented. If nothing was owed on that date, for example because the contract was never performed, the accused has a strong defence. The documents of the deal decide this.
Can a cheque bounce notice be sent by WhatsApp or email?
Speed post or registered post to the correct address is the standard and safest mode. Courts have accepted email and WhatsApp in some cases, so sending the notice through those as well helps prove service, especially when the drawer avoids postal delivery.
What if the cheque bounce notice was refused or returned unclaimed?
A notice sent to the drawer's correct address and returned as 'refused' or 'unclaimed' is generally treated as served. Keep the returned envelope sealed and the tracking report. The drawer can contest this only by showing the address was wrong.
Which court has jurisdiction in a cheque bounce case?
The court where the payee's bank branch is located, if the cheque was deposited for collection through the payee's account, under section 142(2) as amended in 2015. The drawer's location and the drawer's bank do not decide jurisdiction.
Is interim compensation under section 143A mandatory?
No. Courts have held it is discretionary. The magistrate can order up to 20% of the cheque amount, after considering the strength of the complaint and the defence, and should give reasons. It is refundable with interest if the accused is acquitted.
How much deposit is needed to appeal a cheque bounce conviction?
Under section 148, the appellate court may order a deposit of at least 20% of the fine or compensation awarded, in addition to any section 143A amount. It is treated as the normal rule. The deposit is refunded with interest if the appeal succeeds.
Can a cheque bounce case be settled after conviction?
Yes. Section 147 makes the offence compoundable at any stage, including during appeal and revision. The parties file a settlement and the court records compounding, which ends the conviction. Courts may impose costs for late compounding.
Can directors be prosecuted when a company's cheque bounces?
Yes, under section 141, if they were in charge of and responsible for the company's business when the offence was committed. The company must also be made an accused. Independent and non-executive directors are ordinarily not liable without a specific role.
Can I file a cheque bounce case for a cash loan to a friend?
Yes, but expect questions about where the cash came from. Courts look at bank withdrawals, income tax returns and any written acknowledgement. Large cash loans with no trace in your records weaken the presumption under section 139.
What happens if the accused does not pay interim compensation?
Unpaid interim compensation can be recovered as if it were a fine, through attachment and sale of property. The court may also take the non-payment into account when deciding other applications, such as exemption from appearance.
Can I file one complaint for several bounced cheques?
Often several cheques from the same transaction can be covered, but there are limits on how many offences can be tried together in one case. Where there are many cheques, separate complaints may be needed, usually listed before the same court.
Do I need to attend every hearing in a cheque bounce case?
No. After bail, the accused can usually get exemption from personal appearance on routine dates, and the complainant can appear through an advocate or an authorised representative. Both must attend when the court specifically directs.
What if the cheque was signed blank and someone else filled the amount?
A signed blank cheque is generally treated as authority to fill it in, so this alone is not a defence. You need to show that the amount filled in was not owed, or that the cheque was misused beyond the agreed terms. Written proof of the terms helps.
Can a cheque bounce case be quashed by the High Court?
Yes, in limited situations, through a petition under section 528 of the BNSS (old section 482 CrPC). Common grounds include a director who had resigned before the cheque was issued, a complaint that is ex facie time-barred, or a settlement between the parties.
How long does a cheque bounce case take in Delhi?
Section 143 asks the court to try to finish the trial within six months, but contested cases in Delhi commonly take one to three years. Cases that settle in mediation or at an early hearing can end within a few months.