A dishonoured cheque can be the strongest piece of evidence in a recovery case, because Section 138 of the Negotiable Instruments Act, 1881 makes it a criminal offence when certain conditions are met. Those conditions are almost all about time. Miss one, and the criminal remedy may be lost.
Step 1: Present the cheque in time
A cheque must be presented to the bank within its period of validity, currently three months from the date on the cheque. You can present it more than once within that period. Each dishonour gives a fresh opportunity, but you can prosecute on only one.
Step 2: Get the return memo
When the cheque is dishonoured, for example for "funds insufficient", "exceeds arrangement" or "payment stopped by drawer", your bank gives you a return memo. Keep the original with the cheque. The date you receive information of dishonour starts the next clock.
Step 3: Send the demand notice within 30 days
You must send a written notice to the drawer demanding the cheque amount within 30 days of receiving information of dishonour. The notice should state the cheque details, the dishonour, and the demand for payment. For a company cheque, it should also be addressed to the directors in charge.
Step 4: The drawer has 15 days to pay
The offence is complete only if the drawer fails to pay within 15 days of receiving the notice. If the notice is refused or the drawer avoids receiving it, courts generally treat it as served when properly addressed and sent.
Step 5: File the complaint within one month
The complaint must be filed within one month from the day after the 15-day period ends. The court may condone delay if there is sufficient cause, but you should never rely on that. File in the court with jurisdiction over the branch of your bank where the cheque was delivered for collection (Section 142(2)).
After filing
- Summons are issued to the accused.
- Interim compensation: the court may order the accused to pay up to 20% of the cheque amount during the trial (Section 143A).
- Trial: cases are tried summarily where possible, and evidence can be given on affidavit.
- Appeal: if convicted, the accused can be required to deposit at least 20% of the fine or compensation to pursue an appeal (Section 148).
- Settlement: the offence is compoundable at any stage (Section 147), and many cases settle once the accused appears.
Quick timeline
- Day 0: cheque returned; you receive the memo.
- By day 30: demand notice sent.
- Notice received, plus 15 days: payment deadline.
- Within one month after that: complaint filed.
If you've missed a deadline
The Section 138 route may be lost, but the debt itself usually isn't. You may still recover through a civil suit, such as a summary suit based on the cheque, within the limitation period. Talk to us about your cheque.
Frequently asked questions
Can I present a bounced cheque again?
Yes, within its three-month validity. You can then base your notice on a later dishonour, but you can prosecute only one cause of action.
What if the drawer pays part of the amount after the notice?
A part payment doesn't automatically end the case. The complaint is for the full amount demanded, though the court will take payments into account. Any settlement should be recorded in writing.
This page is general information about Indian law as of 15 October 2026, not legal advice. Every case turns on its own facts. Please speak to a lawyer before acting on it. See our disclaimer.
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