Time-sensitive: the demand notice must be sent within 30 days of receiving the bank's return memo. If you've just received one, contact us now.
Under Section 138 of the Negotiable Instruments Act, 1881, dishonour of a cheque issued to discharge a debt is a criminal offence, punishable with imprisonment up to two years, a fine up to twice the cheque amount, or both. The threat of prosecution makes it one of the most effective recovery tools available.
The key deadlines
- Present the cheque within its validity (three months from its date).
- Send a written demand notice within 30 days of receiving the return memo from the bank.
- The drawer has 15 days from receiving the notice to pay.
- File the complaint within one month after those 15 days expire. Late filing can be condoned only for sufficient cause.
A detailed walkthrough: Cheque bounce: the timelines that matter.
What we handle
- drafting and serving the statutory demand notice correctly, to the drawer and, for companies, to the directors responsible;
- filing the complaint before the Magistrate in the correct court. Under Section 142(2), this is where your bank branch, where the cheque was presented for collection, is located;
- applying for interim compensation of up to 20% of the cheque amount under Section 143A;
- seeking a deposit of at least 20% if the accused appeals a conviction (Section 148);
- negotiating settlement and compounding at any stage (Section 147);
- defending drawers who have a genuine defence, such as no legally enforceable debt.
Cheques issued by companies
Where a company's cheque bounces, Section 141 allows prosecution of the company and of the directors and officers who were in charge of and responsible for its business. The complaint must contain specific allegations against each director named, which is a common reason complaints fail if drafted carelessly.
Frequently asked questions
What is the time limit to send a cheque bounce notice?
Within 30 days of receiving information of dishonour from the bank, usually the return memo. Missing this deadline means the Section 138 remedy is lost, though civil recovery may still be possible.
Is a cheque given as security covered?
Often yes. If the cheque was presented for a legally enforceable debt existing on the date of presentation, a security cheque can found a Section 138 case. It depends on the facts.
How long does a cheque bounce case take?
Many cases settle within months once the accused appears, especially after interim compensation is sought. Contested trials can take one to three years.
Can I also file a civil suit?
Yes. A Section 138 complaint and a civil suit (for example, a summary suit) can run in parallel, since one punishes the offence and the other recovers the money with interest.
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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