Cheque bounce: the Section 138 timeline you cannot miss
A dishonoured cheque gives you a strong legal remedy — but only if each step happens within strict time limits.
Accellaw Editorial
Section 138 of the Negotiable Instruments Act, 1881 makes dishonour of a cheque for insufficient funds a criminal offence, which gives the payee real leverage. The catch is that the remedy is only available if a strict sequence of deadlines is followed.
The sequence
- Present the cheque within its validity period — three months from the date on the cheque
- Send a written demand notice within 30 days of receiving the bank's return memo (Section 138, proviso (b))
- The drawer then has 15 days from receiving the notice to pay (proviso (c))
- If they do not pay, file the complaint within one month after those 15 days expire (Section 142(1)(b))
Where to file
Since the 2015 amendment, the complaint is filed in the court with jurisdiction over the branch of the payee's bank where the cheque was presented for collection (Section 142(2)). Cases are tried summarily (Section 143), and the court can order the drawer to pay interim compensation of up to 20% of the cheque amount (Section 143A). If the drawer is convicted and appeals, the appellate court can require a deposit of at least 20% of the fine or compensation (Section 148).
Where people go wrong
The most common mistake is waiting too long to send the notice while "giving them a chance". Once the 30-day window passes, the criminal remedy under Section 138 is no longer available for that dishonour, leaving only a slower civil recovery.
What to keep
- The original cheque and the bank return memo
- Proof of the underlying debt (invoice, agreement, or messages)
- Proof of dispatch and delivery of the demand notice
For what the notice itself must say, see our guide to the Section 138 notice format, which includes a sample.