Cheque Bounce Notice under Section 138 NI Act

Keep the original cheque, bank return memo and proof of the underlying debt. Section 138 of the Negotiable Instruments Act 1881 generally concerns a cheque issued for a legally enforceable debt or liability and dishonoured in circumstances covered by that provision.

The written demand notice must be issued within 30 days of receiving bank information about dishonour. The drawer has 15 days from receipt of the notice to pay. If payment is not made, the complaint must ordinarily be filed within one month of the cause of action arising after that period; this is a calendar month, not simply 30 days.

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This service is relevant if you received a cheque towards an enforceable loan, invoice, settlement or other liability and the bank returned it unpaid. Not every bounced cheque supports a prosecution under section 138 of the Negotiable Instruments Act. The reason for dishonour, existence of liability and presentation within the cheque validity period matter. Cheques are generally valid for three months from their date under banking directions. Bring the original cheque, return memo, transaction records and the date you received dishonour information.

You also need prompt advice if you are the drawer and have received a statutory demand notice. Check the actual receipt date, the amount claimed and whether the underlying debt is disputed or already paid. Company cheques require careful identification of the company and people legally responsible; naming every director is not automatically justified. This remains a Negotiable Instruments Act proceeding, not simply a BNS offence. Eligible parties may seek assistance through NALSA or their State or District Legal Services Authority.

Track delivery carefully and preserve returned envelopes, acknowledgements and tracking information. Your advocate should calculate the payment window and complaint deadline using the actual facts, including any issue of deemed service. If payment arrives, record the amount and date and clarify whether it fully resolves the claim. Do not assume a disputed or incomplete payment automatically closes the matter or permits the original timetable to be ignored.

If payment is not made within the statutory period, discuss the appropriate court, required documents and complaint filing without delay. A civil recovery claim may also need separate limitation analysis. Settlement can remain possible during proceedings, but record its terms and obtain appropriate court orders where required. Keep originals safely available for evidence. Neither a notice nor a filed complaint guarantees recovery, conviction or a particular completion date.