In short
- When a cheque given to pay a legally enforceable debt bounces, Section 138 of the Negotiable Instruments Act, 1881 can make it a criminal offence.
- The deadlines are strict: a written demand notice within 30 days of the bank's return memo, then 15 days for the other side to pay, then one month to file a complaint.
- Cheques are generally valid for three months from their date.
- Since November 2025, under Supreme Court guidelines, courts can serve the summons in a cheque bounce case by email or WhatsApp as well as by post or by hand. Summons also carry an online option (QR code or UPI link) to pay the cheque amount early.
- A civil suit to recover the money is a separate route and can run alongside.
Reviewed by 2 advocates · 1 Bar Council
Approved ·
Practises banking and civil disputes
Reviewed this guide for accuracy against the sources listed below.
02What the law says
Section 138 applies when a cheque issued to discharge a legally enforceable debt or liability is returned unpaid, typically because of insufficient funds or because it exceeds the arrangement with the bank. Courts have also applied it to some other return reasons, such as "account closed" or "payment stopped by drawer", depending on the facts.
For the offence to arise, the cheque must be presented within its validity, the payee must send a written demand notice within 30 days of receiving information from the bank, and the drawer must fail to pay within 15 days of receiving that notice.
A complaint is filed before a Magistrate, generally where the branch of the bank in which the payee holds the account (through which the cheque was presented for collection) is located (Section 142(2)). The court can impose imprisonment of up to two years, a fine of up to twice the cheque amount, or both. Under Section 143A, the court can order the drawer to pay interim compensation of up to 20% of the cheque amount while the case is pending. The offence can be settled (compounded) between the parties (Section 147). Under Supreme Court guidelines from September 2025, if the cheque amount is paid before the drawer's defence evidence is recorded, the court can allow settlement without extra costs. If it is paid later, costs usually apply: 5% of the cheque amount before the trial court's judgment, 7.5% before a Sessions Court or High Court, and 10% before the Supreme Court.
These guidelines come from Sanjabij Tari v. Kishore S. Borcar (Supreme Court, 25 September 2025), which asked courts to put them in place by 1 November 2025. They also cover electronic service of summons, online payment options and a standard format for complaints. How electronic service works in practice can depend on each state's rules for serving summons.
03Where you can go
- The drawer. Some people first ask for payment informally.
- Demand notice. A written notice to the drawer within 30 days of the return memo. It's usually sent by an advocate by registered post or courier, with proof of delivery.
- Magistrate's court. A complaint under Section 138 if payment isn't made in time.
- Civil court. A suit to recover the money, which can be a summary suit under Order XXXVII of the Code of Civil Procedure.
04How it usually works
- 01
The cheque is returned with a bank memo stating the reason. The date it was received matters.
- 02
A demand notice is sent within 30 days.
- 03
The drawer has 15 days from receiving the notice to pay.
- 04
If they don't, a complaint can be filed within one month after those 15 days end.
- 05
The court takes cognisance and summons the drawer. Summons can be served by post, by hand through the complainant, and electronically (email or WhatsApp). They usually include an online option to pay the cheque amount. At the first hearing the court may ask the drawer questions about the cheque and whether they want to settle. Settlement is possible at any stage.
05Time limits
- 3 months: cheque validity from its date.
- 30 days: from receiving the bank's return memo, to send the demand notice.
- 15 days: for the drawer to pay after receiving the notice.
- 1 month: after the 15 days end, to file the complaint. Courts can accept a delayed complaint if there's sufficient cause, but this isn't guaranteed.
- 60 days: under Section 143A, any interim compensation ordered must usually be paid within this time.
06Documents to gather
- The original bounced cheque
- The bank's return memo
- Proof of the underlying debt: agreement, invoice, loan transfer, messages
- Copy of the demand notice and proof of dispatch and delivery
- Your bank statement showing the cheque was presented
- The drawer's email address, mobile number and WhatsApp number, if you have them. Courts now ask for these, with an affidavit, when the complaint is filed.
- Note: complaints now begin with a short synopsis in a set format: parties, cheque, dishonour, notice, cause of action and jurisdiction, and relief sought.
07Common questions
08Questions to ask an advocate
If you speak to an advocate, these questions can help make the conversation useful.
- Is my cheque covered by Section 138, given the bank's return reason?
- Have all the deadlines been met, and if not, is there a way forward?
- Should I also file a civil suit, and which court has jurisdiction?
09Sources
- Negotiable Instruments Act, 1881 — Sections 138, 142, 143A and 147 (India Code) (opens in new tab)
- Code of Civil Procedure, 1908 — Order XXXVII (summary suits) (opens in new tab)
- RBI directive reducing cheque validity to three months (effective 1 April 2012) (opens in new tab)
- Sanjabij Tari v. Kishore S. Borcar, Supreme Court, 25 September 2025, 2025 INSC 1158; [2025] 9 SCR 1515 (guidelines on Section 138 trials and compounding) (opens in new tab)
- Delhi High Court, Practice Direction No. 157, 6 November 2025 (implementing the Supreme Court's guidelines in Delhi) (opens in new tab)