Cheque Bounce Case Filing Process in India (2026): Section 138 NI Act Guide
If a cheque issued to you is dishonoured, you may be able to initiate proceedings under Section 138 of the Negotiable Instruments Act, 1881, provided the statutory requirements are satisfied. The notice and filing deadlines are important, so the relevant dates and documents should be checked carefully.
Important: A cheque bounce does not automatically result in a valid Section 138 case. Among other requirements, the cheque must relate to a legally enforceable debt or liability and the statutory notice procedure must be followed.
Step 1: Cheque Is Dishonoured
The bank may return a cheque unpaid for reasons such as:
- Insufficient funds
- Account closed
- Payment exceeding the arrangement with the bank
- Other return reasons recorded in the bank return memo
Preserve the original cheque and the bank return memo. These documents can become important evidence if proceedings are initiated.
Step 2: Send the Statutory Demand Notice
Under Section 138, the payee or holder in due course must ordinarily make a written demand for payment within 30 days from receiving information from the bank that the cheque was returned unpaid.
The notice should identify the cheque, the dishonour and the amount claimed, and should demand payment of the cheque amount. Keep evidence showing when and how the notice was sent and delivered.
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After the drawer receives the statutory notice, the drawer has 15 days from receipt of the notice to make payment of the cheque amount.
If payment is made within that statutory period, the basis for prosecution under Section 138 on that dishonour ordinarily does not arise.
Step 4: Cause of Action Arises
If the drawer does not make payment within 15 days after receiving the notice, the cause of action for filing the Section 138 complaint may arise.
The dates should be calculated using the actual notice-delivery information rather than simply counting from the date printed on the notice.
Step 5: File the Complaint Before the Appropriate Court
Under Section 142 of the Negotiable Instruments Act, the complaint is generally required to be made within one month from the date on which the cause of action arises.
The appropriate court and territorial jurisdiction depend on the circumstances in which the cheque was presented and the statutory jurisdiction rules. Do not assume that the case can automatically be filed wherever the complainant resides.
Important Documents to Preserve
- Original cheque
- Bank return memo / dishonour memo
- Copy of the statutory demand notice
- Postal, courier or other proof of dispatch
- Delivery or tracking proof
- Relevant bank account records
- Invoices, agreements, loan records or other documents showing the underlying debt or liability
- Messages, emails or written acknowledgements relating to payment
Section 138 Timeline
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Send statutory demand notice within 30 days
↓
Drawer receives notice
↓
Allow 15 days for payment
↓
If unpaid, cause of action may arise
↓
Complaint generally within one month from cause of action
Do not calculate the deadline only from the cheque-bounce date. Different stages are linked to different events, including receipt of information from the bank, receipt of notice by the drawer and accrual of the cause of action.
Common Mistakes to Avoid
- Sending the statutory notice after the applicable deadline
- Calculating the 15-day period from dispatch without checking receipt of the notice
- Failing to preserve proof of notice delivery
- Using incomplete or incorrect cheque details
- Not preserving evidence of the underlying debt or liability
- Missing the complaint-filing limitation period
- Filing before the wrong court without checking jurisdiction
- Assuming every cheque dishonour automatically constitutes a Section 138 offence
Before Filing: Check What You Can Prove
A cheque-bounce case is not only about possessing a bounced cheque. Organise the evidence showing:
- Who issued the cheque
- Why the cheque was issued
- The legally enforceable debt or liability
- Dishonour by the bank
- Timely statutory notice
- Receipt or service of the notice
- Failure to pay within the statutory period
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