Cheque bounced: demand notice and Section 138 complaint

Banthry Prep. General information, not legal advice. Fill the blanks, remove what does not apply, and have a lawyer check the

final text where you can. References are to the Negotiable Instruments Act, 1881 (NI Act).

The clock (count carefully; these dates decide the case)

Step	Deadline	Where it comes from
Present the cheque to the bank	Within three months of the date on the cheque	RBI circular RBI/2011-12/251 (from 1 April 2012); NI Act s.138 proviso (a): six months or the cheque's validity, whichever is earlier
Send the written demand notice to the drawer	Within 30 days of receiving the bank's information that the cheque was returned (the return memo)	s.138 proviso (b)
Drawer pays the full amount	Within 15 days of receiving the notice. If the full amount is paid in time, no s.138 case arises	s.138 proviso (c)
File the complaint before the Magistrate	Within one month after those 15 days end. A late complaint needs an application showing sufficient cause	s.142(1)(b) and proviso

Which court. If you deposited the cheque through your own account, the court where the branch of your bank that holds your

account is situated (s.142(2)(a) and Explanation, inserted in 2015). The court must not be inferior to a Metropolitan Magistrate or a

Judicial Magistrate of the first class (s.142(1)(c)).

What the law covers. The cheque must have been given for a debt or other legally enforceable liability, and returned because the

account had too little money or the amount exceeded the arrangement with the bank (s.138 and Explanation). Punishment: imprisonment

up to two years, or fine up to twice the cheque amount, or both. The offence is compoundable (s.147). The court may order the drawer

to pay interim compensation of up to 20 per cent of the cheque amount during the trial (s.143A); it is refundable if the drawer is

acquitted.

Keep: the original cheque, the bank's return memo, the notice, the postal receipt and tracking (or courier proof), any reply, and

proof of the debt (agreement, invoice, bank transfers, messages).

The Act only requires the notice to be "in writing". Registered Post AD or Speed Post is the common, provable way to send it; also

email or WhatsApp it if you have the drawer's details, and keep proof of each.

To,

[Drawer's name], [Address]

Date: [DD/MM/YYYY]

Subject: Notice under Section 138 of the Negotiable Instruments Act, 1881: dishonour of cheque no. [ ] dated [ ] for Rs [ ]

You issued cheque no. [ ] dated [ ] for Rs [amount] drawn on [bank, branch] in my favour, towards [describe the debt or liability: loan given on [date] / goods supplied under invoice [ ] / rent for [months] / other].
I presented the cheque through my account at [my bank, branch] on [date]. It was returned unpaid with the remark "[funds insufficient / exceeds arrangement / other]" by memo dated [date], which I received on [date].
I call upon you to pay Rs [amount], the amount of the cheque, within fifteen days of receiving this notice, by [bank transfer to account no. / demand draft / other].
If you do not pay within fifteen days, I will file a complaint against you under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881, at your risk as to costs and consequences.

[Signature]

[Name], [Address], [Phone]

File within one month after the 15-day period ends. Practice differs between courts (number of copies, court fee, a pre-summoning

affidavit). Check at the court's filing counter.

IN THE COURT OF THE [METROPOLITAN MAGISTRATE / JUDICIAL MAGISTRATE FIRST CLASS], [PLACE]

[Your name], [Address] ... Complainant

versus

[Drawer's name], [Address] ... Accused

COMPLAINT UNDER SECTION 138 READ WITH SECTION 142 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881

Debt or liability. [How the money became due: date, amount, documents.]
The cheque. The accused issued cheque no. [ ] dated [ ] for Rs [ ] on [bank, branch] to discharge that liability.
Dishonour. The complainant presented it through [bank, branch] on [date], within its validity. It was returned unpaid, "[reason]", by memo dated [date], received on [date].
Notice. The complainant sent a written demand notice on [date] by [mode], within 30 days of receiving the bank's information. It was delivered on [date] [or: returned "refused / unclaimed" on [date]]. Postal receipt and tracking are attached.
Failure to pay. The accused did not pay the amount within 15 days of receiving the notice. The cause of action arose on [date].
Limitation. This complaint is filed within one month of that date. [If late: an application for condonation of delay is filed with it.]
Jurisdiction. The cheque was delivered for collection through the complainant's account at [branch], which is within this Court's local jurisdiction (s.142(2)(a)).
Prayer. Take cognizance of the offence under Section 138, summon the accused, try and punish the accused according to law, direct payment of compensation, and order interim compensation under Section 143A.

Place: [ ] Date: [ ]

[Signature of complainant]

Attach: original cheque; bank return memo; copy of the notice; postal receipt and tracking or delivery proof; any reply;

proof of the debt; the complainant's affidavit of evidence (s.145 allows evidence on affidavit).

I, [Name], [age], resident of [Address], state on oath:

I am the complainant and know the facts.
The facts in paragraphs 1 to 8 of the complaint are true to my knowledge, and the attached documents are true copies of the originals.

Deponent: [Signature]

Verification: Verified at [place] on [date] that the contents above are true and correct to my knowledge, and nothing material is

concealed.

Sources: Negotiable Instruments Act, 1881, ss.138, 142, 143, 143A, 145, 147; Negotiable Instruments (Amendment) Act, 2015;

Negotiable Instruments (Amendment) Act, 2018; RBI circular RBI/2011-12/251 (4 November 2011); Supreme Court, In Re: Expeditious Trial

of Cases under Section 138 of N.I. Act, 1881, judgment of 16 April 2021.

Banthry Prep · banthry.in · General information, not legal advice.