Section 138 NI Act Cheque Bounce Notice

What is a Section 138 Cheque Bounce Notice?

A cheque bounce notice is the formal demand notice you must send to a person or company whose cheque has been dishonoured, before you can file a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881. Under Indian law, a dishonoured cheque (for insufficiency of funds, a stopped payment, or a signature mismatch) is treated as an offence that is punishable with imprisonment for up to two years, a fine of up to twice the cheque amount, or both. However, the statute makes a valid notice an absolute pre-condition.

When the bank returns the cheque with a dishonour memo, you have 30 days from the date of the bank's return memo to give written notice to the drawer demanding payment. The drawer then gets 15 days from receipt of that notice to pay. Only if the amount is not paid within those 15 days can you file a complaint with the magistrate's court within the following 30 days. Getting this sequence right is essential, because a defective or late notice can defeat an otherwise strong claim.

Key Clauses / What's Included

Our Section 138 notice is drafted to satisfy every requirement of the NI Act so that your complaint survives scrutiny. It includes:

• Party details of the payee, the drawer, and both bank accounts, with exact cheque particulars.
• The cheque number, date, amount, and payee as shown on the instrument.
• A clear statement that the cheque was presented for payment and dishonoured, quoting the bank's return memo reason.
• The underlying debt or liability that the cheque was issued to discharge, proving lawful consideration.
• A clear and unequivocal demand for payment within 15 days of receipt of notice.
• The legal consequences if payment is not made, including the intent to file a complaint under Section 138 and other provisions.
• Wording that covers dishonour by insufficiency of funds and builds the evidence you need for court.

Who Needs This / When to Use

Send this notice if you hold a cheque that has been dishonoured and you want to recover the amount through law. It applies whether the drawer is an individual, a firm, a company, or a partnership. Typical situations include a bounced loan repayment cheque, a post-dated cheque given for goods or services, a salary or settlement cheque that failed, or an investment repayment that bounced. Even if the drawer has paid you back verbally, documenting your demand is wise because the notice also reduces the limitation risk and starts the statutory clock. Do not delay: the notice must reach the drawer within 30 days of the dishonour memo, so act the moment the bank returns the cheque.

How We Draft It / Process

You do not need a physical appointment. Share the dishonour memo, cheque image, bank statement, and the contract or invoice that establishes the debt. Our legal drafting team prepares a clear, court-ready notice and sends you a ready-to-serve PDF within one working day. We explain how and where to send it (by registered post with acknowledgement due and by email), and we include drafting guidance for your own use.

FAQ

Q: What happens if the drawer pays after receiving my notice?

A: If the amount is paid within 15 days of receipt of the notice, the matter is settled and no Section 138 complaint can be filed. The notice has served its purpose of recovering your money.

Q: What if I miss the 30-day window to send the notice?

A: The notice must be served within 30 days of the date of the bank's dishonour memo. If you miss it, the notice becomes defective and is a ground on which the drawer can oppose a complaint. Contact our team immediately if you are close to the deadline.

Q: Is a bounced cheque notice valid if the amount is small?

A: Yes. Section 138 applies regardless of the amount, subject to the minimum legal requirements. A professionally drawn notice ensures your smaller claim is still presented clearly and correctly.