In India, cheque bounce cases are dealt with under Section 138 of the Negotiable Instruments Act, 1881. This law makes dishonour of a cheque a crimina

How to File a Cheque Bounce Case in India

Cheques are one of the most widely used methods of payment in India. Whether it is for business transactions, loan repayments, or personal dealings, cheques are considered safe and reliable. However, when a cheque gets dishonoured (bounced) due to insufficient funds, signature mismatch, or other reasons, it causes financial and legal problems for the payee (the person receiving the money).

In India, cheque bounce cases are dealt with under Section 138 of the Negotiable Instruments Act, 1881. This law makes dishonour of a cheque a criminal offence if the cheque was issued to discharge a legally enforceable debt or liability.

In this article, we will explain step by step how to file a cheque bounce case in India, along with timelines, procedures, and legal remedies.

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What is a Cheque Bounce?

A cheque bounce happens when the bank refuses to honour a cheque due to reasons such as:

• Insufficient funds in the drawer’s account.

• Signature mismatch.

• Overwriting or alterations on the cheque.

• Account closed or frozen.

• Exceeding the arrangement or stop-payment instructions.

When this happens, the bank returns the cheque to the payee with a Cheque Return Memo mentioning the reason for dishonour.

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Legal Provisions for Cheque Bounce

• Section 138 of the Negotiable Instruments Act, 1881 makes cheque bounce due to insufficient funds or similar reasons a criminal offence.

• Punishment: Imprisonment up to 2 years or fine up to twice the cheque amount, or both.

• Section 142: Only the payee or holder in due course can file a complaint.

• Section 143: Provides for summary trials to speed up the process.

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Step-by-Step Process to File a Cheque Bounce Case in India

Step 1: Present the Cheque Within Validity

• The cheque must be presented to the bank within 3 months from the date mentioned on it.

• If it is returned unpaid, collect the Cheque Return Memo from the bank.

Step 2: Send a Legal Notice

• The payee must send a legal notice to the drawer (person who issued the cheque) within 30 days of receiving the return memo.

• The notice must mention:

  • Details of the cheque (date, amount, bank details).

  • Reason for dishonour.

  • Demand for payment within 15 days of receipt of notice.

Step 3: Wait for 15 Days

• If the drawer makes payment within 15 days, the matter ends.

• If not, the payee can proceed with filing a case.

Step 4: File a Complaint in Court

• The complaint must be filed within 30 days after the 15-day notice period ends.

• File the case in the Magistrate Court where:

  • The cheque was presented, or

  • The payee’s bank is located, or

  • The place where the cheque was issued.

Step 5: Court Proceedings

1. Preliminary Hearing – Court checks documents like the cheque, return memo, and legal notice.

2. Summons to Accused – Court issues summons to the drawer.

3. Plea of Accused – The accused can plead guilty or contest the case.

4. Trial – Both parties present evidence and witnesses.

5. Judgment – If guilty, the court may impose imprisonment, fine, or both.

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Timelines in Cheque Bounce Cases

• Present cheque: within 3 months.

• Send legal notice: within 30 days of dishonour.

• Payment time for drawer: 15 days.

• File complaint: within 30 days after 15-day period.

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Remedies Available to Payee

• Criminal punishment under Section 138 NI Act.

• Compensation or recovery of cheque amount.

• Civil remedy: A separate civil suit for recovery can also be filed to claim money.

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Tips to Avoid Cheque Bounce Cases

• Always maintain sufficient funds in your account.

• Do not issue post-dated cheques without proper balance planning.

• Keep copies of all cheques issued/received.

• Respond to legal notices on time to avoid criminal liability.

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Conclusion

A cheque bounce case is a serious legal matter in India. If a cheque you issued has bounced, you may face criminal prosecution as well as financial penalties. If you are the payee and the cheque has bounced, it is important to follow the proper legal procedure under the Negotiable Instruments Act, 1881—present the cheque, issue a legal notice, wait for the response, and if unpaid, file a case in court within the stipulated timeline.

By taking timely action and keeping proper records, you can effectively protect your legal and financial rights.

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Related Blog Post Titles

1. Section 138 of the Negotiable Instruments Act Explained in Simple Terms

2. Legal Remedies for Cheque Bounce in India: Civil and Criminal Options

3. How to Draft a Legal Notice for Cheque Bounce

4. Top Defenses Available in Cheque Bounce Cases

5. Cheque Bounce Case Timeline: How Long Does It Take in Court?