Cheque bounce (Section 138)
Added Last checked against India Code
When a cheque given for a debt is returned unpaid for lack of funds, it can be a criminal offence under Section 138 of the Negotiable Instruments Act, 1881, if the notice steps are followed.
- Notice
- Within 30 days of the bank memo
- Time to pay
- 15 days from receiving notice
- Complaint
- Within 1 month after that
- Punishment
- Up to 2 years, fine up to twice the amount, or both
What brings you here?
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A cheque given to me bounced
Keep the cheque and the bank's return memo. The 30-day clock for the notice starts when the bank tells you.
I have received a cheque bounce notice
You have 15 days from receiving the notice to pay. Paying within that time means no offence is made out. If you dispute the debt, reply in writing.
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What it means
A cheque "bounces" when the bank returns it unpaid. Under Section 138 of the Negotiable Instruments Act, 1881, this is an offence by the person who wrote the cheque (the drawer) if the cheque was given for a debt or liability and was returned because the account did not have enough money, or the amount exceeded what the account allows.
The offence is only complete after a written demand. The payee must send a notice within thirty days of being told by the bank that the cheque was returned. The drawer then has fifteen days from receiving the notice to pay.
If payment is not made, the payee can file a complaint before the Magistrate within one month of the fifteen days running out. The punishment can be imprisonment of up to two years, a fine of up to twice the cheque amount, or both.
The law
| Current provision | Replaced |
|---|---|
| Section 138, Negotiable Instruments Act, 1881Dishonour of cheque for insufficiency, etc., of funds in the account | Still in force; not renumbered |
| Section 142, Negotiable Instruments Act, 1881Cognizance of offences (time limit and court) | Still in force; not renumbered |
| Section 139, Negotiable Instruments Act, 1881Presumption in favour of holder | Still in force; not renumbered |
When it matters
- A cheque you received for a loan, rent, salary or a sale comes back with a return memo saying "funds insufficient" or "exceeds arrangement".
- You issued a cheque and have received a legal notice demanding payment.
- You are deciding between a criminal complaint under Section 138 and a civil suit for recovery. Both can run together.
Example
A supplier receives a cheque for Rs 2,00,000 that is returned for insufficient funds on 3 March. He sends a notice on 20 March, which the buyer receives on 23 March. The buyer has until 7 April to pay. If he does not, the supplier can file the complaint up to 7 May.
Watch out for
- The three time limits are strict. A notice sent after thirty days, or a complaint filed late without the court condoning the delay, can end the case.
- The court presumes the cheque was given for a debt (Section 139). The drawer can rebut this, so keep the invoices, agreements or messages that show the debt.
- The complaint is filed where the payee's bank branch is, following the 2015 amendment to Section 142.
Cheque bounced?
A lawyer can send the notice and file the complaint within the deadlines.
Got a notice?
Talk to a lawyer before the 15 days run out.
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Last checked against the official text on India Code on 6 Nov 2026. This is general information on Indian law, not legal advice for your situation. Laws and court rulings change; a lawyer can tell you how they apply to your facts.