A cheque bounce — also called dishonour of cheque — occurs when a bank refuses to process a cheque due to insufficient funds, a closed account, or other reasons. In India, this is a criminal offence under Section 138 of the Negotiable Instruments Act, 1881.
Is Cheque Bounce a Criminal Offence?
Yes. Unlike many financial disputes which are civil matters, cheque bounce is a criminal offence. The accused can face up to 2 years imprisonment, a fine of up to twice the cheque amount, or both. This makes it one of the most powerful legal remedies for recovering money in India.
Key point: The cheque must have been issued for a legally enforceable debt or liability. Post-dated cheques, security cheques, and gift cheques may be treated differently by courts.
Documents Required
- Original dishonoured cheque
- Bank return memo (cheque return memo)
- Copy of the legal notice sent to the drawer
- Proof of delivery of legal notice (postal receipt, courier tracking)
- Any agreement or document showing the underlying debt
- Bank statement showing the cheque was presented
Jurisdiction — Which Court to File In?
You can file in the court having jurisdiction over the place where the cheque was presented for payment — i.e., the location of your bank branch. The Supreme Court clarified this in Dashrath Rupsingh Rathod v. State of Maharashtra (2014).
Court Fees
Filing a cheque bounce complaint is relatively inexpensive. Court fees typically range from ₹200 to ₹500 depending on the state. Advocate fees are separate and vary by the complexity of the case and city.
Timeline
While courts aim to resolve cheque bounce cases within 6 months, in practice it often takes 1–3 years in high-volume courts like Delhi and Mumbai. Cases can be expedited if the accused settles the amount during the proceedings.
Can I File Both a Civil and Criminal Case?
Yes. You can simultaneously file a criminal case under Section 138 NI Act and a civil suit for recovery of the amount. Many lawyers recommend filing both to maximise pressure on the defaulter.
Step-by-Step Process
Present the Cheque and Get It Dishonoured
Present the cheque to your bank within 3 months of the cheque date. Obtain a "Cheque Return Memo" from the bank stating the reason for dishonour (insufficient funds, signature mismatch, etc.).
Send a Legal Notice Within 30 Days
Send a written legal notice to the drawer within 30 days of receiving the cheque return memo. The notice must demand payment of the cheque amount within 15 days. Send via registered post with acknowledgement due.
Wait for 15 Days
Give the drawer 15 days from receipt of the legal notice to make the payment. If they pay, the matter is settled. If they ignore or refuse, you can proceed to court.
File a Complaint in the Magistrate Court
File a complaint under Section 138 of the Negotiable Instruments Act in the Judicial Magistrate First Class court. The complaint must be filed within 30 days of the expiry of the 15-day notice period. You can file in the court having jurisdiction over the bank branch where the cheque was presented.
Attend Court Hearings
The court will issue a summons to the accused. Attend all hearings with your advocate. Present the cheque, bank return memo, legal notice, and proof of delivery as evidence.
Await Judgment
If found guilty, the accused can face imprisonment up to 2 years, or a fine up to twice the cheque amount, or both. Most cases settle during the proceedings.