A cheque given to you has bounced
A cheque you received was returned unpaid. There is a strict, time-bound legal process to recover your money under Section 138.
When a cheque bounces (e.g. 'insufficient funds'), Section 138 of the Negotiable Instruments Act, 1881 makes it a criminal offence by the person who gave the cheque. But the remedy is strictly time-bound — miss a deadline and you can lose the right to prosecute. (If it's YOUR cheque that bounced, see the note below.)
First, the immediate do's and don'ts
✅ Do
- Collect the cheque return memo from your bank stating the reason for dishonour.
- Note the exact date on the memo — your deadlines run from it.
- Keep the original bounced cheque safe.
- Send a written legal demand notice to the person within 30 days of the memo.
- Keep proof of posting/delivery of that notice.
🚫 Don't
- Do NOT delay — the 30-day window to send notice is strict.
- Do NOT deposit the cheque repeatedly hoping it clears, and then lose track of dates.
- Do NOT rely only on phone calls — the written notice is legally essential.
- Do NOT threaten the person — recover through the legal process only.
Step by step
Get the bank memo
The 'cheque return memo' is your proof of dishonour. Everything starts from its date.
Send the demand notice (within 30 days)
A written notice demanding payment must be sent within 30 days of the memo, via a lawyer.
Wait 15 days
The other side gets 15 days from receiving the notice to pay.
File the complaint (within 30 days after)
If unpaid, file a complaint before the Magistrate within 30 days after the 15-day period ends.
Pursue the case
You can also seek interim compensation of up to 20% of the cheque amount (s.143A) while the case runs.
Your rights & obligations
- Cheque dishonour for insufficient funds is a punishable offence.Negotiable Instruments Act, 1881 — Section 138
- Punishment can be up to 2 years' imprisonment, or a fine up to twice the cheque amount, or both.NI Act — Section 138
- The court may order interim compensation up to 20% of the cheque amount.NI Act — Section 143A
Key deadlines
- Send the legal demand notice⏱ Within 30 days of the cheque return memo
- Allow the payer to pay⏱ 15 days from notice delivery
- File the complaint in court⏱ Within 30 days after the 15-day period ends
🚨 When to call a lawyer immediately
- The 30-day notice window is about to close.
- The cheque amount is large or business-critical.
- The payer is disputing that they owe you anything.
- It is your own cheque that bounced — you may be the accused; get advice immediately.
Need to speak to a lawyer?
We're building a network of verified advocates you can reach 24/7. For now, contact a local advocate or free legal aid (NALSA helpline 15100).
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