Introduction to Cheque Dishonour and Bank Cheque Bounce Cases
In today’s fast-paced financial world, cheques continue to play a vital role in business and personal transactions. However, when a cheque is returned unpaid due to insufficient funds or signature mismatch, it leads to a cheque dishonour (bounce) case under Section 138 of the Negotiable Instruments Act, 1881.
If you’ve issued or received a cheque that has bounced , it’s important to know your legal rights, procedure, and time limits. This guide by LSO Legal explains the step-by-step process, legal notice format, punishment under Section 138, and how our expert advocates,can help you file or defend a cheque bounce case effectively.
Why You Need a Legal Expert for Cheque Bounce Cases
A cheque bounce case is a criminal offence, not a civil dispute. It can result in imprisonment up to 2 years or fine up to twice the cheque amount.
Hiring a qualified advocate ensures:
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Correct drafting and delivery of the legal notice within the statutory time limit.
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Proper filing of complaint under Section 138 of the NI Act.
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Guidance for defence or settlement if you are the accused.
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Effective representation before the Judicial Magistrate, First Class (JMFC) .
People Also Read: Cheque Bounce Lawyer in Bhopal – Section 138 Legal Experts
Common Reasons for Cheque Dishonour
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Insufficient funds in the account
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Signature mismatch
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Account closed or dormant
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Post-dated cheque presented early
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Altered or overwritten cheque
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Stop-payment instructions issued
Regardless of the reason, once the cheque is returned unpaid, it triggers a legal process defined strictly by law.
Understanding Section 138 of the Negotiable Instruments Act
Under Section 138 of the NI Act, a person commits an offence if:
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A cheque is issued towards a legally enforceable debt or liability.
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The cheque is returned unpaid by the bank due to insufficient funds or other reasons.
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The payee issues a legal notice within 30 days from the date of cheque return memo.
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The drawer fails to make payment within 15 days of receiving the notice.
If payment is not made even after this period, a criminal complaint can be filed within 30 days before the Magistrate’s Court.
Step-by-Step Process for Cheque Bounce Cases
1. Issuance of Cheque
The drawer issues a cheque for payment of goods, services, loan, or liability.
2. Cheque Dishonour by Bank
When the payee presents the cheque, the bank returns it unpaid with a memo stating the reason for dishonour.
3. Sending a Legal Notice
Within 30 days, the payee must send a legal notice to the drawer demanding payment of the cheque amount within 15 days.
This notice must include cheque details, reason for dishonour, and the amount due.
4. Non-Payment Within 15 Days
If the drawer does not make the payment within 15 days from receipt of the notice, the payee becomes eligible to file a case.
5. Filing of Complaint in Court
The complainant files a written complaint under Section 138 before the Judicial Magistrate First Class (JMFC), along with original cheque, bank memo, copy of notice, and postal receipts.
6. Court Proceedings
The accused receives a summons. Both parties present evidence and witnesses.
The court may direct mediation or settlement if both sides agree.
7. Final Judgment
If found guilty, the accused may face fine up to twice the cheque amount or imprisonment up to 2 years, or both.
People Also Read: Legal Notice for Cheque Bounce – Format and Time Limit
Documents Required to File a Cheque Bounce Case
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Original bounced cheque
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Bank return memo mentioning the reason for dishonour
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Copy of legal notice sent to the drawer
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Proof of notice delivery (postal receipt, acknowledgment)
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Copy of invoice, loan agreement, or transaction proof
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Identity proof of complainant
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Authorization letter (if filing through a legal representative)
Time Limit for Cheque Bounce Case
| Stage | Time Limit |
|---|---|
| Legal notice to drawer | Within 30 days from cheque return |
| Payment period for drawer | 15 days from notice receipt |
| Complaint filing in court | Within 30 days after 15-day period expires |
Missing any of these deadlines can lead to rejection of the case. LSO Legal ensures every step meets the statutory time frame.
Punishment for Cheque Bounce under Section 138
| Type | Punishment / Penalty |
|---|---|
| Criminal Liability | Imprisonment up to 2 years or fine up to twice the cheque amount, or both |
| Civil Recovery | Recovery of cheque amount plus interest through civil suit |
| Compoundable Offence | Settlement and withdrawal possible under Section 147 NI Act |
People Also Read: Cheque Bounce Lawyers and Legal Advisors in Bhopal
Bank Cheque Bounce Cases – Special Situations
Cheque dishonour involving bank loans or EMIs follows the same Section 138 procedure.
LSO Legal’s advocates handle cases such as:
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EMI cheque bounce in personal loan or home loan
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Credit card cheque dishonour
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Security cheque misuse by bank or agent
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Settlement negotiation and compromise drafting
How LSO Legal Assists in Cheque Bounce Cases
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Drafting and sending Legal Notice within 24 hours
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Preparing and filing Section 138 Complaint court
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Handling bank-related dishonour and loan cheque disputes
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Representing clients during trial and mediation
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Negotiating settlements and compoundable agreements
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Assisting accused persons in bail and defence cases
People Also Read: Cheque Bounce Lawyers in India – Book Consultation
Common Mistakes to Avoid
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Sending notice after 30-day limit
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Incorrect cheque or account details in notice
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Not keeping bank memo and postal proof
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Ignoring summons or missing hearings
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Filing without proof of legal debt
Need Legal Help for Cheque Bounce Cases?
Whether you are the payee (complainant) or the drawer (accused), LSO Legal provides professional assistance in cheque bounce, bank dishonour, and notice drafting.
Our experienced civil and criminal advocates, handle every step — from notice preparation to court representation — ensuring compliance with all NI Act timelines.
Helpline: 0755-4222969 | +91-9171052281
WhatsApp: +91-8109631969
Website: https://lsolegal.com
Email: support@lsolegal.com
Office Address:
Flat No. 205, C1 Block, Swami Vivekanand Parisar, Katara Hills, Bhopal – 462043
Service Area: Pan India
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Frequently Asked Questions (FAQ) – Cheque Bounce Legal Notice & Cases
1. What is the time limit to send a legal notice for cheque bounce?
You must send the notice within 30 days from the date of receiving the cheque return memo from the bank.
2. What happens if the drawer does not pay within 15 days of notice?
You can file a criminal complaint under Section 138 before the Judicial Magistrate within 30 days after the 15-day period expires.
3. Can cheque bounce cases be settled out of court?
Yes. Cheque bounce is a compoundable offence. Both parties can mutually settle the matter at any stage before conviction.
4. What is the punishment for cheque bounce?
Imprisonment up to 2 years, or fine up to twice the cheque amount, or both.
5. Can a legal notice be sent by email or WhatsApp?
Yes. As per recent judgments, email or WhatsApp delivery with proof of receipt is valid if the message is acknowledged.
6. Can I file a case if the cheque was given for a loan or bank EMI?
Yes. Any dishonoured cheque issued for a legally enforceable debt (loan, EMI, or business transaction) is covered under Section 138.
7. What if the cheque was given as security?
If the cheque was presented without an actual liability, the accused can use it as a defence during the trial. The court will decide based on evidence.
