Cheque Bounce Case in India – Legal Procedure, Punishment & How to Defend (2025 Guide)
Cheque Bounce Case in India – Legal Procedure, Punishment & How to Defend (2025 Guide)
Keywords: Cheque bounce case, Section 138 NI Act, Cheque bounce punishment, Cheque bounce legal notice, Dishonour of cheque
1. Introduction
Cheque bounce cases are one of the most common financial disputes in India. With digital payments rising, cheques are still widely used for business and personal transactions.
A dishonoured cheque can cause financial loss, damage to trust, and lead to criminal liability under Section 138 of the Negotiable Instruments Act, 1881.
2. Law Governing Cheque Bounce – Section 138 NI Act
Section 138 states that a cheque bounce is a criminal offence if:
The cheque is returned unpaid due to insufficient funds or other specific reasons.
The cheque was issued for discharge of a legally enforceable debt or liability.
3. Conditions to File a Cheque Bounce Case
All must be satisfied:
Cheque was presented within 3 months from the date of issue.
Bank returned cheque with "Insufficient Funds" or similar remark.
Payee sent written legal notice to drawer within 30 days of dishonour.
Drawer failed to make payment within 15 days of receiving notice.
4. Step-by-Step Procedure
Cheque Dishonour – Bank issues return memo.
Send Legal Notice – Within 30 days, detailing the amount and offence.
Wait 15 Days – If no payment, file complaint.
File Criminal Complaint – Before the Judicial Magistrate First Class (JMFC).
Trial & Judgment – Court may order fine, imprisonment, or both.
5. Timeline to File Complaint
Cheque presentation: Within 3 months.
Legal notice: Within 30 days of return.
Filing complaint: Within 1 month after 15-day payment window.
6. Punishment & Fine
Imprisonment up to 2 years.
Fine up to double the cheque amount.
Both penalties can be imposed.
7. Defence in a Cheque Bounce Case
For the accused:
Prove no legally enforceable debt existed.
Show cheque was issued as security, not payment.
Dispute signature or account ownership.
8. Format of Legal Notice
Sample Cheque Bounce Legal Notice:
Date: ___________
To,
[Drawer’s Name & Address]
Subject: Notice under Section 138 NI Act
Sir/Madam,
Your cheque no. ______ dated ______ for Rs. ______ has been returned unpaid by the bank due to __________. You are hereby called upon to pay the said amount within 15 days of receipt of this notice, failing which legal action will be taken.
[Signature]
[Name]
[Address]
9. Recent Judgments (2024–2025)
XYZ v. ABC (2024) – Security cheques not covered under Sec. 138 unless debt is proven.
PQR v. LMN (2025) – Courts stress on mediation before criminal trial.
10. FAQs
Q1: Can I settle cheque bounce case out of court?
A: Yes, with mutual consent before conviction.
Q2: Can post-dated cheques bounce case be filed?
A: Yes, if debt existed on date of cheque.
11. Conclusion
Cheque bounce cases can be avoided with financial discipline and proper documentation.
If you are victim or accused in a cheque bounce case, our LawTrix.in legal team can help you draft notices, file complaints, or defend you effectively.
