Cheque bounced? Steps and deadlines under Section 138
When a cheque given to pay a debt bounces (for example for “funds insufficient”), send the drawer a written demand notice within 30 days of receiving the bank’s return memo. If they don’t pay within 15 days of receiving the notice, you can file a complaint under Section 138 of the Negotiable Instruments Act within one month after those 15 days end. Keep the original cheque, the return memo and proof of sending the notice, and speak to a lawyer.
The timeline
| Step | Deadline |
|---|---|
| Present the cheque | Within its validity: 3 months from the date on the cheque |
| Bank returns it with a memo | Collect the return memo and the original cheque |
| Send a demand notice | Within 30 days of getting the return memo |
| Drawer can pay | 15 days from receiving your notice |
| File the complaint | Within 1 month after those 15 days end |
The complaint is usually filed in the court where your bank branch (where you deposited the cheque) is located.
Papers to keep
- The original bounced cheque and the bank’s return memo.
- The invoice, ledger or agreement showing the money was owed.
- A copy of the demand notice and proof of sending it (speed post receipt and tracking, plus email or WhatsApp if you used them).
- Any messages where they promised to pay.
What the law provides
Section 138 is a criminal offence: the court can order imprisonment of up to two years, a fine of up to twice the cheque amount, or both. Under Section 143A the court can also order the drawer to pay interim compensation of up to 20% of the cheque amount while the case runs. Many cases settle once a notice is sent. Rules as of October 2026; your lawyer will advise on your facts.
Keep others informed
You can record the bounced cheque on REFFNET as a dispute (issue type “Cheque bounce / Failed settlement”) with the return memo as proof. The business can reply, and once you settle, both sides can mark it resolved. If the buyer simply hasn’t paid, see what to do when a buyer doesn’t pay.
Questions people ask
Can I deposit the bounced cheque again?
Yes, as long as it is still within its 3-month validity. The 30-day notice period then runs from the return memo you act on; ask your lawyer which one to use.
Can I send the notice on WhatsApp or email?
Send it by speed post or registered post with tracking, and also by email or WhatsApp if you have them. Proof of delivery is what matters.
Does Section 138 apply to a security cheque?
It can, if a debt was actually due when the cheque was presented. Courts look at the facts of each case, so talk to a lawyer.