Whether you hold a dishonoured cheque or have received a legal notice for one you issued, a cheque bounce case turns first on dates. Section 138 of the Negotiable Instruments Act, 1881 (NI Act) makes dishonour an offence only if strict time limits are met, so the first thing a cheque bounce lawyer does is fix the timeline.
When a bounced cheque becomes an offence
Section 138 applies when a cheque issued for a legally enforceable debt or liability is returned unpaid because the funds are insufficient or it exceeds the arrangement with the bank. Courts have applied it to returns marked ‘account closed’ and ‘payment stopped’ as well. The court presumes that the cheque was issued for a debt (Section 139), and the drawer can rebut that presumption with evidence.
The offence is punishable with imprisonment up to two years, or a fine up to twice the cheque amount, or both. Where the drawer is a company, the persons in charge of its business can also be prosecuted (Section 141).
Legal notice and complaint deadlines
| Step | Time limit | Provision |
|---|---|---|
| Present the cheque to the bank | Within its validity period, currently three months from its date | Section 138, proviso (a) |
| Send the demand notice to the drawer | Within 30 days of receiving the bank's information of dishonour | Section 138, proviso (b) |
| Drawer pays the cheque amount | Within 15 days of receiving the notice | Section 138, proviso (c) |
| File the complaint before the Magistrate | Within one month after the 15 days end | Section 142(1)(b) |
The legal notice should go by registered post or another mode you can prove, and should state the cheque amount accurately. If the drawer does not pay within fifteen days, the complaint is filed with evidence on affidavit. The court may condone a short delay in filing the complaint if there is sufficient cause.
Trial, interim compensation, appeal and settlement
Section 138 cases are tried summarily (Section 143). The court may direct the drawer to pay interim compensation of up to 20% of the cheque amount while the trial is pending (Section 143A). If the drawer is convicted and appeals, the appellate court may order a deposit of at least 20% of the fine or compensation (Section 148).
The offence is compoundable (Section 147), and many cases end in settlement. In Sanjabij Tari v. Kishore S. Borcar (September 2025), the Supreme Court revised its compounding guidelines: no costs if the amount is paid before the defence evidence, costs of 5% of the cheque amount if it is paid after the defence evidence but before judgment, and higher costs at later stages. It also held that no summons before cognizance is required under Section 223 of the BNSS, and asked courts to enable online payment so that cases can settle early.
If you issued the cheque
If you have received a notice for a cheque you issued, reply within the fifteen days where there is a defence: that no enforceable debt existed on the date of presentation, that the cheque was given as security for a liability that never arose, that the amount was already paid, or that the notice or complaint is defective. If the amount is genuinely owed, paying within fifteen days of the notice prevents the offence altogether, and paying early in the case keeps compounding costs low.
A payee can also sue for the money. A civil suit for recovery can run alongside the complaint, and where the court is empowered to hear it, it can be filed as a summary suit under Order 37 of the Code of Civil Procedure, in which the defendant must obtain the court's leave to defend. Business disputes of this kind are covered on our civil and commercial litigation page.
Cheque bounce cases in Raipur and Bilaspur
Under Section 142(2), where the cheque was deposited for collection through an account, the complaint is filed before the Magistrate for the area of the branch where the payee holds that account. A payee who banks at a branch in Raipur or Bilaspur therefore files there, before the Judicial Magistrates at the district court. Appeals lie to the Sessions Court, and revisions and quashing petitions go to the High Court at Bilaspur.
- The original cheque and the bank's return memo
- A copy of the notice, with postal receipts and proof of delivery
- The agreement, invoices, ledger or messages that show the debt
- Your bank statement showing the cheque's presentation
- Any reply received from the drawer
For advice on a dishonoured cheque or a notice you have received, you can get in touch with the firm at Raipur or Bilaspur.
What the practice handles
- Legal notices under Section 138 of the NI Act
- Replies to cheque bounce notices
- Complaints for payees and holders in due course
- Defence of drawers, directors and partners
- Complaints involving company cheques under Section 141
- Interim compensation applications under Section 143A
- Compounding and settlement, including before Lok Adalats
- Appeals, and deposit applications under Section 148
- Revisions and quashing petitions in the High Court
- Summary suits under Order 37 CPC and money recovery suits
Where these matters are heard
- Judicial Magistrates at Raipur, Bilaspur and other districts
- Sessions Courts, in appeal
- Civil courts, for recovery suits
- Lok Adalats, for settlement
- High Court of Chhattisgarh, Bilaspur
Questions about Cheque Bounce Cases
What is the time limit to send a legal notice for a bounced cheque?
The demand notice must be sent within thirty days of receiving the bank's information that the cheque was returned unpaid. The drawer then has fifteen days from receiving the notice to pay. If payment is not made, the complaint must be filed within one month after those fifteen days end, under Section 142 of the NI Act, although the court can condone delay for sufficient cause.
What is the punishment under Section 138 of the NI Act?
A person convicted under Section 138 can be sentenced to imprisonment for up to two years, or a fine of up to twice the cheque amount, or both. Courts often direct that compensation be paid to the complainant out of the fine. The offence is compoundable, so the case can end at any stage if the parties settle and the court permits compounding.
Where should a cheque bounce case be filed?
Under Section 142(2) of the NI Act, if the cheque was deposited for collection through an account, the complaint is filed before the Magistrate with jurisdiction over the branch where the payee maintains that account. If it was presented otherwise, the case lies where the drawer's branch is. A payee who banks at a branch in Raipur or Bilaspur therefore files the complaint there.
Can I get part of the money while the case is pending?
Yes. Under Section 143A of the NI Act, the trial court may order the drawer to pay interim compensation of up to 20% of the cheque amount, usually within sixty days of the order. If the drawer is later acquitted, the court directs the complainant to repay it with interest. On appeal against a conviction, the appellate court may require a deposit of at least 20% of the fine or compensation.
What if I issued the cheque only as security?
A cheque given as security can still lead to a Section 138 case if a legally enforceable debt existed when it was presented. The defence usually rests on showing that no such debt was due on that date, for example because the liability never arose or had already been paid. The court presumes the cheque was for a debt, so the drawer has to bring evidence to rebut that presumption.
Can a cheque bounce case be settled?
Yes. The offence is compoundable under Section 147 of the NI Act. Under the guidelines in Sanjabij Tari v. Kishore S. Borcar (2025), no costs are imposed if the amount is paid before the defence evidence, costs of 5% of the cheque amount apply if it is paid after the defence evidence but before judgment, and higher costs apply at later stages. Many cases also settle in Lok Adalat or mediation.
Can I file a civil suit as well as the criminal case?
Yes. The criminal complaint and a civil suit for recovery are separate remedies and can run together. Where the court is empowered to hear it, the suit can be filed as a summary suit under Order 37 of the Code of Civil Procedure, in which the defendant must obtain the court's leave to defend. A money suit must generally be filed within three years.
A question that is not answered here? Send it to the firm.
This page describes the law in general terms as of 24 September 2026. It is not legal advice. The outcome of any matter depends on its facts, and the firm does not guarantee results.
