A bounced cheque is not just a financial inconvenience — it is a criminal offence under Indian law. If someone has given you a cheque that bounced, here is what you can do.
What is Cheque Bounce?
A cheque “bounces” when the bank returns it unpaid — usually because the account has insufficient funds. Under Section 138 of the Negotiable Instruments Act, 1881, issuing a bounced cheque is a criminal offence punishable by imprisonment up to two years and/or a fine up to twice the cheque amount.
Steps to Take Legal Action
- Receive the bank memo — get the dishonour memo from your bank explaining why the cheque bounced
- Send a legal notice — within 30 days of receiving the dishonour memo, send a legal notice to the cheque issuer demanding payment within 15 days
- Wait for the 15-day period — if the issuer does not pay within 15 days of receiving your notice, you can file a complaint
- File a criminal complaint — file the complaint in the Magistrate’s court within 30 days of the 15-day period ending
What Can You Recover?
The court can order the accused to pay you the cheque amount along with compensation. In serious cases, the accused may also face imprisonment.
Time Limits Are Strict
Missing any of these deadlines — the 30-day notice period or the filing deadline — can result in your complaint being rejected. Consult an advocate immediately after the cheque bounces.
GuruLegal handles cheque bounce cases under Section 138 NI Act. Contact us to take action today.