Question 1

What is the time limit to send a cheque bounce notice under Section 138?

Accepted Answer

The payee or holder must send a written demand notice within 30 days of receiving information of the cheque being returned unpaid (i.e., from the date of dishonour/return memo). This is a mandatory prerequisite under Section 138(b) of the Negotiable Instruments Act, 1881.

Question 2

Can I send a cheque bounce notice via email?

Accepted Answer

While the law requires the notice to be sent 'in writing,' it is strongly recommended to send it via Registered Post with Acknowledgement Due (RPAD) or Speed Post. Email alone may not be considered sufficient proof of service in court. For best legal protection, send via RPAD and keep the postal receipt and AD card as evidence.

Question 3

What happens after sending the 15-day demand notice?

Accepted Answer

After sending the notice, the drawer (cheque issuer) has 15 days to make the payment. If the drawer fails to pay within 15 days of receiving the notice, the payee can file a criminal complaint under Section 138 of the NI Act within 30 days of the expiry of the 15-day period (i.e., within 45 days of notice receipt by drawer).

Question 4

What if the cheque bounce notice period of 30 days has expired?

Accepted Answer

If more than 30 days have passed since the date of dishonour and no notice was sent, the right to file a criminal complaint under Section 138 is lost for that particular cheque. However, you can still pursue civil remedies for recovery of the amount. You may also re-present the cheque (if within its validity period) and if it bounces again, the 30-day period restarts from the new date of dishonour.

Question 5

What is the punishment for cheque bounce under Section 138?

Accepted Answer

Under Section 138 of the NI Act, the drawer of the dishonoured cheque can be punished with imprisonment up to 2 years, or a fine up to twice the cheque amount, or both. The court may also award compensation to the complainant under Section 143A (interim compensation up to 20% of cheque amount) and Section 148 (minimum 20% of fine/compensation on appeal).

Question 6

Can a company or firm be prosecuted for cheque bounce?

Accepted Answer

Yes. Under Section 141 of the NI Act, if the offence is committed by a company, every person who was in charge of and responsible for the conduct of the business of the company at the time of the offence shall be deemed guilty. This includes directors, managing directors, partners, and other officers of the company/firm.

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Section 138 NI Act — Legal Reference

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