A dishonoured cheque given for a legally enforceable debt is an offence under Section 138 of the Negotiable Instruments Act, but only if strict time limits are met.
The timeline
- Present the cheque within its validity period (three months from the date on the cheque).
- Send a written demand notice within 30 days of receiving the bank's return memo.
- The drawer has 15 days from receiving the notice to pay.
- If unpaid, file the complaint within one month after the 15-day period ends.
Where to file
The complaint is filed before the court within whose jurisdiction the bank branch of the payee, where the cheque was delivered for collection, is situated.
What you need
- Original cheque and return memo
- Copy of the notice and delivery proof
- Proof of the underlying debt (invoice, agreement, ledger)
Punishment
The court can impose imprisonment up to two years, a fine up to twice the cheque amount, or both. Most cases settle once proceedings begin.
This guide explains the general position in India. Fees and rules change; your facts may change the answer. Speak to us before acting on it.