By Advocate Ganta Surya Kiran | 19 Law Chambers, Visakhapatnam | Banking Law

A bounced cheque is not simply a financial inconvenience — it is a serious criminal offence under Section 138 of the Negotiable Instruments Act, 1881. The person who issued the cheque faces imprisonment up to 2 years, a fine up to twice the cheque amount, or both. However, the law imposes strict deadlines on complainants too. Miss even one deadline and the court will dismiss your case entirely. Advocate Ganta Surya Kiran at 19 Law Chambers sends legal notices the same day you contact us — so you never miss Deadline 1.

Why Do Cheques Bounce? Common Reasons

Cheques bounce for various reasons — some technical, some deliberate. The most common reasons include: insufficient funds in the account, a closed or frozen account, a signature mismatch between the cheque and bank records, differences between the amount written in words and figures, a post-dated cheque presented before the date written on it, a stop payment instruction from the drawer, and a deceased account holder. Importantly, most of these reasons — except purely technical defects — support a valid Section 138 complaint against the drawer.

Three Critical Deadlines — Missing Any One Destroys Your Case

Section 138 is unique among criminal laws because it operates on three consecutive, non-negotiable deadlines. Consequently, understanding and tracking each deadline is as important as the complaint itself.

Deadline 1 — Send Legal Notice Within 30 Days

From the date your bank gives you the cheque return memo — you have exactly 30 days to send a written legal notice to the cheque drawer. This deadline is absolute. Furthermore, courts do not condone delay beyond this period for any reason. The notice must specifically state: the cheque amount, the date of dishonour, and a demand for payment within 15 days.

At 19 Law Chambers — Advocate Ganta Surya Kiran sends the legal notice by Registered Post with Acknowledgement Due (RPAD) on the same day you contact us. Consequently, you never risk losing your case on a deadline.

Deadline 2 — Give the Drawer 15 Days to Pay

After receiving your legal notice, the drawer gets exactly 15 days to pay the full cheque amount. If the drawer pays within this period — no criminal case can be filed. However, if they fail to pay or ignore the notice entirely — your right to file the Magistrate complaint arises immediately.

Deadline 3 — File Magistrate Complaint Within 30 Days

From the date the 15-day payment window closes — you have 30 days to file a complaint before the Judicial Magistrate. Moreover, this deadline is equally strict. Filing even one day late results in the case being time-barred — regardless of how strong your evidence is.

Therefore, as soon as the drawer defaults on the notice — contact us immediately to file the Magistrate complaint before the clock runs out.

How to File Section 138 Complaint — Step by Step

Filing a Section 138 case involves several sequential steps. Furthermore, each step builds on the previous one — making it essential to execute every stage correctly.

Step 1 — Collect All Documents Gather the original dishonoured cheque, the bank return memo, proof of the debt or liability (agreement, invoice, or acknowledgement), and the postal receipt showing you sent the legal notice. Additionally, preserve the Acknowledgement Due card once it returns — this proves the drawer received the notice.

Step 2 — Send Legal Notice Immediately Your advocate sends the legal notice by RPAD to the drawer’s last known address. Importantly, the notice must reach the drawer — or at least be sent to the correct address. Moreover, even if the drawer refuses delivery or claims non-receipt, courts accept a notice sent to the correct address as duly served.

Step 3 — Wait 15 Days After Notice Give the drawer the full 15-day window to pay. However, use this time to prepare all documents for the Magistrate complaint — so you can file immediately if they default.

Step 4 — File Complaint Before Judicial Magistrate File the complaint before the Judicial Magistrate in the area where your bank branch is located — where you presented the cheque for payment. Alternatively, under BNSS 2023, you can also file where you reside. The complaint must include: the original cheque, bank return memo, legal notice copy, postal receipt, and acknowledgement card.

Step 5 — Court Issues Summons to Accused After examining your complaint, the Magistrate issues summons to the accused drawer. Furthermore, if the accused ignores the summons — the court issues a bailable warrant, then a non-bailable warrant, and ultimately can order arrest.

Where Can You File the Section 138 Case?

Jurisdiction is very favourable for complainants in cheque bounce cases. Specifically, you can file the complaint at any of these locations:

• Where the cheque was drawn (drawer’s bank branch location)
• Where you presented the cheque for payment (your bank branch)
• Where you received the cheque return memo
• Where you sent the legal notice
• Where the drawer resides

Consequently, choose the court most convenient for you — particularly if the drawer lives far away.

Defending Against a Section 138 Case — Rights of the Accused

Receiving a cheque bounce notice does not automatically mean you will be convicted. Moreover, several valid legal defences exist that can result in acquittal.

Pay Within 15 Days: The simplest defence is also the most effective — pay the full amount within 15 days of receiving the legal notice. Consequently, the complainant loses the right to file a criminal case entirely.

Cheque Given as Security — Not for Debt: If you gave the cheque as a security deposit or guarantee — and no actual debt or liability existed at the time the cheque was drawn — this is a complete defence. However, you must prove this fact clearly with documentary evidence.

Forged Signature: If your signature on the cheque was forged — file a police complaint immediately and inform the court. Furthermore, a handwriting expert’s report supports this defence strongly.

No Legally Enforceable Debt: If the underlying agreement for which the cheque was given is illegal or void — the cheque itself has no legal enforceability under Section 138.

Compounding — Settle at Any Stage: Under Section 147 of the NI Act, cheque bounce cases can be compounded (settled) at any stage — even after conviction, at the appellate stage. Therefore, if the complainant and accused reach a settlement — the court closes the case. Contact us immediately if you receive a cheque bounce notice: Cheque Bounce Lawyer Vizag.

How Long Does a Section 138 Case Take?

Cheque bounce cases before Magistrate Courts in Visakhapatnam typically take 1 to 3 years. However, the Summary Trial procedure — available specifically for Section 138 cases — significantly reduces the timeline. Moreover, Fast Track Courts handle these matters with greater speed than regular Magistrate Courts. Additionally, Lok Adalat provides an excellent opportunity to settle cheque bounce cases quickly — with both parties walking away with a binding, unappealable award. Read: Lok Adalat India Benefits.

What Happens if the Accused is Convicted?

After conviction in a Section 138 case, the Magistrate passes the following orders: imprisonment up to 2 years, a fine up to twice the cheque amount, or both imprisonment and fine. Furthermore, the court directs payment of the cheque amount to the complainant as compensation under Section 357 CrPC. Consequently, the complainant recovers both the cheque amount and additional compensation for the legal ordeal.

Frequently Asked Questions

Q: Can I file Section 138 for a post-dated cheque? Yes — but only after the date written on the cheque has passed and the cheque has been presented and dishonoured. Moreover, presenting a post-dated cheque before its date and having it returned does not support a Section 138 complaint. Therefore, always wait until the cheque date arrives before presenting it.

Q: What if the drawer closes their bank account before I can present the cheque? Account closure before cheque presentation still supports a Section 138 complaint — because the drawer committed an act that prevented the cheque from being honoured. Consequently, courts treat deliberate account closure as dishonour under the Act.

Q: Can I file Section 138 for multiple dishonoured cheques from the same person? Yes — each dishonoured cheque gives rise to a separate, independent Section 138 complaint. Furthermore, filing multiple complaints simultaneously puts significant pressure on the drawer to settle. However, consult your advocate on strategy — sometimes consolidating claims is more effective.

Q: Is free legal aid available for cheque bounce cases? Yes — for eligible persons including women and those with income below Rs 3 lakh. Visit DLSA Visakhapatnam or apply at NALSA — nalsa.gov.in. Full guide: Free Legal Aid in Andhra Pradesh.

Also read: Loan Default Rights India | Consumer Court Complaint India | Legal Notice How to Send India | External: RBI Banking Ombudsman — cms.rbi.org.in

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Disclaimer: This article is for general legal education only. Please consult Advocate Ganta Surya Kiran or a qualified advocate before taking any legal action.