Guide
How to file a cheque bounce complaint under Section 138 NI Act
A complaint under Section 138 of the Negotiable Instruments Act, 1881 succeeds or fails largely on dates and documents. This guide sets out the conditions that must be met, where and how the complaint is filed, and what follows.
Last updated 9 October 2026
Section 138 makes it an offence for the drawer of a cheque to fail to pay after the cheque, issued towards a legally enforceable debt or other liability, is returned unpaid and a written demand is made. The offence is punishable with imprisonment up to two years, or fine up to twice the amount of the cheque, or both.
The complaint is a private complaint to a Magistrate, not a police case. The court can take cognizance only on a written complaint by the payee or the holder in due course of the cheque.
Steps from dishonour to filing
Confirm the cheque was for an enforceable debt
The cheque must have been issued in discharge, wholly or in part, of a legally enforceable debt or other liability. Gather the documents that show the underlying transaction: invoices, a loan agreement, an acknowledgment, ledger statements or messages. Sections 118 and 139 presume in the holder's favour that the cheque was issued for consideration and for a debt, but the accused can rebut that.
Check presentation and the return memo
The cheque must have been presented within three months of its date or within its validity, whichever is earlier. Obtain the bank's return memo showing the date and reason for dishonour. Insufficient funds, exceeding arrangement, account closed and payment stopped have all been held to fall within the section.
Send the demand notice within 30 days
Send a written notice demanding the cheque amount within thirty days of receiving the return memo, to the drawer's correct address, by registered or speed post with acknowledgment due. Keep the postal receipt and the tracking report or acknowledgment card.
Wait for the 15 days to run
The drawer has fifteen days from receipt of the notice to pay. A complaint filed before those fifteen days expire is premature and not maintainable.
Draft the complaint and evidence affidavit
The complaint sets out the debt, the cheque, presentation, dishonour, the notice, its service and the failure to pay, with the dates, and pleads jurisdiction and limitation. File with it the complainant's evidence by affidavit, which Section 145 permits, and a list of documents and witnesses.
File before the right court within one month
File within one month of the date the cause of action arose, which is the day after the fifteen-day period ended. The complaint lies before a Metropolitan Magistrate or a Judicial Magistrate of the first class. Where the cheque was delivered for collection through an account, the court with jurisdiction is the one where the branch of the bank in which the payee maintains the account is situated (Section 142(2)).
Documents to file with the complaint
- The original cheque and the original bank return memo.
- Office copy of the demand notice.
- Postal receipt, and the acknowledgment card or tracking report showing delivery, refusal or return.
- Any reply received from the drawer.
- Documents proving the underlying debt or liability.
- The complainant's affidavit of evidence under Section 145.
- Where the complainant is a company or firm, the board resolution or authorisation in favour of the person signing and deposing.
- Vakalatnama, court fee as prescribed in the state, and a memo of parties with addresses.
- An application for condonation of delay, if the complaint is filed after one month.
When the drawer is a company or firm
Under Section 141, where the offence is committed by a company, which includes a firm or other association, the company and every person who was in charge of and responsible for the conduct of its business at the time are liable. The company must be made an accused, and the complaint must specifically aver how each director or partner named was in charge of the business. The demand notice should be addressed to the company and to those persons.
What happens after filing
- Scrutiny and cognizance: the Magistrate examines the complaint and the affidavit and, if a case is made out, issues summons. Under Section 223 of the BNSS, a Magistrate is to give the accused an opportunity of being heard before taking cognizance of a complaint; High Courts have differed on how this applies to Section 138 complaints, so check the practice in your court.
- Appearance and plea: the accused appears, is released on bail (the offence is bailable), and the substance of the accusation is put to the accused.
- Interim compensation: under Section 143A the court may direct the drawer to pay interim compensation of up to twenty per cent of the cheque amount where the accused pleads not guilty.
- Trial: the case is tried summarily as far as possible. The accused may apply to cross-examine the complainant, and leads defence evidence to rebut the statutory presumptions.
- Settlement: the offence is compoundable under Section 147 and many cases end in a settlement, which courts encourage at an early stage.
- Judgment and appeal: on conviction the court may impose imprisonment, a fine up to twice the cheque amount, or both, and direct compensation to the complainant. In an appeal by the drawer, the appellate court may order deposit of at least twenty per cent of the fine or compensation under Section 148.
File a Section 138 complaint: common questions
Is a cheque bounce case civil or criminal?
A complaint under Section 138 is a criminal proceeding before a Magistrate. The payee may separately file a civil suit to recover the money, including a summary suit under Order XXXVII of the Code of Civil Procedure; the two remedies are not exclusive.
Can I file a Section 138 complaint for a security cheque?
It depends on whether a legally enforceable debt existed when the cheque was presented. Courts have held that a cheque given as security can attract Section 138 if the debt it secured had become due and payable by the time of presentation.
What if the notice comes back unclaimed or refused?
A notice sent by registered post to the drawer's correct address is presumed to have been served. Plead the dispatch, the address and the postal endorsement in the complaint. The fifteen days are generally counted from the date of refusal or return.
How long does a Section 138 case take?
Section 143 says the trial should, as far as possible, be concluded within six months of the complaint being filed. In practice it often takes considerably longer, which is why early settlement is common.
Run cheque dishonour matters on a checklist
Open a cheque bounce matter from Settl's Indian matter templates, record the limitation date on the matter, and generate the notice and complaint from the case record on your letterhead for review.
Not legal advice. This guide is general information. Portals, fees, forms and court rules change, and practice differs between courts. Check the current rules and the official portal, and consult a qualified advocate about your own matter. Settl is not a law firm.