How to File a Cheque Bounce Complaint Under Section 138 (2026)

How-to · Commercial Law · Cheque Bounce

Updated for 2026 · Claw Editorial

A cheque bounce case is won or lost on deadlines, and the first one starts the day your bank tells you the cheque was returned. Section 138 of the Negotiable Instruments Act, 1881 makes dishonour of a cheque for want of funds a criminal offence, but only if you follow the steps in the right order and on time. This page is a practical guide: the demand notice, the wait, the deadline to file, the court and jurisdiction, the punishment, and the appeal. Last verified October 2026.

01Why timing is everything

A Section 138 case runs on a strict clock, and a missed deadline can end the case before it starts. The law gives the payee a clear sequence: send a demand notice in time, wait a fixed period, and then file within a fixed window. Skip or delay any step and the complaint can be thrown out.

So the single most useful thing you can do is diarise the dates the moment the cheque bounces. The three deadlines below are the backbone of every cheque bounce case.

02When Section 138 applies

Section 138 applies when a cheque is dishonoured for insufficient funds or because it exceeds the arrangement with the bank, and the cheque was issued to discharge a legally enforceable debt or liability. A few points matter:

• the cheque must have been presented within its validity period (now three months);
• the dishonour must be for want of funds or the account arrangement, not a mere technical defect; and
• there must be an underlying debt or liability; a cheque given as a gift or for an unenforceable debt may not attract Section 138.

03Step 1: the 30-day demand notice

Once the bank returns the cheque, the payee must send a written demand notice to the drawer within 30 days of receiving the bank’s information about the dishonour. The notice must demand payment of the exact cheque amount.

• send it to the drawer’s correct address, by a mode that proves service, such as registered post and courier, and keep the receipts;
• state the cheque details, the date of dishonour, and the amount demanded; and
• missing the 30-day window usually means you cannot prosecute on that dishonour, though you may be able to present the cheque again within its validity.

04Step 2: the 15-day wait

After the drawer receives the notice, the law gives the drawer 15 days to pay the amount. The cause of action to file a complaint arises only if the drawer fails to pay within those 15 days.

This matters a lot: a complaint filed before the 15 days expire is premature and will be dismissed. So you must wait out the full 15-day period from the date the drawer received (or is deemed to have received) the notice. Last verified October 2026.

The 15-day wait is not a formality. File even one day early and the complaint is premature.

05Step 3: file within one month

If the drawer does not pay within the 15 days, the payee must file the complaint within one month of the date on which the cause of action arose, that is, within one month of the 15-day period expiring. This is set by Section 142 of the Act.

• the complaint is filed before the Magistrate, with the dishonoured cheque, the return memo, the notice, and proof of its dispatch and service;
• a complaint filed after the one-month window can still be taken on record if the complainant shows sufficient cause for the delay; and
• only the payee or the holder in due course can file.

06Court, jurisdiction, and punishment

A Section 138 complaint is tried by a Judicial Magistrate, often as a summary trial. On jurisdiction, after the 2015 amendment, the case is generally filed where the bank branch of the payee (the branch where the cheque was presented for collection) is located.

The punishment on conviction is imprisonment up to two years, or a fine up to twice the cheque amount, or both. Courts frequently order compensation to the payee out of the fine.

07Appeal and the 20% deposit

If the drawer is convicted and appeals, Section 148 lets the appellate court order the appellant to deposit a minimum of 20% of the fine or compensation awarded by the trial court, as a condition of the appeal. This is meant to stop frivolous appeals that only delay payment.

Separately, under Section 143A, a trial court can direct the drawer to pay interim compensation even during the trial. These provisions, added in 2018, tilt the process towards quicker recovery for the payee.

08Where Claw fits

Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.

Cheque bounce matters come in bulk and live on dates: the notice, the wait, the one-month window, then years of hearings and often an appeal. Claw keeps each Section 138 case in view by party or advocate name, tracking its orders and hearing dates across the 9,102 courts, benches and forums it reaches, and its 30 crore plus judgments come back in under five seconds when you need to see how courts have read the notice and the jurisdiction rules.

Claw does not use the documents you upload to train its AI models. Create a free Claw account to keep a cheque bounce matter on your radar by party or advocate name, and dig into the surrounding law with case search across Indian courts.

09Sources and further reading

• India Code (official text of the Negotiable Instruments Act, 1881): indiacode.nic.in
• Reserve Bank of India: rbi.org.in
• PRS Legislative Research: prsindia.org
• Claw: clawlaw.in

This guide is general information, not legal advice. The deadlines are strict and fact-specific, so take advice from counsel and check the current text of the Act before you act.

10Frequently asked questions