Cheque Bounce

Cheque bounce and criminal prosecution under Section 138 of the Negotiable Instrument Act, 1881

Considered to be one of the best modes of recovering dues, we assist our Clients in prosecuting complaints under the Negotiable Instrument Act, 1881 (NI Act) This method is used in instances concerning the recovery of money arising from instruments of payment such as cheques and bills. Section 138 of the NI Act provides the basis for initiating criminal proceedings in instances of bounced cheques with clear timelines and limitations for each step.

The first step to initiate the legal process under cheque bounce cases is to send a legal notice to the drawer within 30 days from the date of the cheque was presented and returned back by the bank to the drawee. It must be clearly mentioned in the notice that the complainant will initiate appropriate legal action under the Negotiable Instruments Act against the drawer if he/she fails to make the pending payment within 15 days from the notice. Thereafter, on not receiving any payment from the drawer, an aggrieved person can file a complaint under Section 138 of the NI Act before the court at the place where the Complainant / Drawee maintains his bank account.

Once the complaint has been filed, the court served the notice to the accused person by way of summons after being satisfied with the facts of the complaint. The court reserves the right to issue non-bailable warrants against the accused person if he / she is found to be evading his / her presence before the court.

Since the mode of recovery is through criminal proceedings, most matters usually settle at the initial stages of the complaint.