In short: when a cheque given for a debt bounces, the payee must send a written demand within 30 days of the bank's return memo. The drawer then has 15 days to pay. If they do not, the payee can file a complaint under Section 138 of the Negotiable Instruments Act within one month. The deadlines are strict on both sides.
The steps and deadlines
- Cheque returned unpaid, for example "funds insufficient" or "exceeds arrangement", with the bank's return memo. The cheque must have been presented within its validity (three months).
- Legal notice within 30 days of receiving the return memo, demanding the cheque amount.
- 15 days to pay from the drawer's receipt of the notice.
- Complaint within one month after those 15 days end, before the magistrate with jurisdiction (generally where the payee's bank branch is).
What happens in the case
The offence can be punished with imprisonment up to two years, a fine up to twice the cheque amount, or both. The court can order the accused to pay interim compensation of up to 20% of the cheque amount (Section 143A). The case can be settled at any stage, because the offence is compoundable.
If you gave the cheque (drawer)
Reply to the notice within time. Valid defences include that there was no legally enforceable debt, that the cheque was given as security and not for an existing debt, or that the notice was defective. Paying within the 15 days ends the matter.
Questions people ask
What is the time limit to send a cheque bounce notice?
Within 30 days of receiving the bank's cheque return memo. The drawer then has 15 days from receiving the notice to pay.
When can I file a Section 138 complaint?
After the 15 days to pay have passed without payment, and within one month from then. A delayed complaint needs the court's condonation.
What is the punishment for cheque bounce in India?
Up to two years' imprisonment, a fine up to twice the cheque amount, or both. Courts often order compensation to the payee.
Can a cheque bounce case be settled?
Yes. It is compoundable at any stage, including during appeal, usually on payment of the agreed amount.
Does a bounced EMI or NACH mandate count?
A bounced auto-debit (ECS/NACH) can lead to a similar complaint under Section 25 of the Payment and Settlement Systems Act, with similar notice periods.
Is a cheque given as security covered?
Courts have held that a security cheque presented after the debt became due can attract Section 138. It depends on the facts, so take advice on your case.
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Become a ClientCall +91 81001 21141This guide gives general information about the law in India as on 11 November 2026. It is not legal advice for your situation, and reading it does not create a lawyer-client relationship. Rules and limits change; please take advice on your own facts.