Cheque Bounce and Legal Notice in India — Section 138 Timeline, Notice Format, Punishment and Interim Compensation
Quick answer: A bounced cheque becomes a criminal offence under Section 138 of the Negotiable Instruments Act only if the timeline is kept: the cheque must be presented within its three-month validity, the payee must send a written demand notice within 30 days of the bank's return memo, the drawer then has 15 days from receipt to pay, and if he does not, the complaint must be filed before the Magistrate within 30 days after that 15-day period ends. Conviction carries imprisonment up to two years, a fine up to twice the cheque amount, or both, and the court can order interim compensation of up to 20% of the cheque amount during the trial under Section 143A. Missing the 30-day notice window is fatal to the criminal case, though a civil recovery suit remains open.
Last verified 5 October 2026 — rules on this page checked against the current notifications. We update it the day a rule changes.
The Section 138 clock — step by step
| Step | What must happen | Time limit |
|---|---|---|
| 1. Present the cheque | Deposit it for a legally enforceable debt or liability within its validity | Within 3 months of the date written on it |
| 2. Bank returns it unpaid | Cheque return memo for insufficient funds or because the amount exceeds the arrangement with the bank; stop-payment returns are also covered where a debt exists | — |
| 3. Demand notice | Written notice to the drawer demanding the exact cheque amount within 15 days | Within 30 days of receiving the return memo |
| 4. Drawer's window | Drawer may pay the amount and the offence does not arise | 15 days from receipt of the notice |
| 5. Complaint | Criminal complaint before the Magistrate with the cheque, return memo, notice, proof of delivery and affidavit | Within 30 days after the 15-day window ends (Section 142) |
| 6. Trial | Summons, plea, evidence; interim compensation can be ordered | Section 143A — up to 20% of the cheque amount |
Punishment and money relief
- Punishment: imprisonment up to two years, fine up to twice the cheque amount, or both — an offence tried summarily and compoundable by settlement
- Interim compensation: Section 143A (2018) lets the trial court direct the accused to pay up to 20% of the cheque amount during the trial; the 2019 amendment extends a similar deposit requirement to appeals
- Parallel remedies: a civil recovery suit, summary suit under Order 37 CPC, or insolvency notice against a company debtor remain available; the criminal and civil routes can run together
- Bank charges: each bank levies its own return charge on the drawer under its schedule of charges; that is separate from the legal consequences above
Legal notice — beyond cheques
- What it is: a formal written communication on an advocate's letterhead stating facts, the legal basis, the demand and a deadline; it is often a precondition to a suit (for example against a government body under Section 80 CPC, two months' notice) and it records that the other side was warned
- Format: parties and addresses, facts in order, breach, demand with amount and date, consequences, reservation of rights, and a clear contact for reply; keep copies of postal proof
- Typical uses: unpaid invoices, breach of contract, defective goods or services, employment dues, tenancy and property disputes, defamation and IP infringement (cease and desist)
- If you receive one: do not ignore it — reply through an advocate within the period stated, deny what is false, annex documents and, where the claim is partly right, offer a settlement; a silent drawer weakens his own defence
- There is no statutory fee for sending a notice; advocates charge a professional fee by the matter
What we do
- Cheque-bounce notice, complaint drafting and appearances in Delhi, Gurugram, Noida, Faridabad, Ghaziabad and Patna courts; replies to false notices
- Recovery strategy combining Section 138, civil suit and mediation; vendor-dues recovery under MSME rules
- Contract and notice drafting — agreements, departmental representation
Dates, forms and thresholds are quoted from the governing Act, rules and official portals; where a figure changes by notification or year, the page says so and we confirm it at filing rather than estimate.
Talk to us before you file anything
Frequently asked questions
What is the time limit to send a legal notice for a bounced cheque?
Within 30 days of receiving the bank's cheque return memo; missing it defeats the Section 138 criminal case.
How long does the drawer have to pay after the notice?
Fifteen days from receipt of the notice; if he pays within that period the offence does not arise.
When must the Section 138 complaint be filed?
Within 30 days after the 15-day payment period expires, before the Magistrate.
What is the punishment for cheque bounce?
Imprisonment up to two years, a fine up to twice the cheque amount, or both.
What is interim compensation under Section 143A?
The trial court can direct the accused to pay up to 20% of the cheque amount to the complainant while the trial is pending.
Within how many months must a cheque be presented?
Three months from the date written on the cheque, or within its validity if shorter.
What should a legal notice contain?
Parties and addresses, facts, the breach, the exact demand with a deadline, consequences of non-compliance and a reservation of rights, sent by a mode that proves delivery.
What should I do if I receive a false cheque-bounce notice?
Reply through an advocate within the period in the notice, deny the debt with reasons and documents, and do not ignore it.