How to Handle a Cheque Bounce Case Under Section 138: A Step-by-Step Legal Guide

From individuals to proprietors to giant business houses everyone has been confronted with something called as case under section138 of Negotiable Instruments Act or popularly known as cheque bounce case. If you are one who has faced such a situation, here's a guide how to navigate through the same effectively.

The legal process for cheque bounce cases under Section 138 of Negotiable Instruments Act has specific timelines and stages:

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- You have 30 days from receiving the bank memo to send the statutory legal notice, for a legally enforceable liability (this is a mandatory step, without this you cannot file 138 complaint)

- The defaulting party gets 15 days from receiving your notice to pay

- You then have 30 days to file a court complaint if they don't pay (Delay may be condoned if complaint is not filed within 30 days, however the same is at the discretion of the Court)

- Total maximum time: 75 days from cheque bounce to complaint filing

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- Filing of complaint before the Court having jurisdiction (?????????? ???????????? ???????????????????????? ???????? ?????????????????? ????: The jurisdiction for a cheque bounce case lies with the court that oversees the police station under whose jurisdiction the bank branch where the cheque was dishonored is located)

- First comes verification where the court checks basics like jurisdiction, limitations and timelines

- Then Court passes an order to “issue notice” to the accused about the complaint

- The offence under section 138 is bailable, unless the accused fails to appear before the Court in spite of receiving the notice, Court can issue non-bailable warrant.

- Both parties present their evidence - this includes documents and witness testimony

- After evidence, there are final arguments where both sides present their case

- Finally, the court delivers its judgment

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- The notice is mandatory

- Keep all original documents especially the cheque, bank memo, and notice copy

- Track your timelines carefully

- The accused can be punished with up to 2 years jail and/or fine up to twice the cheque amount

????????: This is not a fixed procedure; both parties may file various interim applications as needed.

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Even if you have missed the timeline, don’t worry, you can still recover the amount legally due to you by filing a Summary Suit in the Civil Court. We will discuss in detail regarding this in a separate weekly Gyaan session.