General information, not legal advice. Laws and bank rules change; check with your bank or a qualified lawyer for your situation.
If a cheque you received bounces for insufficient funds in India, the first legal step is a written demand notice to the drawer. Under the proviso to section 138 of the Negotiable Instruments Act, 1881, you must send it within 30 days of receiving the bank's return memo. The drawer then has 15 days from receiving the notice to pay. If they don't, you can file a criminal complaint within one month after those 15 days run out (section 142(1)(b)).
This guide covers the notice itself: the deadlines, what it must say, how to deliver it, and what happens if the drawer pays. For the offence itself and its penalties, see cheque bounce law in India.
The timeline, step by step
| Step | Deadline | Source |
|---|---|---|
| Present the cheque | Within six months of its date or its validity period, whichever is earlier (three months in practice in India) | Section 138, proviso (a) |
| Send the demand notice | Within 30 days of receiving the return memo from your bank | Section 138, proviso (b) |
| Drawer's time to pay | 15 days from the drawer's receipt of the notice | Section 138, proviso (c) |
| File the complaint | Within one month of the date the cause of action arises (the day after the 15 days end) | Section 142(1)(b) |
Three points about these dates:
- The 30 days start when you learn of the return, which is usually when you receive the cheque return memo. They don't start from the date on the cheque. Keep the memo and note the date you received it.
- The 15 days run from the drawer's receipt of the notice, not from the date you sent it. This is why proof of delivery matters.
- The complaint deadline can be extended by the court, but only if you show "sufficient cause" for the delay (proviso to section 142(1)(b)). Don't rely on it.
Under section 142(2), the complaint is filed where your bank branch is (if you deposited the cheque into your account), or where the drawer's branch is (if the cheque was presented otherwise).
What the notice must contain
The Act only says the notice must be in writing and must demand payment of "the said amount of money". Courts have filled in the rest. A sound notice states:
- Who is sending it and to whom: your name and address, and the drawer's name and address. If the drawer is a company or firm, address the entity and, where relevant, the directors or partners responsible. Your lawyer will advise who to name.
- The cheque details: cheque number, date, amount in figures and words, and the drawee bank and branch.
- The underlying debt: briefly, why the cheque was given (invoice, loan, rent and so on). Section 138 applies only to a cheque issued for a legally enforceable debt or liability.
- The dishonour: the date you presented the cheque, the date of the return memo, and the reason given ("funds insufficient", "exceeds arrangement" and so on).
- The demand: a clear demand to pay the cheque amount within 15 days of receiving the notice.
- The consequence: that you will take legal action under section 138 if payment isn't made.
- Date and signature, by you or your advocate.
Get the amount exactly right
This is where notices fail. In Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul (19 September 2025), the Supreme Court held that a notice demanding an amount different from the cheque amount is invalid. A typing error was no excuse, even though the notice gave the correct cheque number (LiveLaw report). If you also want interest or costs, ask your lawyer how to state them separately so the cheque amount itself is unambiguous.
A sample structure (not a template)
This is an outline of how notices are usually laid out, so you know what to expect from your advocate. It isn't a document to fill in and send.
- Heading: "Legal notice under section 138 of the Negotiable Instruments Act, 1881", with the mode of delivery (for example "By Registered Post A.D. / Speed Post / Email").
- Parties: to (drawer, address), from (payee, address, through advocate if applicable).
- Para 1: the relationship and the debt.
- Para 2: the cheque given (number, date, amount, bank).
- Para 3: presentation, return, the memo's date and reason.
- Para 4: the demand to pay the cheque amount within 15 days of receipt.
- Para 5: the consequence of non-payment.
- Enclosures (copies, kept with you): the cheque, the return memo, and the invoice or agreement.
How to deliver it
Section 138 doesn't prescribe a mode of delivery. What matters is that you can prove the drawer received it, and when. Common methods:
- Registered post with acknowledgement due, or Speed Post. This is the traditional method. Keep the postal receipt, the tracking printout and the returned AD card.
- Courier, with proof of delivery.
- Email or WhatsApp. The Allahabad High Court has held that a section 138 notice sent by email or WhatsApp is valid, and treats it as served under section 13 of the Information Technology Act. Other courts may differ, so many advocates send it electronically and by post.
Send it to every address you have for the drawer, including the one printed on their cheques, invoices and agreements. A notice returned as "refused" or "unclaimed" at the correct address is often treated as served, but that is decided case by case.
If the drawer pays, or wants to settle
If the drawer pays the cheque amount within the 15 days, no offence is made out and the matter normally ends there. Issue a receipt and keep a copy.
If they pay later, the case can still be compounded (settled) at any stage, since the offence is compoundable under section 147. In Sanjabij Tari v. Kishore S. Borcar (25 September 2025), the Supreme Court revised the costs that apply when a case is compounded late (judgment text):
| When the accused pays | Cost on compounding |
|---|---|
| Before defence evidence is recorded | None. The cheque amount alone |
| After defence evidence, before judgment | Additional 5% of the cheque amount |
| Before the Sessions Court or High Court | Additional 7.5% |
| Before the Supreme Court | Additional 10% |
The same judgment told courts to allow summons to be served by the complainant directly and electronically, to set up online payment (QR code or UPI) so the accused can pay early and close the case, and to require a standard synopsis with every complaint. It also held that taking a loan in cash above the Income Tax Act limit doesn't, by itself, make the debt unenforceable under section 138. How quickly each district has put these directions into practice varies, so ask your advocate what applies locally.
Re-presenting instead of suing
You don't have to act on the first bounce. You can re-present the cheque within its validity, and the Supreme Court (in MSR Leathers v. S. Palaniappan, 2012) held that prosecution on a second or later dishonour is allowed if the section 138 conditions are met for that dishonour. Each return starts its own 30-day notice clock.
If you receive a notice
- Don't ignore it. In Sanjabij Tari, the Supreme Court noted that failing to reply to a statutory notice can weigh against the drawer.
- Pay within 15 days if you owe the money. That's the cheapest outcome by a wide margin.
- If you dispute the debt, or the cheque was a security cheque or was misused, reply in writing through a lawyer and keep proof.
Prevention: know what you've issued
Most bounce notices that businesses receive are about cheques they forgot: a post-dated rent or vendor cheque landing in a thin week. Under same-day clearing (see cheque clearing time in India), there is no float left to rescue you. Keep a register of every cheque with its date, and check what falls due each month. In ChequeMaster, every printed cheque is stored against its number with a status. Filter forward-dated cheques still marked Issued, and update statuses from your statement. See managing post-dated cheques.
