Cheque bounce is a common financial offence in India. Section 138 of the Negotiable Instruments Act provides a legal remedy to recover dues and penalize defaulters.
What Is a Cheque Bounce Offence?
A cheque bounce occurs when a cheque is dishonoured due to:
- Insufficient funds
- Account closure
- Signature mismatch
- Payment stopped by drawer
Only legally enforceable debts qualify under Section 138.
Legal Notice Requirement
The payee must:
- Send a written legal notice within 30 days of dishonour
- Demand payment within 15 days
Failure to comply bars prosecution.
Filing a Cheque Bounce Complaint
If payment is not made:
- Complaint must be filed within 30 days
- Case is filed before the Magistrate
- Evidence includes cheque, memo, and notice
Proper documentation is critical.
Punishment Under Section 138
Conviction may result in:
- Imprisonment up to 2 years
- Fine up to twice the cheque amount
- Compensation to complainant
Courts prefer settlement where possible.
Defence Options Available
Accused may argue:
- No legally enforceable debt
- Cheque given as security
- Defective legal notice
- Limitation issues
Effective defence requires legal expertise.
Compounding of Cheque Bounce Cases
Section 147 allows compounding at any stage, reducing litigation time and costs.
Online Legal Help for Cheque Bounce Cases
Online legal experts assist with notice drafting, case filing, defence strategy, and settlement negotiation.
Conclusion
Cheque bounce law ensures financial discipline. Timely legal action helps recover dues efficiently.