What Is Section 138 NI Act?

Section 138 of the Negotiable Instruments Act deals with cheque dishonour. It applies when a bank returns a cheque due to insufficient funds or because the amount exceeds the arrangement made by the account holder.

Conditions for Filing a Cheque Bounce Complaint

To file a cheque bounce case under Section 138, the complainant must meet specific legal conditions.

First, the payee must present the cheque to the bank within six months from the date mentioned on it or within its validity period.
Second, the payee must send a legal demand notice within 30 days of receiving the cheque return memo.
Third, the drawer must fail to make payment within 15 days of receiving the notice.

Meeting these conditions is essential for maintaining a valid complaint. Cheque bounce lawyers in Delhi ensure that every procedural step is followed correctly.

Penalties for Cheque Bounce Offence

If the court finds the drawer guilty, it can impose serious penalties. The court may award imprisonment for up to two years. It may also impose a fine of up to twice the cheque amount. In some cases, the court may order both punishment and fine.

Compounding and Settlement of Cases

Courts allow parties to settle cheque bounce cases through compounding. The parties can resolve the dispute amicably with court approval. Early settlement often saves time, cost, and litigation stress.

Jurisdiction in Cheque Bounce Cases

Magistrate courts usually hear cheque bounce cases. The complainant can file the case where the payee’s bank is located or where the cheque was presented for collection.

Multiple Dishonoured Cheques

When multiple cheques bounce, the complainant can file separate complaints for each cheque. Each dishonour creates a distinct legal cause of action.

Legal Remedies and Professional Assistance

If you receive a dishonoured cheque, you can initiate proceedings under Section 138 of the NI Act. Legal guidance plays a crucial role in achieving recovery or prosecution. Cheque bounce lawyers in Delhi provide strategic advice, draft notices, and represent clients effectively before courts.

Cheque bounce cases require strict compliance with timelines and procedures. Professional legal support helps avoid technical errors and strengthens your case.