When a cheque issued to discharge a debt is returned unpaid, the payee must send a written demand notice to the drawer within thirty days of receiving the bank's return memo. If payment is not made within fifteen days of the drawer receiving that notice, a complaint under section 138 of the Negotiable Instruments Act, 1881 must be filed within one month. An NRI can file through a power of attorney holder. The offence carries up to two years' imprisonment or a fine of up to twice the cheque amount.
- Notice to drawer
- Within 30 days of return memo
- Drawer's time to pay
- 15 days from receipt
- File complaint within
- 1 month thereafter
- Punishment
- Up to 2 years or twice the amount
What must be shown
Section 138 applies where a cheque drawn on the drawer's own account, given to discharge a legally enforceable debt or liability, is presented within its validity (three months from its date) and returned unpaid for insufficient funds or because it exceeds an arrangement with the bank. Courts treat "account closed", "payment stopped" and signature mismatch engineered by the drawer in the same way.
Once the signature is admitted, section 139 raises a presumption that the cheque was issued for a debt, and the burden shifts to the drawer to rebut it. This presumption is what makes the remedy powerful. A cheque given as a gift or donation, or against a time-barred debt without fresh acknowledgement, falls outside the section.
The timeline you cannot miss
- Presentation. Present the cheque within three months of its date. It may be presented more than once within that period.
- Notice. Within thirty days of the bank's intimation of dishonour, send a written notice demanding the cheque amount. Send it by registered post and courier to every known address, and by email as an additional step.
- Waiting period. The drawer has fifteen days from receipt to pay.
- Complaint. File before the Magistrate within one month after the fifteen days expire. Delay can be condoned only on sufficient cause.
Under section 142, the complaint is filed in the court within whose jurisdiction the branch of the bank where the payee maintains the account is situated, when the cheque was deposited through an account. For an NRI payee that is the branch of your NRO or NRE account.
Filing while you live abroad
The Supreme Court held in A.C. Narayanan v. State of Maharashtra (2014) that a power of attorney holder can file and verify a section 138 complaint and give evidence on facts within their personal knowledge. Where the transaction is known only to you, your affidavit evidence is filed and cross-examination conducted by video conference. Evidence of the complainant may be given on affidavit under section 145, which removes most need for attendance.
A cheque can be sent to your Indian bank for collection, or deposited by your attorney holder. Keep the envelope and tracking record of the notice; proof of dispatch to the correct address creates a presumption of service even if the drawer avoids delivery.
What happens in court
These cases are tried summarily. The court issues summons, the accused may be asked to explain the defence, and the statute contemplates conclusion within six months, though crowded dockets often stretch that. Section 143A allows the court to order interim compensation of up to twenty per cent of the cheque amount once the accused pleads not guilty, and section 148 lets an appellate court require deposit of at least twenty per cent of the fine or compensation awarded.
The offence is compoundable at any stage, and most cases end in payment with a negotiated component for interest and costs. A civil recovery or summary suit for the underlying debt, with interest, can be filed alongside within three years; the two remedies are independent. Where the cheque was part of a larger fraud, see fraud recovery.
If you are the accused
NRIs are also on the other side: a blank signed cheque left with a relative, a security cheque misused by a lender, or liability as a former director of a company. Defences include absence of a legally enforceable debt, the cheque having been given as security for a liability that never arose, material alteration, a notice not sent to the correct address, and a complaint filed out of time. A director is liable only if in charge of and responsible for the company's business at the time, which must be specifically pleaded. Reply to the statutory notice in writing: silence is used against the drawer.
Mistakes that cost NRIs time and money
- Missing the thirty-day notice period.
- Sending the notice to one address only.
- Presenting the cheque after three months.
- Filing in a court without jurisdiction.
A typical situation
Settled at the first hearing
A cheque given by a relative to repay a loan is returned for insufficient funds. Notice goes out within ten days to home and office addresses and by email. No payment comes, and a complaint is filed through the payee's sister under a power of attorney. On receiving summons and facing interim compensation, the drawer pays the amount with an agreed sum for interest and costs, and the case is compounded.
Illustration only, based on patterns we commonly see. It is not a real client's case and outcomes depend on the facts.
If you live in...
The Indian law is the same wherever you live. These are the points that differ by where you are.
USA and Canada
Courier the cheque to your Indian bank for collection or have your attorney deposit it; keep the return memo date in view.
UK and Europe
Evidence can be given on affidavit, sworn before a notary and apostilled.
UAE and the Gulf
Many lenders in the Gulf hold several post-dated cheques; each dishonour has its own timeline.
Country pages: UAE, Saudi Arabia, Qatar, Kuwait, Oman, Bahrain
Australia, New Zealand and Asia
A short time difference makes video cross-examination simple to schedule.
Country pages: Australia, New Zealand, Singapore, Malaysia
Detailed country pages for this service: Cheque Bounce and Money Recovery: UAE NRIs, Cheque Bounce and Money Recovery: Kuwait NRIs
Documents you will need
Preserve the originals; they are primary evidence.
- Original dishonoured cheque
- Bank return memo with reason and date
- Proof of the debt: agreement, transfers, messages
- Copy of the demand notice
- Postal and courier receipts and tracking report
- Reply from the drawer, if any
- Power of attorney in favour of your representative
- Your bank account details where the cheque was deposited
How we handle it for you
Deadline check
We calculate each statutory date from the return memo and confirm jurisdiction.
Demand notice
A precise notice is sent to all addresses within the thirty days.
Complaint
If unpaid, the complaint with affidavit evidence is filed through your attorney holder.
Summons and interim compensation
We secure service, press for interim compensation and resist adjournments.
Recovery
Settlement with payment, or conviction with compensation, followed by enforcement.
Frequently asked questions
Can an NRI file a cheque bounce case in India from abroad?
Yes. A power of attorney holder can file the complaint and depose to facts within their knowledge. Your own evidence can be given by affidavit and video conference.
What is the time limit to file a cheque bounce case?
Notice must be sent within thirty days of the bank's dishonour memo. If the drawer does not pay within fifteen days of receiving it, the complaint must be filed within one month after that.
Where should the cheque bounce complaint be filed?
In the court having jurisdiction over the bank branch where the payee holds the account into which the cheque was deposited.
What if the drawer refuses to accept the notice?
A notice sent by registered post to the correct address is presumed served even if refused or returned unclaimed. Keep the returned envelope and tracking record.
Can I recover the money as well as have the drawer punished?
Yes. The court can award compensation up to twice the cheque amount to the complainant, and you may file a separate civil suit for the debt and interest.
Is a post-dated or security cheque covered by section 138?
A post-dated cheque is covered once its date arrives. A security cheque is covered if, on the date of presentation, a debt of that amount had become due.
Can I present the cheque again after it bounces?
Yes, any number of times within its three-month validity. The notice period runs from the dishonour you choose to act on.
What if the drawer is a company?
The company and the persons in charge of its business at the time are prosecuted together; both must be named.
