A cheque bounce case is a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 (the NI Act). If a cheque given for a legally enforceable debt or other liability is returned unpaid because the money in the drawer’s account is insufficient, or because it exceeds the amount arranged with the bank, the drawer is deemed to have committed an offence, provided three conditions are met: the cheque was presented within its validity, the payee sent a written demand notice within thirty days of receiving the bank’s information about the return, and the drawer did not pay within fifteen days of receiving that notice. The payee then has one month to file a written complaint, which, for a cheque deposited through an account, goes to the court where the payee’s home branch (the branch where the payee keeps the account) is situated. The punishment is imprisonment of up to two years, or a fine of up to twice the cheque amount, or both, and the offence is compoundable, so the parties can settle it.
This guide explains each step in the words of the Act and of the Supreme Court, including its directions of 2021 and 2025, with a summary in Hindi and answers to common questions.
Cheque bounce case at a glance
- Time limits: present the cheque within six months of its date or within its validity, whichever is earlier (three months for cheques dated on or after 1 April 2012, under the Reserve Bank of India’s circular of 4 November 2011); send a written demand notice within thirty days of the bank’s information about the return; the drawer has fifteen days from receiving it to pay; then file the complaint within one month.
- Which court: for a cheque deposited through an account, a court within whose local jurisdiction the payee’s home branch is situated (Section 142(2)(a); Jai Balaji Industries v. HEG Ltd, Supreme Court, 2025), and only a Metropolitan Magistrate or a Judicial Magistrate of the first class can try the case.
- Punishment and bail: imprisonment for up to two years, or a fine of up to twice the cheque amount, or both (Section 138); the offence is non-cognizable and bailable under the First Schedule to the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).
- Bank return reasons: a cheque returned “account closed”, “payment stopped” or “referred to the drawer”, or because the signatures do not match, can also lead to a case (Laxmi Dyechem v. State of Gujarat, Supreme Court, 2012), once the notice and the fifteen days have passed without payment.
- Presumption and defence: the court presumes that the cheque was received for a debt or other liability (Section 139), but the accused can rebut this on a “preponderance of probabilities”, even from the complainant’s own material (Rajesh Jain v. Ajay Singh, Supreme Court, 2023).
- Money during the case: the trial court may order interim compensation of up to 20% of the cheque amount (Section 143A, a discretionary power), and on an appeal against conviction a deposit of at least 20% of the fine or compensation may be ordered (Section 148).
- Settlement: the offence is compoundable (Section 147); under Sanjabij Tari v. Kishore S. Borcar (Supreme Court, 25 September 2025), paying before the defence evidence is recorded costs nothing extra, and later payment costs an additional 5%, 7.5% or 10% of the cheque amount, depending on the stage.
- Civil route: the payee can also sue for the money under the summary procedure of Order XXXVII of the Code of Civil Procedure, 1908, because a cheque is a bill of exchange (Section 6).
Reviewed and updated by Century Law Firm, Delhi – October 2026. Statutory references are to the Acts as in force on that date. The NI Act is quoted from its English and Hindi texts on India Code (and, where the English text there has a printing slip, from the Supreme Court’s reproduction of the section), the other Acts from their India Code texts, the RBI circulars from the Reserve Bank’s website, the Delhi High Court’s practice directions from its website, and the judgments from the Supreme Court’s own copies.
This page is the firm’s overview of cheque bounce cases. Answers to more detailed questions, such as how many cheques can go in one complaint, what is asked in cross-examination, cases against companies in insolvency, and appeals after conviction or acquittal, are in the firm’s Cheque Bounce Case FAQs.
What is a cheque, and when does it bounce?
Section 6 of the NI Act defines a cheque: “A ‘cheque’ is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form.” The words on electronic images and electronic cheques came in when the section was substituted with effect from 6 February 2003. Under Section 7, the maker of a cheque is the “drawer”, the person “thereby directed to pay”, the bank, is the “drawee”, and the person named in the cheque to whom, or to whose order, the money is to be paid is the “payee”. A “holder in due course” (Section 9) is, broadly, a person who came to hold the cheque for consideration before the amount became payable, without sufficient cause to believe that there was any defect in the title of the person from whom he derived his title. In the Act’s official Hindi text the drawer is लेखीवाल, the drawee ऊपरवाल and the payee पाने वाला.
A cheque is “dishonoured by non-payment” when the drawee “makes default in payment upon being duly required to pay the same” (Section 92); in everyday speech, the cheque has bounced. The bank returns it with a memo giving the reason.
The memo carries weight in court. Under Section 146, on production of the bank’s slip or memo “having thereon the official mark denoting that the cheque has been dishonoured”, the court shall “presume the fact of dishonour of such cheque, unless and until such fact is disproved”. The memo is therefore prima facie evidence of the dishonour, which the drawer may still disprove. A returned cheque is not by itself an offence: Section 138 applies only when its further conditions, explained below, are met.
Section 138 of the NI Act: the text
Section 138, headed “Dishonour of cheque for insufficiency, etc., of funds in the account”, opens Chapter XVII of the Act, “Of penalties in case of dishonour of certain cheques for insufficiency of funds in the accounts”. The English text on India Code has a few printing slips (its Explanation reads “debt of other liability”, for example), so the section is given here as the Supreme Court reproduced it in Ashok Singh v. State of Uttar Pradesh (2 April 2025):
“Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both:”
“Provided that nothing contained in this section shall apply unless— (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;”
“(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and”
“(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.”
“Explanation.—For the purposes of this section, ‘debt or other liability’ means a legally enforceable debt or other liability.”
In Ashok Singh the Supreme Court summed up what the complainant must establish: “that the cheque was genuine, presented within time and upon it being dishonoured, due notice was sent within 30 days of such dishonour, to which re-payment must be received within 15 days, failing which a complaint can be preferred by the complainant within one month as contemplated under Section 142 (1)(b) of the Act”. The Act itself counts the thirty days for the notice from the receipt of the bank’s information about the return (Section 138(b)). The debt itself is presumed under Section 139 unless the accused rebuts the presumption, as explained below.
Chapter XVII, then containing Sections 138 to 142, was inserted by Act 66 of 1988 with effect from 1 April 1989, with the object, in the words of Goaplast (P) Ltd. v. Chico Ursula D’souza, (2003) 3 SCC 232, as quoted by the Supreme Court in Laxmi Dyechem, of “inculcating faith in the efficacy of banking operations and giving credibility to negotiable instruments in business transactions”. From 6 February 2003, the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 raised the maximum imprisonment from one year to two years, extended the time for the demand notice from fifteen to thirty days and inserted Sections 143 to 147; Sections 142(2) and 142A followed from 15 June 2015, and Sections 143A and 148 from 1 September 2018 (the Negotiable Instruments (Amendment) Act, 2018). The Repealing and Amending Act, 2025 later repealed the 2018 amending Act, but under Section 6A of the General Clauses Act, 1897 such a repeal “shall not affect the continuance of any such amendment”, so Sections 143A and 148 remain in force.
Crime, civil wrong or fraud?
Section 138 says that the drawer “shall be deemed to have committed an offence”, and a conviction can carry imprisonment, so a cheque bounce case is a criminal case. The Supreme Court has nonetheless described it in measured terms. In Rangappa v. Sri Mohan, (2010) 11 SCC 441, a bench of three judges said that the offence “can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions” (as quoted by the Supreme Court in Uttam Ram v. Devinder Singh Hudan, 17 October 2019), and in Sanjabij Tari the Court repeated its description, from P. Mohanraj v. Shah Brothers Ispat, (2021) 6 SCC 258, of a Section 138 proceeding as “a ‘civil sheep’ in a ‘criminal wolf’s’ clothing” and said that the offence “is quasi-criminal in character and is compoundable”.
The Act’s word is “dishonour” (अनादरण in its official Hindi text), not fraud: the offence is made out by the facts that Section 138 lists, and under Section 140 it is not a defence that the drawer “had no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment for the reasons stated in that section”. This page deals only with the offence under Section 138; it does not cover whether any other offence is also made out.
Which bank return reasons can lead to a Section 138 case?
Section 138 itself names two reasons for the return: the money standing to the credit of the account “is insufficient to honour the cheque”, or the cheque “exceeds the amount arranged to be paid from that account by an agreement made with that bank”. Banks use many more remarks; the Reserve Bank’s model list of objections, an undated annexure on its website, includes “Refer to drawer.”, “Drawer’s signature differs from the specimen on record.”, “Payment stopped by the drawer.” and “Account closed.”, but it says nothing about Section 138.
In M/s Laxmi Dyechem v. State of Gujarat (27 November 2012), the Supreme Court refused to read the two reasons in the section “strictly or literally”. Agreeing with NEPC Micon Ltd. v. Magma Leasing Ltd., (1999) 4 SCC 253, it held that the words about the money being insufficient are a genus, that dishonour for reasons such as “account closed”, “payment stopped” and “referred to the drawer” are “only species of that genus”, and that dishonour because the “signatures do not match” or the “image is not found” likewise “would constitute a dishonour within the meaning of Section 138 of the Act”. It also recalled that in Modi Cements Ltd. v. Kuchil Kumar Nandi, (1998) 3 SCC 249, a bench of three judges had rejected the argument that a cheque on which the drawer had stopped payment could not lead to an offence.
On stopped cheques the Court was explicit: “dishonour on the ground that the payment has been stopped, regardless whether such stoppage is with or without notice to the drawer, and regardless whether the stoppage of payment is on the ground that the amount lying in the account was not sufficient to meet the requirement of the cheque, would attract the provisions of Section 138”. The drawer still has a defence, but he must prove it. As the Court quoted from MMTC Ltd. v. Medchl Chemicals and Pharma (P) Ltd., (2002) 1 SCC 234, if the accused shows that “in his account there were sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop-payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then offence under Section 138 would not be made out”, but “the burden of so proving would be on the accused”.
The Court also allowed for honest cases. A dishonour caused by a change of signatories in the ordinary course of business “may not constitute an offence by itself”, because the drawer must first receive the statutory notice and have the chance to pay, and even then the trial court examines whether there was a lawfully recoverable debt. A recent example on the other side is Ashok Singh v. State of Uttar Pradesh (2 April 2025): the cheque had been returned with the endorsement “payment stopped by drawer”, the drawer said it had been lost but had not replied to the legal notice, and the Supreme Court restored his conviction, though, considering his age, it modified the sentence to a fine of Rs 32,00,000.
The firm has found no official source explaining how other remarks, such as a stop “under Court Order” or the codes printed in bank statements, are treated under Section 138, so this page does not deal with them.
What to do when a cheque bounces: step by step
For the payee, the law lays down a fixed sequence, and Section 138 does not apply unless each step in its proviso is completed in time. The steps, and what happens after the complaint is filed, are shown below.
Prepared by Century Law Firm from the Negotiable Instruments Act, 1881 and the Supreme Court’s judgments in Rakesh Ranjan Shrivastava v. State of Jharkhand (2024) and Sanjabij Tari v. Kishore S. Borcar (2025).
First, present the cheque in time. Section 138(a) requires presentation “within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier”, and by its circular of 4 November 2011 the Reserve Bank of India directed that from 1 April 2012 banks “should not make payment of cheques/drafts/pay orders/banker’s cheques bearing that date or any subsequent date, if they are presented beyond the period of three months from the date of such instrument”. In practice, therefore, a cheque must be presented within three months of its date. On 28 November 2025 the Reserve Bank consolidated its instructions into Master Directions and withdrew 9,445 earlier circulars (circular RBI/2025-26/100), so the current wording should be checked in its Master Directions.
Second, keep the returned cheque and the bank’s return memo. You may ask the drawer to pay, but the thirty days for the notice run from the bank’s information about the return, not from any later talks with the drawer.
Third, send the written demand notice within those thirty days (Section 138(b)). The Act requires notice “in writing, to the drawer of the cheque” but does not say that it must be handed to the drawer personally. Keep proof of dispatch and delivery, which the synopsis at the head of every complaint now asks for.
Fourth, wait fifteen days from the drawer’s receipt of the notice. If he pays within that time, no offence under Section 138 is made out, so, for a drawer, paying within this period is the safe course. If he does not pay, the cause of action arises: as the Supreme Court noted in S. Nagesh v. Shobha S. Aradhya (6 January 2026), referring to Dashrath Rupsingh Rathod, “the proviso to Section 138 simply postpones institution of criminal proceedings and taking of cognisance by the Court till such time the cause of action in terms of clause (c) of the proviso accrues to the complainant”.
Fifth, file the complaint “within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138” (Section 142(1)(b)); the Act says one month, not thirty days. A later complaint can be taken up only “if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period”, and, in the words of S. Nagesh, “The satisfaction in that regard, resulting in condonation of the delay, must therefore precede the act of taking cognizance.” In that case the Court quashed a complaint filed two days late because the Magistrate had taken cognizance before condoning the delay.
Which court can hear a cheque bounce case?
Only a Metropolitan Magistrate or a Judicial Magistrate of the first class can try the offence (Sections 142(1)(c) and 143(1)). Where the complaint is filed depends on how the cheque was presented. Since 15 June 2015, Section 142(2) has provided that the offence “shall be inquired into and tried only by a court within whose local jurisdiction” the relevant branch is situated: for a cheque “delivered for collection through an account”, the branch of the bank where the payee or holder in due course “maintains the account”; and for a cheque presented for payment “otherwise through an account”, “the branch of the drawee bank where the drawer maintains the account”. Under the Explanation, a cheque delivered for collection at any branch of the payee’s bank is deemed to have been delivered to the branch where the payee maintains the account.
Before that amendment, in Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129, decided on 1 August 2014, a bench of three judges had held that the case could be tried only where the drawee bank, the drawer’s bank, is situated (as described in the Jai Balaji judgment that follows). In Jai Balaji Industries Ltd. v. M/s HEG Ltd. (28 November 2025), the Supreme Court held that “it is as clear as a noon day” that jurisdiction over a complaint about a cheque delivered for collection through an account “is vested in the court within whose local jurisdiction the branch of the bank in which the payee maintains the account, i.e., the payee’s home branch, is situated”, and declared a contrary view taken in Yogesh Upadhyay “per incuriam”. A payee who deposits the cheque in his own account therefore files the complaint where his home branch is, even if the drawer lives elsewhere.
Once a complaint against a drawer is pending in the court that has jurisdiction under Section 142(2), Section 142A(2) requires “all subsequent complaints arising out of section 138 against the same drawer” to be filed before the same court, wherever those cheques were delivered for collection or presented. When several cheques can be tried together in one trial is explained in the firm’s cheque bounce FAQs.
Filing the complaint: who files it and what it must contain
Under Section 142(1)(a), a court can take cognizance only “upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque”. The complaint is filed with the original cheque, the bank’s return memo, the demand notice with proof of its dispatch and delivery, any reply, and the other documents relevant to the debt.
Since Sanjabij Tari v. Kishore S. Borcar (25 September 2025), which the High Courts and District Courts were to implement by 1 November 2025, “Each and every complaint under Section 138 of the NI Act shall contain a synopsis” in a set format at the top of the file. It gives the particulars of the parties (for a company or firm, also the persons vicariously liable), the cheque, the dishonour and its reason, the statutory notice with the proof and date of its delivery, the cause of action and the “Jurisdiction invoked under Section 142(2)”, any other Section 138 complaint pending between the same parties, and whether interim compensation under Section 143A is sought.
The complainant must also give the accused’s e-mail address, mobile number and/or WhatsApp details, “duly supported by an affidavit verifying that the said particulars pertain to the accused/respondent”, because summons are now also served by the complainant himself (dasti) and by electronic means under the applicable rules; a false affidavit of service can lead to action against the complainant. The Court also held that “there shall be no requirement to issue summons to the accused in terms of Section 223 of BNSS i.e., at the pre-cognizance stage”, although the first proviso to Section 223 of the BNSS (formerly Section 200 CrPC) otherwise requires that the accused be given an opportunity of being heard before cognizance is taken. The Delhi High Court applied these directions through Practice Directions No. 157/Rules/DHC dated 6 November 2025.
Where the accused resides beyond the court’s territorial jurisdiction, the Magistrate must first hold an inquiry, now under Section 225 of the BNSS (formerly Section 202 CrPC), in which “evidence of witnesses on behalf of the complainant shall be permitted to be taken on affidavit” (In Re: Expeditious Trial of Cases Under Section 138 of N.I. Act 1881, 16 April 2021).
Punishment for cheque bounce, and is it bailable?
The maximum punishment under Section 138 is imprisonment for two years, or a fine of up to twice the amount of the cheque, or both. In a summary trial, the first proviso to Section 143(1) makes it “lawful for the Magistrate to pass a sentence of imprisonment for a term not exceeding one year and an amount of fine exceeding five thousand rupees”. If a sentence of more than one year may be needed, or a summary trial is undesirable for any other reason, the Magistrate must record an order to that effect and hear the case under the ordinary procedure (second proviso). The three-month limit for summary trials, now in Section 285(2) of the BNSS, does not cap these cases, because Section 143 applies the summary-trial provisions only “as far as may be” (In Re: Expeditious Trial, 2021).
In Rajesh Jain v. Ajay Singh (9 October 2023) the Supreme Court convicted the accused “with fine of twice the amount of the cheque”, Rs 13,90,408, with simple imprisonment for one year if it was not paid; in Ashok Singh (2025) it replaced imprisonment with a fine; and in Sanjabij Tari it said that “the accused under the said offence are entitled to benefit under the Probation of Offenders Act, 1958”.
Whether the offence is bailable comes from Part II of the First Schedule to the BNSS, “Classification of offences against other laws”, whose last entry makes an offence “punishable with imprisonment for less than 3 years or with fine only” non-cognizable and bailable. As the maximum under Section 138 is two years, the offence is non-cognizable and bailable; the Schedule’s column “Any Magistrate” gives way to Sections 142(1)(c) and 143(1) of the NI Act.
How a cheque bounce case runs in court
Section 143(1) applies the summary-trial provisions of the Code of Criminal Procedure, 1973. The BNSS repealed that Code from 1 July 2024 (Section 531(1)), and under Section 8(1) of the General Clauses Act, 1897 references to a repealed provision are read as references to the provision that re-enacts it, so the provisions now applied are Sections 285 to 288 of the BNSS (formerly Sections 262 to 265 CrPC); the Supreme Court now cites both, as in “Section 251 Cr.P.C. / Section 274 BNSS, 2023”. Trials pending immediately before 1 July 2024 continue under the old Code (Section 531(2)(a) of the BNSS).
The trial is to continue “from day to day until its conclusion”, so far as practicable (Section 143(2)), and “an endeavour shall be made to conclude the trial within six months from the date of filing of the complaint” (Section 143(3)). Summons may be sent by speed post or approved courier, and an endorsement that the accused refused delivery allows the court to declare them duly served (Section 144). The complainant’s evidence “may be given by him on affidavit”, and the court may, and on the application of the prosecution or the accused shall, summon and examine the person who gave it (Section 145).
In 2021 a bench of five judges took up the delays in a suo motu case, In Re: Expeditious Trial of Cases Under Section 138 of N.I. Act 1881 (order of 16 April 2021). It asked the High Courts to issue practice directions requiring Magistrates “to record reasons before converting trial of complaints under Section 138 of the Act from summary trial to summons trial”, and to treat service of summons in one complaint as deemed service in all the complaints before the same court about cheques issued as part of the same transaction. It held that trial courts have no inherent power to review or recall the issue of summons, and that Section 281 of the BNSS (formerly Section 258 CrPC, the provision the Court considered) does not apply to these complaints, so that Meters and Instruments Private Limited v. Kanchan Mehta, (2018) 1 SCC 560, “in so far as it conferred power on the Trial Court to discharge an accused is not good law”. It also recommended an amendment allowing one trial for Section 138 offences committed within twelve months. The firm’s post on the 2021 Supreme Court guidelines deals with that order.
The directions of 25 September 2025 in Sanjabij Tari go further. At the first stage after cognizance, the Magistrate may ask the accused, under Section 274 of the BNSS (formerly Section 251 CrPC, explained in the firm’s note on Section 251 CrPC), whether the cheque belongs to his account, whether the signature is his, whether he issued it to the complainant, whether he owed the liability when it was issued and, if not, what his defence is, and whether he wishes to compound the case; the answers are recorded in the order-sheet, and the court then decides whether the case is fit for summary trial. Trial courts must record “cogent and sufficient reasons before converting a summary trial to summons trial”, and once summons are served the cases are to be heard in physical courts, with exemptions from personal appearance granted only “when facts so warrant”.
The presumption under Section 139 and the accused’s defences
Section 139 provides: “It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.” Section 118(a) adds a general presumption that every negotiable instrument was made or drawn for consideration. In Rangappa the three-judge bench held that the Section 139 presumption “does indeed include the existence of a legally enforceable debt or liability”, while noting that it is “in the nature of a rebuttable presumption” (as quoted in Uttam Ram, 2019). In Sanjabij Tari the Court said that once the execution of the cheque is admitted, both presumptions arise against the accused, and that “the initial onus of proving that the cheque is not in discharge of any debt or other liability is on the accused/drawer of the cheque”. Even a signed blank cheque is covered: “mere admission of the drawer’s signature, without admitting the execution of the entire contents in the cheque, is now sufficient to trigger the presumption” (Rajesh Jain, following Bir Singh v. Mukesh Kumar).
The burden on the accused is lighter than the prosecution’s. In Rajesh Jain the Court said that the accused “must meet the standard of ‘preponderance of probabilities’, similar to a defendant in a civil proceeding”, which “may be even fifty one to forty nine”, judged from the whole case, including the complaint, the demand notice and the accused’s reply; once he shows on that standard that there was no debt or liability as pleaded, “the burden shifts to the complainant and the presumption ‘disappears’ and does not haunt the accused any longer”. He “can also rely on the materials submitted by the complainant in order to raise a probable defence”, and “It is not necessary for the accused to come in the witness box to support his defence” (Basalingappa v. Mudibasappa, (2019) 5 SCC 418, as quoted in Tedhi Singh v. Narayan Dass Mahant, 7 March 2022). A bare denial is not enough: “Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant” (Kumar Exports, as quoted in Uttam Ram).
Some arguments do not work. Section 140 rules out the defence that the drawer had no reason to believe that the cheque would bounce. In Sanjabij Tari the Court held that, where a loan was taken in cash in breach of Section 269SS of the Income-tax Act, 1961, “any violation of Section 269SS would not render the transaction unenforceable under Section 138 of the NI Act” (the 1961 Act has since been replaced by the Income-tax Act, 2025, with effect from 1 April 2026); it called the High Court’s finding that the defence of a signed blank cheque given to help the complainant obtain a loan from a bank was sufficient to rebut the presumptions “unbelievable and absurd”, agreeing with the Sessions Court that “The case of the accused is unbelievable”; and it criticised courts that were “directing the complainant to prove the antecedent debt or liability” instead of applying the presumptions. Not replying to the statutory notice also counts against the accused: it “leads to an inference that there is merit in the Appellant-Complainant’s version” (Sanjabij Tari, citing Tedhi Singh), an inference that, in the words of Ashok Singh, is “albeit rebuttable”.
Other defences come from the statute itself: that a condition of the proviso was not met (for example, the notice was late, or the drawer paid within the fifteen days), that the complaint was filed late and cognizance was taken before the delay was condoned (S. Nagesh, 2026), or, in a stop-payment case, that there were sufficient funds and a valid reason (MMTC, as quoted in Laxmi Dyechem). An objection that the court lacks jurisdiction under Section 142(2) does not end the case: under the 2021 order, once the trial court is informed that it lacks jurisdiction to issue process, “the proceedings shall be stayed and the case shall be submitted to the Chief Judicial Magistrate or such other Magistrate having jurisdiction”. What is usually tested in cross-examination is covered in the firm’s FAQ post.
Cheques issued by companies and firms
If the drawer is a company, Section 141(1) makes “every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company” guilty of the offence, unless he proves that it was committed without his knowledge or that he had exercised all due diligence to prevent it. A director, manager, secretary or other officer with whose consent or connivance, or through whose neglect, the offence was committed is also liable (Section 141(2)), but a director nominated because of an office or employment in the Central or State Government, or in a financial corporation owned or controlled by either, cannot be prosecuted under the Chapter. For this section a “company” includes “a firm or other association of individuals”, and a director of a firm means a partner. The firm’s FAQ post covers the Supreme Court’s rulings on making the company an accused and on insolvency.
Interim compensation under Section 143A
Section 143A was inserted by the Negotiable Instruments (Amendment) Act, 2018 with effect from 1 September 2018. It allows the court trying a Section 138 case to order the drawer to pay interim compensation to the complainant “in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint”, and “in any other case, upon framing of charge”. The amount “shall not exceed twenty per cent. of the amount of the cheque” and must be paid within sixty days of the order, extendable by up to thirty days for sufficient cause (Section 143A(2) and (3)). It can be recovered as if it were a fine under Section 461 of the BNSS (formerly Section 421 CrPC, the provision named in Section 143A(5)), and any fine imposed under Section 138, or compensation awarded under Section 395 of the BNSS (formerly Section 357 CrPC), is reduced by the amount paid or recovered (Section 143A(6)). If the drawer is acquitted, the complainant must repay it “with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year”, within sixty days, which the court may extend by up to thirty days (Section 143A(4)).
The power is not automatic. In Rakesh Ranjan Shrivastava v. State of Jharkhand (15 March 2024), the Supreme Court described Section 143A(1) as providing for “a drastic order for payment of interim compensation against the accused in a complaint under Section 138, even before any adjudication is made on the guilt of the accused”, and held that “the power under sub-section (1) of Section 143A is discretionary”. The court must evaluate both the complainant’s case and the defence prima facie: “The presumption under Section 139 of the N.I. Act, by itself, is no ground to direct the payment of interim compensation”; interim compensation can be ordered only if the complainant makes out a prima facie case; the accused’s financial distress can be considered; a prima facie plausible defence may justify refusal; and the court “must record brief reasons indicating consideration of all the relevant factors”. In that case the trial court had ordered a deposit of Rs 10,00,000 without considering these points, so the Supreme Court sent the application back to be decided afresh.
Section 143A does not apply to older offences. In G.J. Raja v. Tejraj Surana (30 July 2019) the Supreme Court held its applicability to be “prospective in nature and confined to cases where offences were committed after the introduction of Section 143A”, that is, after 1 September 2018 (as quoted in Surinder Singh Deswal v. Virender Gandhi, 8 January 2020). In current cases, the 2025 directions ask trial courts to use the power “as early as possible” wherever they consider it appropriate.
Appeal against conviction and the deposit under Section 148
Section 148, inserted by the same 2018 Act, applies when a convicted drawer appeals. The appellate court “may order the appellant to deposit such sum which shall be a minimum of twenty per cent. of the fine or compensation awarded by the trial Court”, in addition to any interim compensation already paid under Section 143A (Section 148(1)). The deposit is due within sixty days of the order, extendable by up to thirty days for sufficient cause (Section 148(2)). The appellate court may release it to the complainant while the appeal is pending, but if the appellant is acquitted, the complainant must repay it with interest at the Reserve Bank’s bank rate prevalent at the beginning of the relevant financial year (Section 148(3)).
In Surinder Singh Deswal v. Virender Gandhi, in a judgment of 29 May 2019 quoted in its later judgment of 8 January 2020, the Supreme Court explained that Parliament inserted Section 148 (in the Court’s words, it “thought it fit to amend Section 148”) having found that, “because of the delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings, the object and purpose of the enactment of Section 138 of the N.I. Act was being frustrated”. It held that the amended section applies to appeals “even in a case where the criminal complaints for the offence Under Section 138 of the N.I. Act were filed prior to amendment Act No. 20/2018 i.e., prior to 01.09.2018”, and that although the section says “may”, it “is generally to be construed as a ‘rule’ or ‘shall’”, so that not ordering a deposit is an exception for which special reasons must be given. The deposit may be ordered on the complainant’s application or on the appellant’s own application to suspend the sentence (now under Section 430 of the BNSS, formerly Section 389 CrPC). In that case the suspension had been made subject to a deposit of 25% of the compensation, and in its 2020 judgment the Court held that “non-compliance of the condition of suspension of sentence is sufficient to declare suspension of sentence as having been vacated”.
The exception is narrow. In Jamboo Bhandari v. Madhya Pradesh State Industrial Development Corporation Limited, as quoted in Rakesh Ranjan Shrivastava (2024), the Court said that “normally, the appellate court will be justified in imposing the condition of deposit as provided in Section 148”, but that where the appellate court is satisfied that the condition of deposit of 20% “will be unjust or imposing such a condition will amount to deprivation of the right of appeal of the appellant, exception can be made for the reasons specifically recorded”. Which court hears the appeal, and what a complainant can do after an acquittal, are explained in the firm’s FAQ post.
Settlement and compounding
A cheque bounce case can be settled at any stage. Section 147 provides that, notwithstanding anything in the Code of Criminal Procedure, “every offence punishable under this Act shall be compoundable”. In Sanjabij Tari the Supreme Court noted that in Gian Chand Garg v. Harpal Singh (11 August 2025) a bench of the Court had set aside concurrent convictions on the ground that the proceeding under Section 138 “is essentially a civil proceeding and it is open to the parties to enter into a voluntary compromise”, and it held that “not only a voluntary compromise can bring the proceedings under Section 138 NI Act to an end”, but that the accused are also entitled to the benefit of the Probation of Offenders Act, 1958, as noted above.
Because “Section 147 of the Act does not carry any guidance on how to proceed with the compounding of offences under the Act”, the Supreme Court laid down a graded scale of costs in Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663, explaining that “The graded scheme for imposing costs is a means to encourage compounding at an early stage of litigation” (as quoted in Sanjabij Tari). On 25 September 2025, in Sanjabij Tari, the Court decided that it was time to “revisit and tweak the guidelines”, “Since a very large number of cheque bouncing cases are still pending and interest rates have fallen in the last few years”. The two scales, as set out in that judgment, compare as follows:
| When the accused pays or seeks compounding | Damodar S. Prabhu, (2010) 5 SCC 663 | Sanjabij Tari (2025), now applicable |
|---|---|---|
| Early in the trial | No costs if compounding is sought at the first or second hearing | No cost or penalty if the cheque amount is paid before the defence evidence is recorded |
| Later, before the Magistrate | 10% of the cheque amount, deposited with the Legal Services Authority or another authority the court deems fit | An additional 5% of the cheque amount, with the Legal Services Authority or another authority the court deems fit, if paid after the defence evidence but before judgment |
| Sessions Court or High Court, in revision or appeal | 15% of the cheque amount as costs | 7.5% of the cheque amount as costs |
| Supreme Court | 20% of the cheque amount | 10% of the cheque amount |
The 2025 directions also bring settlement forward. Each District Court is to provide online payment “through secure QR codes or UPI links”, and the summons tells the accused that he may pay the cheque amount “at the initial stage itself”; once the complainant confirms receipt, the court may pass orders on releasing the money and on “compounding/closure of proceedings under Section 147 of the NI Act and/or Section 255 of Cr.P.C./278 BNSS, 2023”. If the accused is willing to pay in accordance with the revised guidelines, the court may suggest compounding to the parties; and if, for any reason, the complainant “asks for payment other than the cheque amount or settlement of entire loan or other outstanding dues”, the Magistrate may suggest that the accused plead guilty, and may then exercise the powers in Section 278 of the BNSS (formerly Section 255 CrPC) or give him the benefit of the Probation of Offenders Act, 1958 (Sanjabij Tari, paragraph 39).
A complainant who has been paid can also withdraw the complaint. Under Section 280 of the BNSS (formerly Section 257 CrPC), if he satisfies the Magistrate, “at any time before a final order is passed”, that there are sufficient grounds for permitting the withdrawal, the Magistrate may permit it “and shall thereupon acquit the accused against whom the complaint is so withdrawn”; summary trials follow the procedure for summons cases (Section 285(1) of the BNSS). The Magistrate has no power, however, to discharge the accused simply because he tenders the cheque amount with interest and costs: the Supreme Court rejected that view, taken in Meters and Instruments, in 2021. It is therefore sensible to record the terms of any settlement in writing and file them in court.
Recovering the money in a civil suit
A complaint under Section 138 can lead to the drawer’s punishment; the payee can also sue for the money. Section 30 provides that the drawer of a cheque “is bound, in case of dishonour by the drawee or acceptor thereof, to compensate the holder, provided due notice of dishonour has been given to, or received by, the drawer as hereinafter provided”; the Act’s rules on such notice are in Chapter VIII, “Of notice of dishonour”. Under Section 117(a), “the holder is entitled to the amount due upon the instrument together with the expenses properly incurred in presenting, noting and protesting it”, and where the cheque specifies no rate of interest, Section 80 provides for interest at “eighteen per centum” per annum from the date on which the amount ought to have been paid.
A cheque “is a bill of exchange drawn on a specified banker” (Section 6), and Order XXXVII of the Code of Civil Procedure, 1908, the summary procedure, applies to “suits upon bills of exchange, hundies and promissory notes” (rule 1(2)(a)), in the High Courts, City Civil Courts and Courts of Small Causes and, subject to the High Court’s power to restrict it by notification, in other courts (rule 1(1)). The plaint must state that the suit is filed under the Order and carry the inscription “(Under Order XXXVII of the Code of Civil Procedure, 1908)” (rule 2(1)); the firm’s guide to the summary suit under Order XXXVII of the CPC explains the procedure. If a criminal court has already ordered compensation under Section 395 of the BNSS (formerly Section 357 CrPC), a civil court awarding compensation in a later suit relating to the same matter “shall take into account any sum paid or recovered as compensation under this section” (Section 395(5)).
How long does a cheque bounce case take?
The Act sets a target, not a deadline: under Section 143(3), “an endeavour shall be made to conclude the trial within six months from the date of filing of the complaint”. In practice the courts are far behind. The 2021 suo motu case arose from a special leave petition about two cheques dishonoured on 27 January 2005 for Rs 1,70,000, of which the Supreme Court said: “The dispute has remained pending for the past 16 years.” It recorded that, as on 31 December 2019, 35.16 lakh of the 2.31 crore criminal cases then pending concerned Section 138. In Sanjabij Tari the Court recorded, from the National Judicial Data Grid, that 6,50,283 Section 138 cases were pending in the Delhi District Courts on 1 September 2025, making up 49.45% of the total pendency in Delhi’s trial courts.
The firm has found no official figure for how long a typical case takes. The Supreme Court has identified service of summons on the accused as “one of the main reasons for the delay in disposal of the complaints”. A case can end much sooner if the accused pays: the summons now tells him that he may pay the cheque amount online at the initial stage, and compounding before the defence evidence is recorded costs nothing extra.
चेक बाउंस का मामला – हिंदी में
चेक बाउंस का मामला परक्राम्य लिखत अधिनियम, 1881 (Negotiable Instruments Act, 1881) की धारा 138 के तहत किया जाने वाला आपराधिक परिवाद (complaint) है। अधिनियम के आधिकारिक हिंदी पाठ में धारा 138 का शीर्षक है: “खातों में अपर्याप्त निधियों, आदि के कारण चेक का अनादरण”; इसमें चेक जारी करने वाले को लेखीवाल और जिसके नाम चेक है उसे पाने वाला कहा गया है। यदि किसी ऋण या अन्य दायित्व के भुगतान के लिए दिया गया चेक इस कारण बिना भुगतान लौट आए कि खाते में जमा राशि अपर्याप्त है या चेक की रकम बैंक के साथ तय व्यवस्था से अधिक है, और नीचे दी गई तीन शर्तें पूरी हों, तो लेखीवाल के बारे में यह समझा जाता है कि उसने अपराध किया है। स्पष्टीकरण के शब्दों में, “‘ऋण या अन्य दायित्व’ से विधित: प्रवर्तनीय ऋण या अन्य दायित्व अभिप्रेत है”। अधिनियम का शब्द अनादरण (dishonour) है, धोखाधड़ी (fraud) नहीं। यह पृष्ठ केवल धारा 138 के अपराध के बारे में है; कोई अन्य अपराध भी बनता है या नहीं, यह यहाँ शामिल नहीं है।
पहली शर्त: चेक लिखे जाने की तारीख से छह मास के भीतर या उसकी विधिमान्यता की अवधि के भीतर, जो भी पहले हो, बैंक में प्रस्तुत किया गया हो; भारतीय रिज़र्व बैंक के 4 नवंबर 2011 के परिपत्र के अनुसार 1 अप्रैल 2012 या उसके बाद की तारीख वाला चेक तीन महीने के भीतर प्रस्तुत करना होता है; रिज़र्व बैंक ने 28 नवंबर 2025 को अपने निर्देशों को Master Directions में समेकित किया है, इसलिए वर्तमान शब्द उन्हीं में देखने चाहिए। दूसरी: पाने वाला या सम्यक् अनुक्रम में धारक, बैंक से चेक लौटने की सूचना मिलने के तीस दिन के भीतर, लेखीवाल को लिखित नोटिस देकर रकम की मांग करे। तीसरी: लेखीवाल नोटिस मिलने के पंद्रह दिन के भीतर भुगतान न करे; इन पंद्रह दिनों में भुगतान हो जाए तो अपराध नहीं बनता। इसके बाद धारा 142(1)(ख) के अनुसार परिवाद एक मास के भीतर करना होता है; देरी होने पर पर्याप्त कारण दिखाना होता है, और सुप्रीम कोर्ट (एस. नागेश, 2026) के अनुसार देरी की माफी संज्ञान लेने से पहले होनी चाहिए।
खाते के माध्यम से जमा किए गए चेक का परिवाद उस न्यायालय में होगा जिसकी स्थानीय अधिकारिता में पाने वाले की वह बैंक शाखा है जहाँ उसका खाता है (धारा 142(2)(क); जय बालाजी इंडस्ट्रीज़, सुप्रीम कोर्ट, 2025), और विचारण केवल महानगर मजिस्ट्रेट या प्रथम वर्ग न्यायिक मजिस्ट्रेट कर सकता है। संजाबिज तारी (2025) के बाद हर परिवाद की शुरुआत तय प्रारूप के सारांश (synopsis) से होती है, और आरोपी का ई-मेल, मोबाइल नंबर या व्हाट्सऐप विवरण शपथपत्र के साथ देना होता है।
धारा 138 में दो वर्ष तक के कारावास, या चेक की रकम के दुगुने तक जुर्माने, या दोनों का प्रावधान है। भारतीय नागरिक सुरक्षा संहिता, 2023 (BNSS) की पहली अनुसूची के भाग II के अनुसार तीन वर्ष से कम कारावास से दंडनीय अपराध असंज्ञेय (non-cognizable) और जमानतीय (bailable) होते हैं, इसलिए यह अपराध भी असंज्ञेय और जमानतीय है। बैंक के रिटर्न मेमो पर “account closed”, “payment stopped” या “referred to the drawer” लिखा हो, या हस्ताक्षर मेल न खाते हों, तब भी नोटिस और पंद्रह दिन वाली शर्तें पूरी होने पर धारा 138 का मामला बन सकता है (लक्ष्मी डाइकेम, सुप्रीम कोर्ट, 2012)।
धारा 139 के अनुसार यह उपधारणा (presumption) की जाती है कि चेक किसी ऋण या अन्य दायित्व के उन्मोचन के लिए प्राप्त किया गया था; लेखीवाल का केवल अपने हस्ताक्षर स्वीकार करना भी इसके लिए काफी है, चाहे उसका कहना हो कि उसने कोरा (blank) चेक हस्ताक्षर करके दिया था। सुप्रीम कोर्ट के अनुसार आरोपी इस उपधारणा का खंडन अधिसंभावनाओं की प्रबलता (preponderance of probabilities) के स्तर पर, परिवादी की अपनी सामग्री के आधार पर भी, कर सकता है, और इसके लिए उसका स्वयं गवाही देना ज़रूरी नहीं है।
धारा 143क के तहत विचारण न्यायालय अंतरिम प्रतिकर (interim compensation) का आदेश दे सकता है; आधिकारिक पाठ के अनुसार “अंतरिम प्रतिकर चेक की रकम के बीस प्रतिशत से अधिक नहीं होगा”, और सुप्रीम कोर्ट (राकेश रंजन श्रीवास्तव, 2024) के अनुसार यह शक्ति विवेकाधीन है। दोषसिद्धि के विरुद्ध अपील में अपील न्यायालय धारा 148 के तहत जुर्माने या प्रतिकर का कम से कम बीस प्रतिशत जमा कराने का आदेश दे सकता है। धारा 147 के अनुसार “इस अधिनियम के अधीन दंडनीय प्रत्येक अपराध शमनीय होगा”; संजाबिज तारी (2025) के अनुसार बचाव पक्ष का साक्ष्य दर्ज होने से पहले चेक की रकम चुका देने पर अपराध के शमन (compounding) की कोई लागत नहीं लगती, जबकि उसके बाद किंतु निर्णय से पहले अतिरिक्त 5%, सत्र न्यायालय या हाई कोर्ट में 7.5% और सुप्रीम कोर्ट में 10% लागत लगती है। पाने वाला सिविल प्रक्रिया संहिता, 1908 के आदेश XXXVII के तहत संक्षिप्त वाद (summary suit) से भी रकम वसूल कर सकता है, क्योंकि धारा 6 के अनुसार चेक एक विनिमय-पत्र है।
Frequently asked questions
Keep the returned cheque and the bank’s return memo, which the court treats as evidence of the dishonour (Section 146 of the Negotiable Instruments Act, 1881). You may ask the drawer to pay, but send a written demand notice within thirty days of the bank’s information about the return (Section 138(b)). If he does not pay within fifteen days of receiving it, file a written complaint within one month, beginning with the synopsis the Supreme Court prescribed in 2025; for a cheque deposited through your account, the complaint goes to the court where your home branch is situated (Section 142).
Present the cheque within six months of its date or within its validity, whichever is earlier (Section 138(a) of the Negotiable Instruments Act, 1881); under the Reserve Bank of India’s circular of 4 November 2011, that means three months for cheques dated on or after 1 April 2012 (the Reserve Bank has since consolidated its circulars into Master Directions, where the current wording should be checked). Send the written demand notice within thirty days of the bank’s information about the return; the drawer then has fifteen days from receiving it to pay. File the complaint within one month after that (Section 142(1)(b)); a later complaint needs sufficient cause, and the delay must be condoned before cognizance is taken (S. Nagesh v. Shobha S. Aradhya, Supreme Court, 2026).
Yes. Every offence under the Negotiable Instruments Act, 1881 is compoundable (Section 147), and the Supreme Court has said that a voluntary compromise can end a Section 138 case (Sanjabij Tari v. Kishore S. Borcar, 2025). If a complaint is pending, the court may allow compounding or permit the complainant to withdraw it, which leads to acquittal (Section 280 of the BNSS, formerly Section 257 CrPC). Payment before the defence evidence is recorded costs nothing extra; after that it costs an additional 5% before judgment, 7.5% in the Sessions Court or High Court and 10% in the Supreme Court. Record the terms in writing and file them in court.
Section 143(3) of the Negotiable Instruments Act, 1881 says that an endeavour shall be made to conclude the trial within six months of the filing of the complaint, but the courts are far behind: 6,50,283 Section 138 cases were pending in the Delhi District Courts alone on 1 September 2025 (Sanjabij Tari, Supreme Court, 2025). The firm has found no official figure for a typical case. Payment of the cheque amount at the initial stage, which the 2025 directions allow online, can end a case early.
Only when every statutory condition is met: a cheque drawn on the drawer’s own account for a legally enforceable debt or other liability is returned unpaid for insufficient funds or for exceeding the arrangement with the bank (or for a reason treated in the same way, such as “account closed” or “payment stopped”), after being presented within six months or within its validity, whichever is earlier; a written demand notice is sent within thirty days of the bank’s information; and the drawer does not pay within fifteen days of receiving it. If he pays within those fifteen days, no offence is made out.
It is a criminal case: under Section 138 of the Negotiable Instruments Act, 1881 the drawer “shall be deemed to have committed an offence”, punishable with imprisonment, fine or both. The Supreme Court has, however, called it “a regulatory offence” largely in the nature of a civil wrong (Rangappa v. Sri Mohan, as quoted in Uttam Ram, 2019) and “quasi-criminal in character” (Sanjabij Tari, 2025). The Act speaks of dishonour, not fraud, and it is no defence that the drawer had no reason to believe that the cheque would bounce (Section 140). This answer deals only with the offence under Section 138, not with whether any other offence is also made out.
Imprisonment for up to two years, or a fine of up to twice the amount of the cheque, or both (Section 138 of the Negotiable Instruments Act, 1881); in a summary trial the Magistrate may impose imprisonment of up to one year and a fine exceeding five thousand rupees (Section 143(1)). Because the maximum imprisonment is less than three years, the offence is non-cognizable and bailable under Part II of the First Schedule to the Bharatiya Nagarik Suraksha Sanhita, 2023. Only a Metropolitan Magistrate or a Judicial Magistrate of the first class can try it.
Yes. In Laxmi Dyechem v. State of Gujarat (27 November 2012), the Supreme Court held that dishonour for reasons such as “account closed”, “payment stopped” and “referred to the drawer” are “only species of that genus”, the genus being insufficient funds under Section 138 of the Negotiable Instruments Act, 1881. The written demand notice and the drawer’s failure to pay within fifteen days of receiving it are still needed, and the drawer can contest the debt at the trial.
That does not avoid Section 138 of the Negotiable Instruments Act, 1881: in Laxmi Dyechem (2012) the Supreme Court held that dishonour because payment was stopped attracts the section, whether or not the stoppage was with notice to the drawer and whether or not it was due to insufficient funds. On this ground the drawer escapes if he proves that there were sufficient funds when the cheque was presented and that payment was stopped for other valid causes, such as there being no existing debt or liability (MMTC, as quoted in Laxmi Dyechem); the other defences, such as a missing statutory condition, remain open to him.
Both can lead to a case under Section 138 of the Negotiable Instruments Act, 1881. In Laxmi Dyechem (2012) the Supreme Court treated “account closed” as a species of insufficient funds, and held that dishonour because the “signatures do not match” or the “image is not found” also “would constitute a dishonour within the meaning of Section 138 of the Act”. A change of signatories in the ordinary course of business “may not constitute an offence by itself”: the notice and the chance to pay must follow.
It is prima facie proof of the dishonour only: on production of the bank’s slip or memo bearing the official mark, the court presumes the fact of dishonour “unless and until such fact is disproved” (Section 146 of the Negotiable Instruments Act, 1881). The complainant must still show the other conditions, such as presentation in time, the demand notice within thirty days and non-payment within fifteen days of its receipt (Ashok Singh v. State of Uttar Pradesh, Supreme Court, 2025).
It counts against the drawer. In Sanjabij Tari v. Kishore S. Borcar (2025) the Supreme Court said that failure to reply to the statutory notice “leads to an inference that there is merit in the Appellant-Complainant’s version”, though the inference can be rebutted at the trial. As the Court summarised Tedhi Singh (2022), the accused has the initial burden to set up in his reply the defence that the complainant did not have the financial capacity to advance the loan.
Yes. In Rajesh Jain v. Ajay Singh (2023), following Bir Singh v. Mukesh Kumar, the Supreme Court said that admitting the signature on a cheque, without admitting the rest of its contents, is enough to trigger the presumption under Section 139 of the Negotiable Instruments Act, 1881, even where the accused says that he voluntarily signed a blank cheque leaf and handed it over. He can still rebut the presumption with a probable defence.
Yes. The presumption under Section 139 of the Negotiable Instruments Act, 1881 is rebuttable on a “preponderance of probabilities”, and the accused may rely on the complainant’s own material without entering the witness box (Rajesh Jain v. Ajay Singh, 2023; Basalingappa v. Mudibasappa, as quoted in Tedhi Singh, 2022). He may also succeed if a statutory condition is missing, such as a late notice, payment within the fifteen days, or a late complaint on which cognizance was taken before the delay was condoned.
Usually, yes. Under Section 148(1) of the Negotiable Instruments Act, 1881, the appellate court may order a convicted drawer to deposit at least 20% of the fine or compensation awarded by the trial court. The Supreme Court reads “may” as generally a rule, even for complaints filed before 1 September 2018 (Surinder Singh Deswal, judgment of 29 May 2019, as quoted in its judgment of 8 January 2020), with an exception only for reasons specifically recorded where the deposit would be unjust or would deprive the appellant of his right of appeal (Jamboo Bhandari, as quoted in Rakesh Ranjan Shrivastava, 2024).
Yes. The drawer is bound to compensate the holder on dishonour, provided due notice of dishonour has been given (Section 30 of the Negotiable Instruments Act, 1881), and the holder can claim the amount due on the cheque with the expenses properly incurred in presenting, noting and protesting it (Section 117(a)), plus interest at eighteen per cent per annum where no rate is specified (Section 80). Because a cheque is a bill of exchange (Section 6), the suit can be brought under the summary procedure of Order XXXVII of the Code of Civil Procedure, 1908.
The Negotiable Instruments Act, 1881 was not amended in 2021: the latest amendments shown in its India Code text were made in 2018, inserting Sections 143A and 148. In 2021 a five-judge bench of the Supreme Court, in In Re: Expeditious Trial of Cases Under Section 138 of N.I. Act 1881 (16 April 2021), asked the High Courts to require Magistrates to record reasons before converting a summary trial into a summons trial, and held that Section 281 of the BNSS (formerly Section 258 of the Code of Criminal Procedure, the provision it considered) does not apply to these complaints. The more recent procedural changes come from the directions of 25 September 2025 in Sanjabij Tari v. Kishore S. Borcar.
Conclusion
A bounced cheque becomes a criminal case under Section 138 of the Negotiable Instruments Act, 1881 only through a fixed sequence: presentation within the cheque’s validity, a written demand notice within thirty days of the bank’s information about the return, fifteen days for the drawer to pay, and a complaint within one month, which for a cheque deposited through an account is filed in the court of the payee’s home branch. Once a case is filed, the presumption under Section 139 favours the complainant, but the accused can rebut it on a preponderance of probabilities, and bank remarks such as “account closed”, “payment stopped” or “referred to the drawer” do not by themselves defeat a complaint.
The law also pushes both sides towards payment: interim compensation of up to 20% of the cheque amount during the trial, a deposit of at least 20% of the fine or compensation on appeal, and compounding costs that rise from nothing before the defence evidence to 10% of the cheque amount in the Supreme Court. For a drawer, paying within the fifteen days after the notice avoids the offence altogether; for a payee, a summary suit under Order XXXVII of the Code of Civil Procedure is available as well as the complaint.
Century Law Firm, Delhi, acts in cheque bounce cases under Section 138 of the Negotiable Instruments Act, 1881 in the Delhi courts, from the demand notice and the complaint to the trial, settlement and appeal, and in summary suits under Order XXXVII of the Code of Civil Procedure for the recovery of cheque amounts. To discuss a matter, see the firm’s practice areas page.
Sources used for this post: the Negotiable Instruments Act, 1881, Sections 6, 7, 9, 30, 80, 92, 117, 118 and 138 to 148 and the heading of Chapter VIII, with their amendment notes (India Code English text, and India Code’s official Hindi text for the Hindi section; Section 138 as reproduced by the Supreme Court in Ashok Singh v. State of Uttar Pradesh); the Bharatiya Nagarik Suraksha Sanhita, 2023, Sections 223, 225, 274, 278, 280, 281, 285, 395, 430, 461 and 531 and Part II of the First Schedule (India Code text as on 6 October 2025), with the firm’s section-by-section comparison with the Code of Criminal Procedure, 1973; the General Clauses Act, 1897, Sections 6A and 8; the Repealing and Amending Act, 2025, Sections 2 and 4 and the First Schedule; the Code of Civil Procedure, 1908, Order XXXVII, rules 1 and 2 (India Code text as on 10 January 2026); the Reserve Bank of India’s circular of 4 November 2011, its model list of objections, and its press release of 28 November 2025 and circular RBI/2025-26/100 of the same date on the consolidation of its instructions into Master Directions (the Reserve Bank’s website); the Ministry of Finance’s press release of 1 April 2026 on the coming into force of the Income-tax Act, 2025 (PIB) and the Income Tax Department’s statement that the Income-tax Act, 1961 stands repealed from that date; the Delhi High Court’s Practice Directions No. 157/Rules/DHC dated 6 November 2025; and the Supreme Court’s judgments in In Re: Expeditious Trial of Cases Under Section 138 of N.I. Act 1881 (16 April 2021), Sanjabij Tari v. Kishore S. Borcar (25 September 2025), M/s Laxmi Dyechem v. State of Gujarat (27 November 2012), Ashok Singh v. State of Uttar Pradesh (2 April 2025), Jai Balaji Industries Ltd. v. M/s HEG Ltd. (28 November 2025), S. Nagesh v. Shobha S. Aradhya (6 January 2026), Rajesh Jain v. Ajay Singh (9 October 2023), Uttam Ram v. Devinder Singh Hudan (17 October 2019), Tedhi Singh v. Narayan Dass Mahant (7 March 2022), Rakesh Ranjan Shrivastava v. State of Jharkhand (15 March 2024) and Surinder Singh Deswal v. Virender Gandhi (8 January 2020), all read in the Supreme Court’s own copies. The other judgments mentioned (Rangappa v. Sri Mohan, Damodar S. Prabhu v. Sayed Babalal H., Meters and Instruments Private Limited v. Kanchan Mehta, Modi Cements v. Kuchil Kumar Nandi, NEPC Micon v. Magma Leasing, MMTC v. Medchl Chemicals and Pharma, Goaplast v. Chico Ursula D’souza, Basalingappa v. Mudibasappa, Kumar Exports, Bir Singh v. Mukesh Kumar, P. Mohanraj v. Shah Brothers Ispat, Gian Chand Garg v. Harpal Singh, Dashrath Rupsingh Rathod v. State of Maharashtra, Yogesh Upadhyay, G.J. Raja v. Tejraj Surana, Jamboo Bhandari and the Deswal judgment of 29 May 2019) are cited only as quoted or described in those judgments.
