Cheque Bounce and Recovery
Proceedings under the Negotiable Instruments Act and recovery of dues.
Practice area
Cheque Bounce and Recovery
Proceedings under the Negotiable Instruments Act and recovery of dues.
This area has a detailed section with its own service pages. Go to Cheque Bounce and Recovery.
Understanding Cheque Bounce and Recovery
A dishonoured cheque raises two separate remedies at once. There is a complaint under section 138 of the Negotiable Instruments Act, 1881, which is a criminal proceeding against the drawer; and there is a civil claim for the money itself. They are not alternatives and are frequently pursued together, but they are governed by different procedures and different timelines.
The section 138 route is unusually time-sensitive. The demand notice must go out within a defined period of the bank's intimation of dishonour, the drawer must be allowed a fixed period to pay, and the complaint must be filed within a further fixed period after that. Miss one of those windows and the criminal remedy can be lost even though the debt is undisputed.
Matters covered and detailed guidance
Documents to prepare
Bring the records that explain your situation. The precise documents depend on the facts; the following is a starting point.
- Agreements, deeds, notices or orders relevant to the matter
- A dated account of the events and the parties involved
- Correspondence, acknowledgements and payment records
- Earlier proceedings, filings and advice where available
- Original documents for verification when requested
How a matter is assessed
The first step is to identify the issue, the relevant documents and the result you need. The applicable law, available procedure, responsible authority and any time-sensitive requirements are then considered on those facts.
Advice, document preparation, correspondence and representation are different tasks. The scope of any engagement is discussed before work begins. No outcome can be promised, and an initial enquiry does not create an advocate–client relationship.
Common questions
The cheque bounced. How quickly do I have to act?
Quickly. The scheme under section 138 works on defined periods — a demand notice within thirty days of receiving intimation of dishonour, fifteen days for the drawer to pay, and a complaint within one month after that. The dates are counted from your specific documents, so the return memo and the notice should be looked at without delay.
Can I claim the money and file the complaint at the same time?
Yes. A section 138 complaint is a criminal proceeding; recovery of the debt is a civil claim. Running both is common, and which to begin with is a practical decision taken on the facts.
The cheque was given only as security. Does that help me?
It is frequently argued and is not a complete answer by itself. Much turns on what the cheque was actually issued for and what the documents and correspondence show. It is a defence to be assessed on the papers, not assumed.