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Cheque Bounce / Dishonoured Cheque

Someone gave you a cheque that bounced. You want to recover the money through legal means.

Do this now
  1. 01Collect the cheque return memo from your bank
  2. 02Send a legal demand notice within 30 days of return memo
  3. 03Send notice by registered post / speed post with AD
  4. 04Wait 15 days for the person to pay
  5. 05If no payment in 15 days, file complaint within next 30 days
  6. 06File complaint in the court within whose jurisdiction the cheque was presented
  7. 07Keep all original documents safe
Evidence to collect
  1. Original bounced cheque
  2. Cheque return memo from bank
  3. Copy of the demand notice sent
  4. Postal receipt and AD card
  5. Underlying transaction proof (invoice, agreement, etc.)
  6. Bank statement showing cheque deposit and return
Documents you need
  1. Criminal complaint under Section 138 NI Act
  2. Original bounced cheque
  3. Cheque return memo
  4. Demand notice copy with postal receipt
  5. Proof of underlying transaction
  6. ID proof
Where to complain
  1. Magistrate Court — Where cheque was presented for payment
  2. Lawyer for drafting demand notice
  3. Mediation Centre — For settlement
Laws that apply
  1. Negotiable Instruments Act — Section 138 (Cheque dishonour)
  2. Negotiable Instruments Act — Section 141 (Offences by companies)
  3. Negotiable Instruments Act — Section 142 (Limitation period)
  4. Negotiable Instruments Act — Section 143 (Power of court)
  5. BNS Section 318 — Cheating (if fraud involved)
Understanding the issue

When a cheque is dishonoured (bounced) due to insufficient funds or other reasons, it is a criminal offence under Section 138 of the Negotiable Instruments Act. You must send a legal demand notice within 30 days of receiving the bank's 'cheque return memo'. If the person doesn't pay within 15 days of receiving the notice, you can file a criminal complaint within 30 days after the 15-day notice period expires. The court can order payment of twice the cheque amount as compensation.

When to see a lawyer

Consult a lawyer immediately after the cheque bounces. The legal notice and complaint have strict time limits — missing them means losing your right to prosecute.