Cheques are still widely used in India for business and personal payments. However, dishonour of cheques—popularly called “cheque bounce”—is a common issue today. To protect trust in cheque transactions, the law has made cheque bounce a criminal offence under Section 138 of the Negotiable Instruments Act, 1881.
If you are facing a cheque bounce issue in Lucknow, whether as a complainant or as an accused, understanding your legal rights is crucial.
What is Section 138 NI Act?
Section 138 deals with the offence of cheque dishonour. In simple terms, if a cheque is issued towards payment of a legally enforceable debt or liability but is returned unpaid due to insufficient funds or other reasons, the drawer (issuer) can be prosecuted.
This provision ensures that cheques remain a reliable mode of payment.
Conditions for Filing a Cheque Bounce Case
A cheque bounce case can be filed only if the following conditions are met:
- The cheque must be issued for discharge of a legally enforceable debt or liability.
- It must be presented to the bank within 3 months of issue (or validity period).
- The cheque is returned unpaid for reasons such as insufficient funds or account closed.
- The payee (complainant) sends a legal notice for cheque bounce within 30 days of receiving the bank’s return memo.
- The drawer fails to pay the cheque amount within 15 days of receiving the notice.
Only when these steps are followed can a complaint under Section 138 be filed in court.
Punishment under Section 138 NI Act
If convicted in a cheque bounce case, the drawer may face:
- Imprisonment up to 2 years, or
- Fine up to twice the cheque amount, or
- Both
This makes cheque bounce not just a financial dispute but also a criminal offence.
Procedure in a Cheque Bounce Case in Lucknow
- Cheque dishonour → Bank issues return memo.
- Legal notice → To be sent within 30 days.
- 15 days grace → For the drawer to make payment.
- Filing complaint → If payment is not made, a complaint can be filed in court within one month after expiry of the 15 days.
Important Court Rulings on Cheque Bounce
- NEPC Micon Ltd. v. Magma Leasing Ltd. (1999): “Stop payment” instructions can still attract Section 138.
- Laxmi Dyechem v. State of Gujarat (2012): Dishonour due to “account closed” or “payment stopped” is also covered.
- Dashrath Rupsingh Rathod (2014): Jurisdiction lies where the cheque is presented (amended later to favour the complainant).
Why Hire a Cheque Bounce Lawyer in Lucknow?
- Handling cheque bounce cases requires strict adherence to timelines and legal procedure. A skilled cheque bounce lawyer in Lucknow can help you:
- Draft and send a valid legal notice for cheque bounce.
- File a complaint under Section 138 NI Act within limitation.
- Defend you in case you are accused in a cheque bounce case.
- Represent you in court to ensure quick resolution.
Conclusion
Cheque bounce cases under Section 138 NI Act can be stressful, but with the right legal guidance, you can protect your rights. Whether you want to recover your money or defend yourself against a complaint, timely legal action is the key.
