Cheque Dishonour Complaint under Section 138 NI Act: Notice, Time Limit, Jurisdiction and Filing Procedure
When a cheque issued towards a legally enforceable debt or other liability is dishonoured, the payee or holder in due course must follow the statutory sequence under Section 138 of the Negotiable Instruments Act, 1881. Missing a mandatory step or limitation period can affect the maintainability of the complaint.
When does Section 138 of the Negotiable Instruments Act apply?
Section 138 applies where a cheque drawn by a person on an account maintained by that person is returned unpaid and the statutory requirements are satisfied. The cheque must have been issued for discharge, wholly or partly, of a legally enforceable debt or other liability. The Act provides punishment that may extend to imprisonment for two years, or fine up to twice the cheque amount, or both.
1. Present the cheque within the validity period
The cheque should be presented within the period specified in Section 138 and, in practice, within the banking validity applicable to the instrument. Under current Reserve Bank of India directions, banks should not make payment of cheques, drafts, pay orders or banker's cheques presented beyond three months from the date of the instrument.
2. Collect the dishonoured cheque and bank return memo
If the cheque is returned unpaid, obtain the original cheque and the bank return memo or dishonour memo showing the reason for return. Section 146 of the Negotiable Instruments Act gives evidentiary significance to the bank's slip or memo bearing the official mark denoting dishonour.
3. Send the statutory demand notice within 30 days
The payee or holder in due course must make a written demand for payment of the cheque amount by giving notice to the drawer within 30 days from receipt of information from the bank regarding return of the cheque as unpaid.
The notice should clearly identify the cheque, the dishonour, and the demand for payment of the cheque amount. Preserve proof of dispatch, delivery, refusal, return or other service-related material. Legal assistance is advisable where facts, service, limitation or liability may be disputed.
4. Allow 15 days after receipt of notice
The drawer gets 15 days from receipt of the statutory notice to make payment of the cheque amount. If full payment is made within this statutory period, the offence under Section 138 does not become complete on that cause of action.
5. File the complaint within the prescribed limitation period
If the drawer fails to pay within 15 days after receipt of the notice, the cause of action arises after expiry of that period. Under Section 142, the complaint should ordinarily be filed within one month from the date on which the cause of action arises. The court may take cognizance after that period if the complainant satisfies the court that there was sufficient cause for the delay.
The complaint must be in writing by the payee or the holder in due course and is triable by the court specified in Section 142 of the Negotiable Instruments Act.
Which court has jurisdiction to hear a Section 138 complaint?
Territorial jurisdiction is governed by Section 142(2), not merely by a general statement that the complaint may be filed wherever any part of the cause of action occurred.
| Mode of presentation | Relevant territorial jurisdiction |
|---|---|
| Cheque delivered for collection through an account | The court within whose local jurisdiction the branch of the bank where the payee or holder in due course maintains the account is situated. |
| Cheque presented for payment otherwise than through an account | The court within whose local jurisdiction the branch of the drawee bank where the drawer maintains the account is situated. |
Basic documents commonly required for a Section 138 complaint
- Memo of parties / cause title.
- Complaint under Section 138 of the Negotiable Instruments Act, 1881.
- Complainant's affidavit / pre-summoning evidence, where required or filed under the applicable procedure.
- List of witnesses.
- List of documents with relied-upon documents.
- Vakalatnama or other authority in favour of counsel, where represented through an advocate.
Supporting documents to keep ready
- Original dishonoured cheque.
- Original or duly available bank return/dishonour memo.
- Copy of the statutory legal demand notice.
- Postal, courier or other permitted dispatch receipt and tracking/service proof.
- Returned envelope, refusal endorsement, delivery record or other proof relevant to service, if available.
- Documents establishing the underlying legally enforceable debt or liability.
- Authority letter, board resolution or other authorization where the complainant is a company, firm or other juristic entity.
- Limitation calculation or application for condonation of delay, if required.
Evidence, summary procedure and settlement
Section 145 permits the complainant's evidence to be given by affidavit, subject to the statutory provisions concerning examination. Section 143 provides for summary trial of Section 138 cases subject to the Act, and Section 147 makes offences under the Negotiable Instruments Act compoundable. Section 143A also empowers the trial court, in the circumstances specified by law, to consider interim compensation.
Can the cheque be presented again?
A dishonoured cheque may, depending on the facts, be presented again while it remains valid. However, re-presentation should not be treated as a substitute for carefully calculating the statutory periods connected with the dishonour on which the complainant proposes to rely. Each case should be assessed on its dates and documents.
Official legal resources
India Code
- Negotiable Instruments Act, 1881
Reserve Bank of India - official banking directions and circulars
Supreme Court of India - judgments and orders
This page provides general legal information. Filing dates, service issues, liability, authorization, territorial jurisdiction and court practice can depend on the facts of a particular matter.