Cheque Bounce Notice (Section 138 NI Act)

iGuideline Summary

A cheque bounce notice (also called demand notice) is a mandatory prerequisite before filing a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881. When a cheque is dishonoured (bounced) for "insufficient funds" or "account closed", the payee must send a written demand notice to the drawer within 30 days of receiving the bank's memo of dishonour. The drawer then has 15 days to make the payment. If payment is not made within 15 days of receiving notice, a criminal complaint can be filed in the Magistrate's Court within 1 month of expiry of the 15-day period. Section 138 is a criminal offence with up to 2 years imprisonment or fine or both. VERIFY_OFFICIAL_SOURCE: Negotiable Instruments Act 1881, Section 138–142.

When to File This Complaint

• Bank has returned a cheque with memo "Insufficient Funds"
• Cheque returned as "Account Closed"
• Cheque returned as "Stop Payment" (in some cases)
• Cheque was given for legally enforceable debt or liability
• Dishonour memo received from bank within last 30 days
• Cheque was given for repayment of loan, services, or goods

Documents Required

• Original dishonoured cheque
• Bank's memo of dishonour (bank return memo)
• Underlying transaction document (loan agreement, invoice, receipt)
• Your own bank account details where cheque was deposited
• Drawer's (issuer's) correct address for notice service
• Previous demand notices sent (if any)

Common Mistakes to Avoid

• Missing the 30-day window for sending notice (fatal to the case)
• Sending notice by ordinary post instead of registered post RPAD
• Incorrect address — accused can claim non-service
• Notice for wrong cheque amount or wrong cheque number
• Filing complaint after 1-month window from notice expiry
• Cheque for past liability or gift (not legally enforceable debt)