When is it an offence?
Section 138 of the Negotiable Instruments Act, 1881 applies when:
- A cheque was given to repay a legally enforceable debt or liability
- It was presented to the bank within 3 months of the date on it (or within its validity)
- It returned unpaid for “insufficient funds”, “account closed”, or because the amount exceeded the arrangement
Time limits that cannot be missed
| Step | Deadline |
|---|---|
| — | — |
| Present the cheque | Within 3 months of its date |
| Send demand notice | Within 30 days of receiving the bank’s return memo |
| Drawer pays | Within 15 days of receiving the notice |
| File complaint | Within 1 month after the 15 days end |
Courts can condone a delay in filing the complaint for sufficient cause, but the notice period is strict. Missing the notice deadline can end the case.
How to send the notice
Send it by registered post or speed post. Courts also accept email or messaging apps in suitable cases, but keep postal proof as well. Mention the cheque number, date, amount, bank memo date and demand payment in 15 days.
Where to file
Since the 2015 amendment, the complaint is filed in the court where the payee’s bank branch is located.
Punishment and money recovery
- Imprisonment up to 2 years, or fine up to twice the cheque amount, or both
- Court can order the accused to pay the complainant interim compensation up to 20% of the cheque amount (section 143A)
- An accused who appeals against conviction normally has to deposit at least 20% of the fine or compensation (section 148)
Defences commonly raised
- No legally enforceable debt (for example, the cheque was a security or gift)
- Notice not received or sent late
- Cheque not presented in time
- Signature or amount tampered
The law presumes that a cheque was issued for a debt (section 139), but the accused can rebut this by showing facts.
Supreme Court guidelines of 2025
In *Sanjabij Tari v. Kishore S. Borcar* (September 2025), the Supreme Court issued directions to speed up cheque cases: service of summons by electronic means, an option to pay the cheque amount at the start through QR code or UPI, early interim compensation orders, and limited costs for compounding (settling) at different stages:
- before the accused leads defence evidence: no extra cost
- after defence evidence but before judgment: an additional 5% of the cheque amount
- at the appeal or revision stage in a sessions court or High Court: 7.5%
- before the Supreme Court: 10%
Settlement is common
Many cases end in payment and compromise. A written settlement with dates, payments and a closing order from the court is important.
For people who issued the cheque
Do not ignore the notice. Reply in writing, gather proof of repayment or dispute, and speak to a lawyer before the first hearing.
Frequently asked questions
Is a post-dated cheque covered?
Yes, if presented on or after its date and within 3 months, and it is for an existing debt.
What if the bank returned it for “signature mismatch”?
That reason can also come under section 138 in many cases. Check with a lawyer.
Can I file a civil suit instead?
Yes. Recovery suits or summary suits are possible in addition to or instead of the criminal complaint.
Is a cheque given as security an offence?
If a debt exists on the date of presentation, even a security cheque can lead to an offence. It depends on facts.
Tell us briefly what has happened and we will guide you on the next step. Hemanth & Associates, Malleshwaram, Bengaluru.
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Last reviewed: October 2026. This article is for general information only. It is not legal advice and does not create an advocate-client relationship. Laws, fees and procedures change, and every case depends on its own facts, so please consult a qualified advocate before acting. In line with Bar Council of India rules, this page is not an advertisement or solicitation.
