Cheque Bounce Notice (Section 138): Format, 30-Day Deadline and Next Steps (2026)

Explainer · Section 138 · Cheque Bounce

Updated for 2026 · Claw Editorial

When a cheque bounces, the payee has a short, fixed window to act, and a missed date can end the criminal remedy for good. Under Section 138 of the Negotiable Instruments Act, the payee must send a written demand notice within 30 days of the bank return memo, the drawer gets 15 days to pay, and if the drawer still does not pay, a complaint can be filed within one month after that. This guide explains the clock, what the notice must contain, a sample format, and what happens next.

01Why the deadline matters

A bounced cheque feels like a simple debt problem, but the law treats it as an offence only if you follow a strict sequence of steps. The notice is the first and most unforgiving step.

The clock starts without warning

The 30 days do not start when you decide to act. They run from the date you receive information from the bank that the cheque was returned unpaid. Many payees lose days waiting for the drawer to “arrange the money” and then find the window is almost shut.

A late notice cannot be repaired

If the notice is sent after the 30 day period, the Section 138 offence is not made out. You can still sue to recover the money in a civil court, but you lose the faster criminal route and the pressure that comes with it.

A cheque bounce notice must be sent within 30 days of the bank return memo. The drawer then has 15 days to pay. After that, the payee has one month to file the complaint.

02The Section 138 pre-conditions

Section 138 applies only when every pre-condition is met. The notice is just one of them.

• A legally enforceable debt or liability: the cheque must have been issued to discharge a debt or liability, in whole or in part. A gift or a security cheque for a debt that does not exist is a defence issue.
• Presented in time: the cheque must be presented to the bank within three months of its date, or within its validity period, whichever is earlier.
• Returned unpaid: the bank must return it because the account has insufficient funds, or the amount exceeds the arrangement with the bank. Other return reasons need a closer look.
• Demand notice in writing: the payee must demand the amount in writing within 30 days of receiving the bank’s information about the return.
• Drawer fails to pay: the drawer does not pay within 15 days of receiving the notice.

If any one of these is missing, the complaint is open to challenge. For the section itself and its punishment, see our guide to Section 138 of the NI Act.

03The 30, 15 and 30 day clock

The whole process runs on three consecutive periods. Count them carefully, and keep proof of every date.

A worked example

Say the bank return memo reaches you on 1 March. The notice must go out by 30 March. If the drawer receives it on 5 April, the 15 days end on 20 April. The complaint window then runs for one month from the day after the 15 days expire.

The 15 days are not 45 days

Courts have said that the payee does not get a long 45 day block. The 15 days belong to the drawer to pay, and the one month for the complaint starts only after that. You cannot file the complaint before the 15 days have ended, or it is premature.

The complaint is made under Section 138 read with Section 142 of the Act. Condonation of delay in filing is possible in the court’s discretion, but you should never plan around it.

04What the notice must contain

The law needs a written demand for the cheque amount. A good notice goes further, so there is no room to argue later about what was claimed or when.

• Parties: full name and address of the drawer (and the company and its directors, if the cheque was issued by a company), and the payee.
• The cheque details: cheque number, date, amount, bank and branch, and the account it was drawn on.
• The debt: a short statement of why the cheque was issued, such as a loan, invoice or services.
• Presentation and return: the date of presentation, the date of the return memo, and the reason for return, with the memo attached.
• The demand: a clear demand for the full cheque amount within 15 days of receipt of the notice.
• The consequence: a warning that on non-payment you will file a complaint under Section 138 of the Negotiable Instruments Act, and pursue civil recovery and costs.
• Proof of service: send by speed post with acknowledgement, and by email or WhatsApp where possible. Keep the postal receipt and tracking record.

Demand only the cheque amount in the statutory demand. If you add interest or costs, say clearly that the cheque amount is the primary demand, because an inflated or confusing demand can be used to attack the notice.

05Sample cheque bounce notice

The text below is a simple template. Adapt it with an advocate, and send it from your advocate’s letterhead where you can.

BY SPEED POST WITH AD AND EMAIL

Date: [date]

To,
[Name of drawer / company and directors]
[Address]

Subject: Legal notice under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of cheque no. [number] dated [date] for Rs [amount]

Sir/Madam,

Under instructions from my client, [name and address], I give you this notice.

1. You owe my client Rs [amount] towards [loan / invoice no. / services].
2. To discharge this liability, you issued cheque no. [number] dated [date] for Rs [amount] drawn on [bank, branch].
3. My client presented the cheque on [date]. It was returned unpaid on [date] with the remark “[reason]”. My client received the return memo on [date].
4. I therefore call upon you to pay Rs [amount] within 15 days of receipt of this notice.
5. If you fail to pay within 15 days, my client will file a criminal complaint against you under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881, and will also take civil action for recovery with costs and interest. You will be responsible for all the consequences.

A copy of this notice is retained for record.

[Advocate name, enrolment no., contact]

Attach a copy of the cheque and the bank return memo to the notice. Keep the originals safe for the complaint.

06After the notice: the complaint before the magistrate

If the drawer pays within 15 days, the matter ends there, and you should confirm receipt in writing. If not, the next move is the complaint.

Filing the complaint

The complaint is made in writing to the Judicial Magistrate or Metropolitan Magistrate who has jurisdiction, with a sworn statement and the documents: the cheque, the return memo, the notice, and proof of service. The place where the cheque was delivered for collection, or the payee’s bank branch, is generally relevant to jurisdiction.

What the court does

The magistrate takes cognizance, issues summons to the drawer, and the case proceeds as a summons trial. Many such cases settle by compounding, and courts encourage it. The punishment on conviction can be imprisonment up to two years, a fine of up to twice the cheque amount, or both.

Interim compensation and appeals

Later amendments allow the court to direct the drawer to pay interim compensation, and to require a deposit if the drawer appeals a conviction. The details are in Sections 143A and 148 of the Act.

07Common mistakes that sink a notice

• Counting from the wrong date: the 30 days run from receipt of the bank information, not from the cheque date or the date you spoke to the drawer.
• Weak proof of service: without a postal receipt and tracking record, the drawer can deny receiving the notice.
• Wrong party: for a company cheque, the company and the persons in charge of its affairs are usually named. Naming the wrong person can weaken the complaint.
• Filing too early or too late: filing before the 15 days end is premature, and filing after the one month window needs the court to condone the delay.
• Presenting the cheque late: a cheque presented after its validity period fails the first pre-condition, however good the notice is.

08Where Claw fits

Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.

Claw does not draft or send the statutory notice for you on this page’s topic, and it is not a substitute for an advocate’s advice on your dates. Where it helps is after the complaint is filed. A Section 138 case runs for months or years across many hearings, and Claw lets you track the resulting 138 case by party name, with case updates, calendar entries, cause lists and WhatsApp and email alerts, so a hearing date is not missed. Claw has a free plan for individual advocates, and paid plans for teams. If you are weighing case tracking tools, see Iolite alternatives in India.

09Sources and further reading

• Negotiable Instruments Act, 1881 (Sections 138 to 142, 143A, 148): indiacode.nic.in
• Supreme Court of India (judgments on Section 138): sci.gov.in
• Claw: clawlaw.in

This page is an explainer, last verified October 2026, and is not legal advice. Check the current text of the Act before relying on any date.

10Frequently asked questions