Cheque Bounce Notice Format (Section 138 NI Act)

चेक बाउंस नोटिस प्रारूप (धारा 138 NI अधिनियम)

Legal Notices Updated: 2025-02-28

Overview

A cheque bounce notice is a mandatory legal notice sent under Section 138 of the Negotiable Instruments Act, 1881 when a cheque is dishonoured. The notice must be sent within 30 days of receiving the bank memo and gives the drawer 15 days to make payment.
Hindi चेक बाउंस नोटिस परक्राम्य लिखत अधिनियम, 1881 की धारा 138 के तहत भेजा जाने वाला एक अनिवार्य कानूनी नोटिस है जब चेक अस्वीकृत हो जाता है।

When to Use This Format

  • When a cheque issued to you is returned unpaid by the bank
  • When the bank memo states 'insufficient funds' or 'account closed'
  • Within 30 days of receiving the cheque return memo from the bank
  • Before filing a criminal complaint under Section 138 NI Act
  • For cheques issued for discharge of any debt or liability

Key Components

  1. 1 Sender Details

    Name and address of the payee (person to whom cheque was issued) or their advocate.

  2. 2 Recipient Details

    Name and address of the drawer (person who issued the cheque).

  3. 3 Cheque Details

    Cheque number, date, amount, bank name, and branch details.

  4. 4 Bank Return Memo

    Date of presentation, date of return, and reason for dishonour as stated in the memo.

  5. 5 Demand for Payment

    Clear demand to pay the cheque amount within 15 days of receipt of notice.

  6. 6 Consequences

    Warning of criminal prosecution under Section 138 NI Act if payment is not made.

Sample Format

Download Word Document
LEGAL NOTICE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 Date: ___________ RPAD/Speed Post To, [Drawer Name] [Complete Address] Subject: Legal Notice for Dishonour of Cheque under Section 138 NI Act Under instructions from my client, [Payee Name], residing at [Address], I serve upon you the following legal notice: 1. That you issued Cheque No. _____, dated _____, for Rs. _____/- (Rupees ____________ only) drawn on [Bank Name], [Branch], in discharge of your liability towards my client. 2. That when my client presented the said cheque for encashment on [Date], it was returned unpaid by the bank vide return memo dated _____ with the remark "[Insufficient Funds / Account Closed / etc.]". 3. That under Section 138 of the Negotiable Instruments Act, 1881, dishonour of a cheque issued in discharge of a debt or liability is a criminal offence punishable with imprisonment up to 2 years and/or fine up to twice the cheque amount. 4. DEMAND: You are hereby called upon to make the payment of Rs. _____/- within 15 days from the date of receipt of this notice. 5. In the event of your failure to make the payment within the stipulated period, my client shall be constrained to file a criminal complaint against you under Section 138 of the NI Act before the competent court, at your risk, cost, and consequences. [Advocate Name] [Enrollment No.] [Address]

Step-by-Step Guide

1

Collect Bank Return Memo

Obtain the cheque return memo from your bank stating the reason for dishonour. Note the date carefully.

2

Send Notice Within 30 Days

The legal notice must be sent within 30 days from the date you receive the bank return memo. This is a strict timeline.

3

Draft the Demand Notice

Prepare the notice with cheque details, return memo details, and a clear demand for payment within 15 days.

4

Send via RPAD/Speed Post

Send through Registered Post with Acknowledgment Due (RPAD). Keep postal receipt as proof.

5

Wait 15 Days

Give the drawer 15 days from receipt of notice to make the payment.

6

File Complaint if No Payment

If no payment within 15 days, file a criminal complaint under Section 138 NI Act within 30 days of expiry of the notice period.

Important Notes

  • The 30-day timeline for sending notice from the date of receiving the bank return memo is mandatory and strict.
  • The complaint must be filed within 30 days after the 15-day notice period expires. Total window is approximately 75 days from the return memo.
  • Post July 2024: While Section 138 NI Act remains unchanged, any related criminal allegations should reference BNS 2023 sections (e.g., Section 318 BNS for Cheating instead of Section 420 IPC).
  • The cheque must have been issued for discharge of a legally enforceable debt or liability.
  • Even if the notice is returned unclaimed/refused, it is deemed to have been served for the purpose of Section 138.

Frequently Asked Questions

What is the punishment for cheque bounce in India?

Under Section 138 of the Negotiable Instruments Act, the punishment is imprisonment for up to 2 years, or a fine which may extend to twice the amount of the cheque, or both. The court may also order compensation to the complainant.

Can a cheque bounce case be settled?

Yes, a cheque bounce case can be settled at any stage. If the accused pays the cheque amount along with interest and costs, the complainant can file a compromise application. The court generally accepts compounding of offences under Section 138 NI Act.

What if the cheque bounces due to a technical reason?

Section 138 applies only when a cheque bounces due to insufficient funds or when the amount exceeds the arrangement with the bank. Technical reasons like signature mismatch, overwriting, or stale cheque do not attract Section 138 liability. However, these may give rise to civil remedies.

Legal Disclaimer

This format is provided for informational and educational purposes only. It does not constitute legal advice. The format may need to be adapted based on specific circumstances, applicable laws, and jurisdictional requirements. Always consult a qualified advocate or legal professional before filing any legal document. For more details, see our Disclaimer.

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