No agreement regarding given loan. Cheque bounced. How to recover now?

In Cheque Bounce Law

Cheques given to me against an amount to be returned have bounced 5 days ago. I gave someone Rs. 3 Lacs by cheque a few months ago for a business proposition on mutual verbal terms that did not work out. The person initially refused to return the amount and lately gave me 3 cheques of Rs. 25,000 each to begin with out of which I deposited 1 and it got bounced due to insufficient funds.

The banker told me not to deposit the other 2 cheques as the account did not have funds. There was no written agreement for the initial engagement.

What should I do now to recover my money?

Answers (1)

274 votes

Your case falls squarely under Section 138 of the Negotiable Instruments Act, 1881. Section 138 is reproduced below for your better understanding:

138. Dishonour of cheque for insufficiency, etc., of funds in the account. Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid. either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice. to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless-

(a) the cheque has been, presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course. of the cheque as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.- For the purposes of this section," debt or other liability" means a legally enforceable debt or other liability.

As the Cheque has been dishonoured, you need to send a legal notice within 30 days from the date of dishonour of the cheque, to the drawer of the cheque demanding payment and in case the said payment is not made within 15 days, you can file a criminal complaint against the drawer of the cheque in the Court of Competent jurisdiction demanding payment.

The fact that there is no written agreement as to the loan can be explained as a oral friendly loan and as you have 3 cheques signed by the person establishes that the person acknowledges the existence of the loan.

Click here to find the best Cheque Bounce lawyer in your city.

Googling your legal issue online?

The internet is not a lawyer and neither are you.
Talk to a real lawyer about your legal issue.


Popular Cheque Bounce Lawyers

Advocate Sunil Kumar Bakshi
Sector-16, Faridabad
35 years Experience
Advocate H Gouri Shankar
Banjara Hills, Hyderabad
26 years Experience
Advocate Rajeev Nigam
Kanpur Nagar, Kanpur
28 years Experience
Advocate Bala Janaki
330 Thambuchetty Street, Chennai
37 years Experience

Report abuse?

Disclaimer: The above query and its response is NOT a legal opinion in any way whatsoever as this is based on the information shared by the person posting the query at and has been responded by one of the Cheque Bounce Lawyers at to address the specific facts and details. You may post your specific query based on your facts and details to get a response from one of the Lawyers at or contact a Lawyer of your choice to address your query in detail.

Related Questions

" has handpicked some of the best Legal Experts in the country to help you get practical Legal Advice & help."

Related Articles