Section 138 Negotiable Instruments Act 1881 (NI Act): Cheque Bounce or Dishonor of Cheque

August 27, 2018
By Advocate Chikirsha Mohanty



Dishonor 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 provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], 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.]



 

Related Articles


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 in India

Advocate Sunil Kumar Bakshi
Sector-16, Faridabad
32 years Experience
Advocate Harish Malhotra
District Court, Gurgaon
22 years Experience
Advocate Rajesh K.S
LH House, Bangalore
13 years Experience
Advocate Prashant Mendiratta
Lajpat Nagar 4, Delhi
26 years Experience

These guides are not legal advice, nor a substitute for a lawyer
These articles are provided freely as general guides. While we do our best to make sure these guides are helpful, we do not give any guarantee that they are accurate or appropriate to your situation, or take any responsibility for any loss their use might cause you. Do not rely on information provided here without seeking experienced legal advice first. If in doubt, please always consult a lawyer.

Legal Services

15 Minutes Cheque Bounce Advice Session by Phone

4.8 | 104 ratings
Legal advice and answers from a local experienced advocate about your Cheque Bounce issue
Legal Notice / Reply to Legal Notice

4.7 | 83 ratings
30 Min Intro call + Start to finish help - Send a legal notice through an experienced advocate
Get free legal advice from top Cheque Bounce lawyers for your specific issue

Cheque Bounce Law Articles

Director’s liability in cheque bouncing matters

The new law on territorial jurisdiction for cheque bounce matters

Know your legal rights in case of cheque bounce

How to File a Cheque Bounce Case

Talk to a lawyer for your legal issue