Cheque Bounce Notice

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What is Cheque Bounce/Dishonour of Cheque

Cheque bounce or dishonour of cheque occurs when the cheque that is presented to the bank for payment, is returned back either due to insufficient funds in the drawer’s account or the signature on the cheque does not match with the drawer’s signature or any other reason. In India, cheque bounce is considered a legal offence and the law regulating the offence is section 138 of the Negotiable Instrument Act, 1881.

Reasons for Cheque Bounce

Following are some of the reasons why a cheque is bounced or dishonoured:

1. Insufficient funds in the account of the person issuing the cheque

2. Unmatching signature on the cheque

3. Post dated cheque i.e. the date mentioned on the cheque is yet to come

4. Stale cheque i.e. the cheque is presented to the bank 3 months after the cheque was issued

5. When the payment is stopped- if the drawer asks the bank to stop the payment and not to pay for cheque already issued

6. Difference in amount in words and number

7. Disfigured or Damaged cheque- a cheque will be dishonoured if it is torn, damaged or not in a good condition or has some details not clearly visible

What happens when a Cheque is bounced?

After the cheque is dishonoured, the bank offers ‘cheque return memo’ to payee stating why the cheque has been bounced. The cheque can be resubmitted by the payee if he believes that it will be honoured the second time. If the cheque is bounced again, then the payee can prosecute the drawer legally.

Legal Remedies available in a Cheque Bounce case?


Before filing a suit against the drawer, a legal notice/demand letter must be sent to him. The notice must be sent within 30 days from the date on which the bank returns the cheque along with the information that the cheque is dishonoured.

You can take assistance from a lawyer to draft the legal notice in such a case.


If the drawer does not make the payment within 15 days from the date on which the notice has been sent to him, then the payee can initiate legal action against such person within 30 days from the date of expiry of the 15 days period provided to the drawer.

Documents Required

You must essentially have the following documents when filing a complaint of cheque bounce:

1. Original cheque

2. Cheque returning memo

3. Copy of the legal notice sent to the drawer demanding the payment of money

4. Power of Attorney signed by the complainant

5. Preliminary evidence in shape of Affidavit

Reply to the Legal Notice

In case you receive a legal notice for payment of money in a cheque bounce case, then you have to send a reply to such notice within 15 days from the date on which the notice has been received. Along with the notice, you must also send a cheque in favour of the payee of the same amount as was the previous cheque. The reply must also specify the reason for the dishonour of cheque. If the reply is not made within the stipulated time period then a legal action will be initiated against you.

However, if you do not have an outstanding debt against the person who has sent the notice, then you should mention the same in your reply to the notice, which is to be sent within 15 days.

You can always take assistance of a lawyer who is an expert in this field

What's Included

a) Advise and consultation from lawyer on a 30-minute phone call

b) Draft of Legal Notice. The advocate will share the draft of the legal notice for your approval.

c) Dispatch of Legal Notice. Once the notice is finalized after your approval the advocate will dispatch the legal notice through registered post and share the tracking number.

What's Not Included

a) Filing of any case post sending out the legal notice is not included in this service.

You May Also Want To Know

1. What is the punishment in a cheque bounce case?

The maximum punishment that can be awarded to the accused in a cheque bounce case is 3 years of imprisonment along with fine that can extend upto double the cheque amount.

2. How long after the notice has been served can I file a case against the drawer?

A case under section 138 of the Negotiable Instrument Act, 1881 can be filed within 30 days from the date of expiry of 15 days period from which the notice has been served to the drawer, i.e. 45 days from the date on which notice has been served.

3. What can I do if the time for filing a case under section 138 expires?

If the time for filing a case under section 138 is expired, then another remedy available in such a case is to file a summary suit for recovery of money or initiate criminal proceedings under section 420 of IPC against the drawer within 3 years from the date on which the cheque is issued.

4. What is a summary suit for recovery of money?

Summary suit is a civil legal proceeding initiated for recovery of money due under any written agreement, cheque etc. These proceedings are different from normal recovery suit, as here the liability to prove that petitioner is not liable to recover any amount is on defendant for which he needs to obtain leave to defend from the court.

5. What can I do in case I do not know the drawer’s address?

You need to know to address of the drawer for serving legal notice to him, in case you do not have any information regarding his current address then you can serve the legal notice to the last known address.

6. What is the average time in which a cheque bounce case is resolved?

The average time for resolution of a cheque bounce case depends on the district court you are filing your case before. The case load and infrastructure a court has, are factors to consider. A cheque bounce case will realistically take you anywhere from 1 to 2.5 years to conclude.

7. Which court should I approach for filing a cheque bounce case?

According to the Negotiable Instrument (Amendment) Act, 2015, a cheque bounce case can be filed in a court within whose local limit of jurisdiction is the bank to which the cheque is presented is situated.

8. Can I recover interest and legal expenses from the drawer of the dishonoured cheque?

Yes, you can recover interest and legal expenses from the drawer of the dishonoured cheque in a summary suit for recovery of money, but not in the proceedings initiated under Section 138 N.I. Act. However, under Section 138 N.I. Act the award may be higher than the cheque amount.

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