Recovery · Provision
A criminal remedy on three deadlines: 30 days to demand, 15 for the drawer to pay, one month to file. (Section 138, Negotiable Instruments Act, 1881.) In force since 1 April 1989 · Text checked against India Code on 25 October 2026.
Quick Statutory Answer
Section 138 of the Negotiable Instruments Act 1881 provides a criminal remedy for cheque dishonour, punishable by up to 2 years imprisonment, a fine up to twice the cheque amount, or both. It requires strict adherence to three statutory deadlines: the cheque must be presented within 3 months, a legal demand notice must be served within 30 days of the bank return memo, and the drawer gets 15 days to pay before a court complaint can be filed within 1 month.
Enter your own figures in the calculator on this page: Cheque bounce deadline calculator, under Negotiable Instruments Act, 1881, ss.138 and 142.
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 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.
| Stage | Trigger Event | Statutory Time Limit | Governing Provision | Legal Consequence If Missed |
|---|---|---|---|---|
| 1. Cheque Presentation | Date written on cheque | Within 3 Months | Banking Regulation | Cheque becomes stale; Section 138 remedy lost |
| 2. Legal Demand Notice | Bank return memo received | Within 30 Days | Section 138 Proviso (b) | Criminal remedy permanently barred for this presentation |
| 3. Payment Window | Receipt of notice by drawer | 15 Days to pay | Section 138 Proviso (c) | If paid in 15 days, no offence; if unpaid, cause of action arises |
| 4. Criminal Complaint | Expiry of 15-day notice window | Within 1 Month | Section 142(1)(b) | Complaint barred by limitation unless condoned by court |
2 years, or 2× the cheque amount. Plus interim compensation of up to 20% under s.143A while the trial is still running.
Thirty days from receiving information from the bank that the cheque was dishonoured, under proviso (b) to section 138. The period runs from the bank return memo, and missing it ends the section 138 remedy for that presentation.
Imprisonment for up to two years, or a fine up to twice the amount of the cheque, or both. Since 2018 a court may also order interim compensation of up to 20% of the cheque amount under section 143A before the trial concludes.
Yes. Section 147 makes the offence compoundable, so the parties may settle at any stage. Most matters under this section are resolved by compromise rather than run to conviction.
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