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Cheque bounce · Section 138 NI Act 1881

Generate a §138 cheque-bounce legal notice

When a cheque bounces, the law requires you to serve a written demand notice within 30 days of receiving the bank's return memo. This tool drafts that notice for you in 5 minutes. Drafting and preview are free; you pay only to download the PDF.

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Before you start, you'll need

  • The bounced cheque — number, date, amount, drawee bank & branch.
  • The bank's return / dishonour memo — date and the reason shown (e.g. "Funds Insufficient", "Stop Payment").
  • The drawer's (cheque-issuer's) full name and address.
  • A short note on why the cheque was issued — repayment of a loan, sale of goods, rent arrears, etc.
  • The date the cheque was presented and the bank you presented it to.

Critical timelines

3 monthsThe cheque must have been presented to the bank within its validity — three months from the date on it. A cheque presented later than that cannot support a §138 notice.
30 daysYou must send this demand notice within 30 days of receiving the bank's information that the cheque was returned unpaid — counted from the day you received the return memo, not the date printed on it. A notice sent after that cannot support a §138 prosecution on this dishonour.
15 daysThe recipient gets 15 days from receipt of the notice to pay.
1 monthIf they don't pay, you have one month from the day the 15 days run out to file a criminal complaint in the Magistrate's court. A complaint made later can be taken up only if the court is satisfied there was sufficient cause for the delay. Total window is tight — start drafting today.

How to send the notice

  1. Generate the draft with this tool.
  2. Review every word against your own papers — the cheque, the bank's memo and your dates.
  3. Get it reviewed by an advocate. A §138 notice is a serious legal document — errors can defeat your case.
  4. Send by Registered Post with Acknowledgement Due (RPAD) AND by Speed Post AND by email if you have the recipient's email address. Belt-and-braces — refusal of one channel does not defeat service.
  5. Keep the postal receipts and the acknowledgement card. These are evidence in court.

Important

This tool prepares a document based on the inputs you provide. It is not legal advice and does not create an advocate-client relationship with eMunshi. The format of a §138 notice is largely standard, but the facts of your case — and the right strategic phrasing — should be reviewed by an enrolled advocate before you serve the notice. eMunshi is not liable for any consequences arising from use of this draft.

Start drafting now →Next, if the notice goes unpaid: Magistrate complaint, with an advocate →
Next stages in a §138 case

After the notice, what happens?

A cheque-bounce matter has up to four documents. The demand notice on this page comes first. The drawer may send a reply to it — that is optional, and it comes before any complaint. If the 15-day window expires without payment, the payee files a complaint with the Magistrate. And the parties can compound the offence at any stage if they settle. The drawer's reply can be drafted here; the complaint and the compounding application are filed in court, so a panel advocate handles them.

Step 2 · For the payee

Magistrate Complaint

Filed within one month of the 15-day notice period expiring. Initiates the criminal proceeding under s.142 NI Act.

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For the drawer / accused

Reply to the §138 Notice

Raise your defences before the Magistrate complaint is filed — no debt, paid already, forged signature, etc.

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When parties settle

Compounding Application

Joint application under s.147 NI Act when the parties have settled. States the cost payable under the Damodar S. Prabhu schedule for the stage your case has reached.

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