1. Legal Framework: Negotiable Instruments Act, 1881

• Cheque bounce incidents have become common in financial transactions such as loan repayments, business payments, and fee settlements.

• When cheques—often involving substantial amounts—are returned unpaid by the bank, legal consequences arise under Section 138 of the Negotiable Instruments Act, 1881.

• Dishonour of a cheque under Section 138 is treated as a criminal offense.

2. Section 138 – Dishonour of Cheque

• Applies when a cheque drawn for repayment of a debt or liability is returned unpaid due to:

  • Insufficient funds, or

  • Exceeding the arrangement made with the bank.

• The drawer of the cheque is deemed to have committed an offense.

• Punishments may include:

  • Imprisonment for up to one year, or

  • A fine up to twice the cheque amount, or

  • Both penalties.

3. Common Queries Related to Cheque Bounce

• Advice for handling cheque bounce cases

• Defenses available in false Section 138 cases

• Whether one can file a lawsuit for cheque bounce

• Situations where cheque bounce qualifies as an offense

• Possibility of filing complaints for the same cheque in two jurisdictions

• Actions to take when a cheque is dishonoured by the bank

Our Commitment 

“CRIMINAL CRAFTSMEN : SCULPTING YOUR DEFENSE WITH CARE AND PRECISION.”“