Question 1

How do I recover money from a cheque bounce case?

Accepted Answer

How do I recover money from a cheque bounce case?
There are two ways to recover your money from a cheque bounce case viz. i) following the procedure as laid down in Section 138, Negotiable Instruments Act, 1881, or ii) filing a civil suit. Click here to know more about how to recover your money under Section 138, Negotiable Instruments. (https://www.pitambaralawchambers.com/post/advocates-in-indore-what-to-do-if-a-cheque-gets-dishonoured-bounced)

Question 2

What is the procedure under Section 138 to recover money on dishonour of cheque?

Accepted Answer

This is a three step procedure under Section 138, Negotiable Instruments Act to recover your money when the cheque gets dishonoured which is:
Step 1: Sending Demand Notice within one month from the date of dishonour of cheque by bank
Step 2: 15 days time period to the drawer of the cheque for making payment and 
Step 3: Filing complaint before the JMFC or Metropolitan Magistrate.

Question 3

What is demand notice/legal notice for dishonour of cheque?

Accepted Answer

A Demand Notice is actually a legal notice sent through an advocate demanding the said amount of money mentioned on the cheque. The notice must contain information such as the drawer who has issued the cheque, the transaction for which the cheque was issued by the drawer, details of the cheque such as cheque number and bank of the account holder, the bank to which the cheque was presented, the date on which cheque was presented and date on which the bank returned the cheque, etc. The notice must be sent within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid. The notice must clearly mention the demand by the payee from the drawer of the amount for which the cheque was issued.

Question 4

Who can send demand notice under Section 138?

Accepted Answer

Only the payee can send demand notice under Section 138. He can do so through a law firm or an advocate.

Question 5

Can 138 notice be sent after 30 days?

Accepted Answer

No. The time limit provided in Section 138 has to be followed very strictly and therefore, a notice sent after 30 days does not fulfill the requirement prescribed under the provision. However, if you could not send the demand notice within one month and the cheque is within its validity period then you can present the cheque once again before the bank and the new time limit of 30 days for sending the demand notice shall start.

Question 6

What are the reasons for cheque bounce/dishonour of cheque?

Accepted Answer

A cheque gets dishonoured on different reasons but the most common of them are insufficient funds in the account of the drawer, payments stopped by the drawer, account closed by the drawer before presentation of the cheque, signature of drawer on cheque not matched with signature of drawer in the records of the bank, the cheque amount has exceeded or crossed the limits of the overdraft.

Question 7

What is a ‘Cheque Return Memo’?

Accepted Answer

It is a document issued by the bank where the cheque was presented which informs the payee that the cheque presented by him was dishonoured. The return memo shall mentions details such as the name of the bank where cheque was presented, depositor name, depositor account number, date on which the cheque was presented, date in which the cheque was returned and most importantly the reason for the return of the cheque.

Question 8

How much court fee has to be deposited for filing a case of dishonour of cheque? What is the court fee for 138 case?

Accepted Answer

The court fee for complaint under Section 138 is directly depended on the amount of cheque. In Madhya Pradesh the court fee for complaint under Section 138 i.e., for dishonour of cheque is as follows:

Amount of Cheque                               Court Fee

Less than Rs. 4,000                               Rs. 200
Rs. 4,000 to Rs. 1,00,000                    5% of the amount of cheque
Rs. 1,00,000 – Rs. 5,00,000                5% on Rs. 1,00,000 + 4% of the remaining 
                                                                        amount 
More than Rs. 5,00,000                       5% on Rs. 1,00,000 + 4% on the next Rs. 
                                                                       4,00,000 + 3% of the remaining amount 
                                                                       while maximum being Rs. 1,50,000

Question 9

Is cheque bounce a criminal offence? Is proceeding under Section 138 criminal proceeding?

Accepted Answer

Although proceedings under Section 138 are civil proceedings, proceedings under Sec. 138 can be called a "civil sheep" in a "criminal wolf's clothing". Proceedings under 138 are meant to ensure payment of money and the threat of jail is only a mode to ensure recovery.

Question 10

Can an accused get bail in case of dishonour of cheque?

Accepted Answer

Yes. Offence of dishonour of cheque is a bailable offence and therefore, you can get bail easily as a matter of right from the trial court.

Question 11

How do I get bail in a cheque bounce case?

Accepted Answer

Offence of dishonour of cheque is a bailable offence and therefore, you can get bail easily as a matter of right from the trial court under Section 436 Cr.P.C.

Question 12

What is the maximum punishment can be granted for the offence of dishonour of cheque/cheque bounce under section 138?

Accepted Answer

The offence of dishonour of cheque under Section 138 is punishable 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.

Question 13

Do I have to pay if a cheque issued by me gets dishonoured?

Accepted Answer

Yes. If a cheque issued by you gets dishonoured, then you have to pay the amount of the cheque within 15 days once the demand notice under Section 138 sent by the payee is received by you. If you have valid reasons and therefore, do not wish to pay, then you can contest the case which the payee of the cheque is going to file against you.

Question 14

Can 138 complaint be withdrawn?

Accepted Answer

Yes. Under Sec. 200 of Cr. P.C, one can withdraw the complaint filed by him under Section 138, Negotiable Instruments Act anytime and at any stage of the proceeding.

Question 15

Can police interfere in case of dishonour of cheque?

Accepted Answer

No. The police will not lodge the FIR for offence of dishonour of cheque. However, one can lodge the FIR for offence of Cheating

Question 16

Can a dishonoured/bounced cheque be deposited again?

Accepted Answer

Yes. A bounced cheque can be deposited again within the period of its validity

Question 17

What is period of validity of a cheque?

Accepted Answer

Cheque validity period is a time period within which the cheque is considered a valid negotiable instrument for transaction. Once the validity period ends, the cheque will be considered invalid. As per RBI, cheques shall have validity of 3 months from its date

Question 18

How many times a cheque can be returned?

Accepted Answer

There is no fixed limit for presenting a cheque before the bank. You can present a dishonoured cheque multiple times within the period of its validity. This is usually done when the cheque is dishonoured first time for insufficient fund and the drawer of the cheque deposited the sufficient amount in its bank account after such dishonour of cheque.

Question 19

Can a dishonoured/bounced cheque be cleared?

Accepted Answer

Yes, if the cheque gets dishonoured for insufficient funds and the drawer deposits the required sum in his account then on presenting the cheque again would be cleared by the bank.

Question 20

How long does it take to get the court Judgement on a cheque bounce case in India?

Accepted Answer

The Negotiable Instruments Act, 1881 prescribes that case of dishonour of cheque should be completed within six months. However, considering the workloads on courts, these cases are taking 3-4 years to complete while it may go upto 6-7 years for some. Most of the cases are end up in settlement and they get withdrawn anytime and therefore, end of a case under Section 138 depends on case to case

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