Cheque bounce notice format under Section 138
The demand notice is the step that creates the offence under Section 138. Get the dates or the demand wrong and the complaint fails at the threshold, however good the underlying claim is. Below is the format, followed by the two limitation periods that decide almost every dismissal.
Legal basis
Issued by the payee or their advocate, not filed in court. The complaint that follows goes before the Judicial Magistrate having jurisdiction under Section 142(2).
- Offence and the two provisos that create it: Section 138, Negotiable Instruments Act, 1881
- Who may complain, limitation, and jurisdiction: Section 142, Negotiable Instruments Act, 1881
- Presumption in favour of the holder: Sections 118 and 139, Negotiable Instruments Act, 1881
- Interim compensation and appellate deposit: Sections 143A and 148, Negotiable Instruments Act, 1881
The format
- Under instructions from and on behalf of my client, [NAME OF THE PAYEE], residing at / having its office at [ADDRESS], I issue this notice to you as follows.
- [Set out the transaction in a few sentences: what was advanced, supplied or agreed, when, on what terms, and the amount that thereby became due and payable by you to my client. State the facts, not conclusions, and confine yourself to what you can prove.]
- Towards discharge of the said liability, you issued to my client cheque No. [ ] dated [ ] drawn on [NAME OF BANK AND BRANCH] for a sum of Rs. [ ] (Rupees [AMOUNT IN WORDS] only).
- My client presented the said cheque for collection through [MY CLIENT'S BANK AND BRANCH] on [DATE]. The cheque was returned unpaid with the endorsement "[REASON EXACTLY AS IT APPEARS ON THE RETURN MEMO]". My client received the said return memo along with the bank's intimation on [DATE].
- The return of the cheque establishes that you did not maintain sufficient funds in the said account to honour the cheque [or: that you stopped payment of the said cheque], and that you have failed and neglected to discharge your liability to my client.
- You are hereby called upon to pay to my client the sum of Rs. [ ] (Rupees [AMOUNT IN WORDS] only), being the amount of the said dishonoured cheque, within FIFTEEN (15) DAYS from the date of receipt of this notice.
- Should you fail to make payment as demanded, my client will be constrained to initiate prosecution against you under Section 138 of the Negotiable Instruments Act, 1881, which is punishable with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both, and also to take such civil proceedings as are available for recovery of the amount, in which event you will be held liable for all costs and consequences.
When to use it
- A cheque issued towards a legally enforceable debt or other liability has been returned unpaid by the bank, for insufficiency of funds, for exceeding the arrangement, or because payment was stopped.
- Within 30 days of the date on which the payee received the bank's intimation of dishonour. This is the outer limit for issuing the notice, and it does not run from the date on the cheque.
- Before any complaint is filed. The complaint can only be filed after the 15 day payment period given in the notice has expired without payment.
- Not where the cheque was issued as a gift, for an unenforceable claim, or as security for a debt that had not yet fallen due, since Section 138 requires a legally enforceable debt or liability.
Filing notes
The 30 days run from the bank's intimation, not the cheque
The proviso requires the demand to be made within 30 days of the payee receiving information from the bank that the cheque was returned unpaid. Diarise the date the return memo was received and record it in the notice, because that date is what the defence will attack. A notice issued on day 31 does not create the offence.
Demand the cheque amount, distinctly
The demand must be for the amount of the dishonoured cheque. Interest, notice charges and damages may be claimed, but only if the cheque amount itself is separately and clearly identified, so that the drawer knows exactly what has to be paid to escape prosecution. A single lumped figure that mixes the cheque amount with other claims is the classic way to lose the complaint.
Send it by RPAD, and keep the cover unopened if it returns
Registered post with acknowledgement due is the mode that carries a presumption of service. Send by speed post as well if you like, but do not substitute it for RPAD. If the cover comes back refused or unclaimed, do not open it. The unopened returned cover is the proof of service, and refusal is treated as service.
Address it correctly, and to each person you intend to prosecute
Use the address on the cheque and the address in your client's records, and send to both if they differ. Where the drawer is a company, the company is the principal offender and the persons in charge of its affairs are proceeded against by virtue of Section 141, so each of them needs their own notice at their own address.
Then wait fifteen clear days
The cause of action arises only when the drawer fails to pay within 15 days of receipt. A complaint filed on day 14 is premature and liable to be dismissed on that ground alone. Filing then has to happen within one month of the day the cause of action arose, so the window is real but narrow.
Jurisdiction follows the payee's bank branch
Under Section 142(2), where the cheque is delivered for collection through an account, the complaint lies before the court within whose local jurisdiction the branch of the bank where the payee maintains that account is situated. This is worth settling before the notice goes out, because it decides which court in the State you will be filing in.
Common mistakes
Counting 30 days from the date printed on the cheque
The most common fatal error. The cheque date, the presentation date and the date of the bank's intimation are three different dates. Only the third one starts the 30 day clock.
Demanding a round figure that includes interest and costs
If the drawer cannot tell from the notice what sum has to be paid to avoid prosecution, the notice is bad. State the cheque amount as the demand, and put any additional claim separately and expressly.
Issuing the notice in the wrong person's name
The notice must be given by the payee or the holder in due course. A notice issued on behalf of a sister concern, a proprietor's personal name where the payee is the firm, or an assignee whose title is not made out, gives the defence a threshold point.
Filing before the fifteen days expire
Premature complaints get dismissed and the limitation for filing a proper one may have run out by the time that happens. Count the fifteen days from receipt, not from despatch.
Opening the returned envelope
An opened cover cannot prove non-service. Keep it sealed and produce it as it came back.
Not pleading that the cheque was for a legally enforceable debt
The debt or liability is an ingredient of the offence, not a background fact. The notice should set out what the money was for. A notice that merely says a cheque bounced leaves the ingredient unpleaded.
Common questions
How many days do I have to send a cheque bounce notice?
Thirty days, running from the date the payee received the bank's information that the cheque had been returned unpaid. It does not run from the date on the cheque or from the date of presentation. If the thirtieth day is missed, the offence is not made out on that dishonour, although a fresh presentation of a cheque still within its validity can give rise to a fresh cause of action.
What if the notice comes back unserved or refused?
Refusal to accept is treated as service, and a notice returned as unclaimed from the correct address carries a presumption of service. Keep the returned cover unopened along with the postal receipt. The drawer is not without a remedy either: on receiving the summons they may still pay the cheque amount, and courts have held that a drawer who pays within fifteen days of receiving the summons can rely on that.
Which court do I file the complaint in?
Under Section 142(2), where the cheque was delivered for collection through an account, the complaint lies before the Judicial Magistrate within whose local jurisdiction the branch of the bank in which the payee maintains that account is situated. Work this out before issuing the notice rather than after.
Can the court order the accused to pay something before the trial ends?
Yes. Section 143A empowers the trial court to direct the drawer to pay interim compensation to the complainant, subject to the ceiling fixed by that section, and Section 148 empowers the appellate court to direct a deposit when a conviction is appealed. Both are discretionary and both should be confirmed against the current text of the sections.
Can I send the notice myself instead of through an advocate?
Yes. The Act requires a notice in writing from the payee or holder in due course; it does not require an advocate. In practice the notice is usually issued through an advocate because the drafting has to satisfy the ingredients of the offence and the notice becomes a document in the prosecution.
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This format is provided for reference and is an assistive draft, not legal advice. Court practice varies between benches and districts and the rules change. Verify the provisions cited and the current filing requirements of the court you are filing in before you rely on any part of this page. Read the Legal Disclaimer.