Key points
- Send the demand notice within 30 days of receiving the bank's return memo; the accused then has 15 days to pay.
- File the complaint within one month after the 15-day period ends, in the court where the payee's bank branch is located.
- Interim compensation of up to 20% can be sought under Section 143A, and the offence can be settled at any stage.
Step by step
- Present the cheque and obtain the return memo
Present the cheque within its validity of three months. If dishonoured for insufficient funds, account closed, payment stopped or similar reasons, obtain the bank's return memo showing the date and reason. - Send the statutory demand notice
Within 30 days of receiving the memo, send a written notice to the drawer demanding payment of the cheque amount, by registered post and email or courier. Keep the postal receipt and tracking. - Wait 15 days
The drawer has 15 days from receipt of the notice to pay. If the notice returns unserved because the drawer refused it or the address was correct but unclaimed, service is presumed. - File the complaint
Within one month of the end of the 15-day period, file a complaint under Section 138 before the Metropolitan Magistrate having jurisdiction over the branch where you presented the cheque, with the cheque, memo, notice, proof of service and an affidavit of evidence under Section 145. - Summoning and trial
The court takes cognizance, issues summons, and on appearance the accused's plea is recorded. Cases are meant to be tried summarily and disposed of within six months, though in Delhi they often take longer. Seek interim compensation under Section 143A at the notice stage. - Judgment and recovery
On conviction the court can order fine up to twice the cheque amount and compensation. The compensation is recovered as a fine, and the accused can be sentenced to imprisonment up to two years.
Why the timelines matter
Each deadline in Section 138 is a condition of the offence. A notice sent on the 31st day, or a complaint filed a week late without an application to condone delay under Section 142(b), will be dismissed regardless of the merits. Calendar the dates on the day the memo arrives.
Jurisdiction
Since the 2015 amendment, the complaint is filed where the payee's bank branch (for cheques presented through an account) is located. For a Delhi payee, this means the Delhi court for the police station area of the branch.
Parallel civil recovery
A Section 138 complaint punishes the offence and yields compensation, but a civil summary suit can be filed in parallel for the debt with interest. Where the drawer is a company owing over one crore rupees, an IBC demand notice is a further option.
Frequently asked questions
What if the drawer's address has changed?
Send the notice to the address in the cheque or your records and to any known email; a notice returned as 'left' or 'refused' is generally treated as served. The complaint should explain the attempts made.
Can a complaint be filed on a post-dated or security cheque?
Yes, provided the cheque was issued for a legally enforceable debt that had fallen due when the cheque was presented.
Related practice area: Debt Recovery
This article is for general information and does not constitute legal advice. Laws, rules and limitation periods change and depend on the facts; please take advice on your own situation before acting. Reading this article does not create a lawyer-client relationship with Akhtars Legalitarian.