Cheque Bounce Case FAQs: Section 138 NI Act Notice, Time Limits, Jurisdiction, Defences, Compounding, Appeals and the 2025 Supreme Court Directions

A cheque bounce case in India is a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). It can be filed only if the cheque was given for a legally enforceable debt or liability, was presented in time, was returned unpaid for want of funds or because it exceeded the arrangement with the bank, and the drawer failed to pay within fifteen days of receiving a written demand notice. This page answers the questions most often asked about these cases, from who can file and where, to how many cheques can go in one complaint, what the accused can do, how a case can be settled and where an appeal lies. It includes the changes made by the Supreme Court in 2025, when it revised the compounding costs and issued new directions on summons, online payment and the form of complaints, and it includes a Hindi summary.

Reviewed and updated by Century Law Firm, Delhi – October 2026. Statutory references are to the Acts as in force on that date.

The law in brief: Section 138 and its three conditions

Section 138 applies where a cheque drawn by a person on an account maintained by him, for the discharge in whole or in part of any debt or other liability, “is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank”. The drawer is then deemed to have committed an offence, 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”. The Explanation to the section, as reproduced by the Supreme Court in Indian Bank Association v. Union of India (21 April 2014), says that “debt or other liability” means “a legally enforceable debt or other liability.”

The proviso then sets three conditions, all of which must be met. First, the cheque must have been presented to the bank “within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier”. Since the Reserve Bank of India’s circular of 4 November 2011, issued under Section 35A of the Banking Regulation Act, 1949, banks do not pay cheques dated on or after 1 April 2012 if they are “presented beyond the period of three months from the date of such instrument”, so in practice the period is three months. Second, the payee or holder in due course must make a demand for payment “by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid”. Third, the drawer must have failed to pay the amount “within fifteen days of the receipt of the said notice.”

Chapter XVII of the Act, containing Sections 138 to 142, came into force on 1 April 1989, and Sections 143 to 147 were added by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002, in force from 6 February 2003, as the Supreme Court recorded in its 2021 judgment on expeditious trial. In 2015 Section 142 was amended and Section 142A inserted, with effect from 15 June 2015, and Act No. 20 of 2018 brought Sections 143A and 148 on to the statute book with effect from 1 September 2018, as the Supreme Court noted in Rakesh Ranjan Shrivastava (2024).

Filing: who, where and when

Under Section 142(1)(a), no court can take cognizance of the offence “except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque”. Under Section 142(1)(b), the complaint must be made “within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138”, that is, within a month after the fifteen days from receipt of the notice run out without payment. The proviso allows cognizance after that period “if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period.” In S. Nagesh v. Shobha S. Aradhya (6 January 2026), the Supreme Court quashed a complaint that was filed two days late because the Magistrate had taken cognizance before condoning the delay; “The satisfaction in that regard, resulting in condonation of the delay, must therefore precede the act of taking cognizance.” Section 142(1)(c) adds that no court below a Metropolitan Magistrate or a Judicial Magistrate of the first class can try the offence.

The place of filing has changed more than once. In Dashrath Rupsingh Rathod v. State of Maharashtra (1 August 2014), a bench of three judges held that the case could be tried only where the drawee bank, the drawer’s bank, was located. The law was then amended with effect from 15 June 2015. Under Section 142(2)(a), if the cheque is delivered for collection through an account, the case is tried by the court within whose jurisdiction “the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated”; under Section 142(2)(b), if the cheque is presented otherwise than through an account, by the court where the drawer’s branch is. The Explanation adds that a cheque delivered for collection at any branch of the payee’s bank is deemed delivered to the branch where the payee maintains the account. In Jai Balaji Industries v. HEG Ltd (28 November 2025), the Supreme Court held that jurisdiction for an account payee cheque “is vested in the court within whose local jurisdiction the branch of the bank in which the payee maintains the account, i.e., the payee’s home branch, is situated”, and declared the contrary view in Yogesh Upadhyay “per incuriam”. Section 142A(2) further provides that once a complaint against a drawer is pending in the court having jurisdiction, “all subsequent complaints arising out of section 138 against the same drawer shall be filed before the same court irrespective of whether those cheques were delivered for collection or presented for payment within the territorial jurisdiction of that court.”

How many cheques can go in one complaint?

This is one of the most searched questions, and the answer depends on whether the cheques are part of the same transaction. Section 242(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), in force from 1 July 2024, says that a person accused of more offences than one of the same kind committed within twelve months “may be charged with, and tried at one trial for, any number of them not exceeding five.” Its predecessor, Section 219 of the Code of Criminal Procedure, 1973, allowed, as the Supreme Court noted in 2021, “a maximum of three such offences”. Section 243(1) of the BNSS (formerly Section 220 CrPC) separately allows every offence committed “in one series of acts so connected together as to form the same transaction” to be tried at one trial. In In Re: Expeditious Trial of Cases under Section 138 of N.I. Act (16 April 2021), a bench of five judges said: “There is no ambiguity in Section 220 in accordance with which several cheques issued as a part of the same transaction can be the subject matter of one trial.” The same judgment recommended an amendment to the NI Act to allow one trial for Section 138 offences committed within twelve months, and requested the High Courts to issue practice directions asking trial courts to treat service of summons in one complaint forming part of a transaction as deemed service in respect of all the complaints filed before the same court relating to that transaction.

The trial: summary procedure, affidavits and the 2025 directions

Section 143 directs that offences under the Chapter be tried by a Judicial Magistrate of the first class or a Metropolitan Magistrate, applying the summary-trial provisions of the Code “as far as may be”. In a summary trial the Magistrate may pass “a sentence of imprisonment for a term not exceeding one year and an amount of fine exceeding five thousand rupees”, but if it appears that a sentence exceeding one year may be needed, or summary trial is otherwise undesirable, the Magistrate must record an order and rehear the case as a regular trial. Section 143(3) says an endeavour “shall be made to conclude the trial within six months from the date of filing of the complaint.” Under Section 145(1), the complainant’s evidence “may be given by him on affidavit”, and under Section 145(2) the court may, and on the application of either side shall, summon and examine the person who gave it. Under Section 146, the bank’s slip or memo showing dishonour is presumed to be prima facie evidence of the fact of dishonour.

The Supreme Court itself speaks of “the massive backlog of cheque bouncing cases”. It recorded in 2021 that as on 31 December 2019, out of 2.31 crore criminal cases pending, “35.16 lakh pertained to Section 138 of the Act.” To reduce delay, in Sanjabij Tari v. Kishore S. Borcar (25 September 2025, Justices Manmohan and N.V. Anjaria), it issued directions that the High Courts and District Courts were to implement by 1 November 2025. Summons are to be served not only through the usual modes but also “dasti”, that is, by the complainant, and by electronic means under the applicable rules, for which the complainant must give the accused’s e-mail address, mobile number or WhatsApp details “duly supported by an affidavit”. District courts are to set up online payment through secure QR codes or UPI links, and the summons is to tell the accused that the cheque amount can be paid at the initial stage. Every complaint must begin with a synopsis in a set format covering the parties, the cheque, the dishonour, the notice and its delivery, the cause of action and jurisdiction, and whether interim compensation under Section 143A is sought. Trial courts must record “cogent and sufficient reasons before converting a summary trial to summons trial”, and should use the power to order interim deposit under Section 143A “as early as possible” where they consider it appropriate. The Delhi High Court issued Practice Directions No. 157/Rules/DHC dated 6 November 2025 to apply these directions in Delhi, and they record that no summons under Section 223 of the BNSS is required at the pre-cognizance stage.

Presumption, defences and cross-examination

Section 139 says: “It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.” In Rangappa v. Sri Mohan, (2010) 11 SCC 441, a bench of three judges held that this presumption “does indeed include the existence of a legally enforceable debt or liability”, while noting that it is “in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested.” In Sanjabij Tari (2025) the Court repeated that the presumption is rebuttable but that “the initial onus of proving that the cheque is not in discharge of any debt or other liability is on the accused/drawer of the cheque”.

How the accused rebuts it was summarised in Basalingappa v. Mudibasappa, (2019) 5 SCC 418, as quoted in Tedhi Singh v. Narayan Dass Mahant (7 March 2022). The onus is “on the accused to raise the probable defence”, and “The standard of proof for rebutting the presumption is that of preponderance of probabilities.” The accused may “rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence”, and “It is not necessary for the accused to come in the witness box to support his defence.” This is why cross-examination of the complainant matters so much in these cases. It usually tests whether there really was a debt or liability and whether it was legally enforceable, how much was given, when and how, the circumstances in which the cheque was handed over, and whether the notice was properly sent and received. The questions that the 2025 directions allow a trial court to put to the accused at the first stage, about ownership of the cheque, the signature, issuance, liability on the date of issue, and defences such as a security cheque, repayment or alteration, show the usual lines of defence. According to the official SCR headnote of a Supreme Court judgment of 9 April 2019 (Criminal Appeal No. 636 of 2019, [2019] 6 SCR 555), the accused’s evidence there was a probable defence “which shifted the burden”, and “It was incumbent on the complainant to have explained his financial capacity”. One argument that does not work on its own is also worth knowing: in Sanjabij Tari, the Court held that “any violation of Section 269SS would not render the transaction unenforceable under Section 138”, so a cash loan taken in breach of that income-tax provision is not, for that reason alone, outside Section 138. In the same judgment it pointed out that its earlier decision in APS Forex “nowhere states” that the presumption does not arise where the loan was in cash.

Companies, firms and their directors

Under Section 141(1), if the person committing the offence is a company, “every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company”, is deemed guilty, unless he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent it. Under Section 141(2), a director, manager, secretary or other officer with whose consent or connivance, or through whose neglect, the offence was committed is also liable. A director nominated because of an office or employment in the Central or State Government, or a financial corporation owned or controlled by either, “shall not be liable for prosecution under this Chapter.” For this section, “company” means any body corporate “and includes a firm or other association of individuals”, and a director of a firm means a partner. In Aneeta Hada v. Godfather Travels and Tours, (2012) 5 SCC 661, a bench of three judges held that “for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative.”

Insolvency does not end the case against individuals. In P. Mohanraj v. Shah Brothers Ispat, (2021) 6 SCC 258, as explained in Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation of India (15 March 2023), the Court held that the moratorium under Section 14 of the Insolvency and Bankruptcy Code covers Section 138 proceedings against the corporate debtor, but that such proceedings “can be initiated or continued against the persons mentioned in Sections 141(1) and (2)”. In Rakesh Bhanot v. Gurdas Agro (1 April 2025), dealing with the interim moratorium under Section 96 of the Code that follows a personal insolvency application, it held that the object of the moratorium “is not to stall the criminal prosecution, but to only postpone any civil actions to recover any debt.”

Interim compensation and the deposit on appeal

Section 143A allows the trial court to order the drawer to pay interim compensation to the complainant, in a summary trial or summons case where the accused pleads not guilty, or otherwise upon framing of charge. It “shall not exceed twenty per cent of the cheque amount”, must be paid within sixty days (extendable by thirty days for sufficient cause), is repayable with interest if the accused is acquitted, and is adjusted against any fine or compensation finally awarded. In Rakesh Ranjan Shrivastava v. State of Jharkhand (15 March 2024), the Court held that “the power under sub-section (1) of Section 143A is discretionary”; the court must “prima facie evaluate the merits of the case made out by the complainant”, “The presumption under Section 139 of the N.I. Act, by itself, is no ground to direct the payment”, and brief reasons must be recorded. In G.J. Raja v. Tejraj Surana (30 July 2019), as quoted in Surinder Singh Deswal (8 January 2020), the Court held Section 143A to be “prospective in nature and confined to cases where offences were committed after the introduction of Section 143A”.

Section 148(1) allows the appellate court, in an appeal by the drawer against conviction, to order the appellant to deposit “a minimum of twenty per cent of the fine or compensation awarded by the trial Court”, in addition to any interim compensation already paid, within sixty days (extendable by thirty days). The amount can be released to the complainant during the appeal and must be repaid with interest if the appellant is acquitted. In Surinder Singh Deswal v. Virender Gandhi (29 May 2019), the Court held that amended Section 148 applies to appeals against conviction “even in a case where the criminal complaints for the offence Under Section 138 of the N.I. Act were filed prior to amendment Act No. 20/2018 i.e., prior to 01.09.2018.” In Jamboo Bhandari v. M.P. State Industrial Development Corporation (4 September 2023), the Court clarified that while “normally, Appellate Court will be justified in imposing the condition of deposit”, an exception can be made, for reasons specifically recorded, where the condition would be unjust or would amount to deprivation of the right of appeal.

Settlement and compounding

Section 147 says that “every offence punishable under this Act shall be compoundable.” In Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663, the Supreme Court had laid down graded costs for late compounding: none at the first or second hearing, 10% of the cheque amount before the Magistrate after that, 15% before the Sessions Court or High Court, and 20% before the Supreme Court. Noting that interest rates had fallen and that a very large number of cases were still pending, the Court revised these in Sanjabij Tari (2025). If the accused pays the cheque amount before his evidence (the defence evidence) is recorded, the trial court may allow compounding “without imposing any cost or penalty on the accused”. If he pays after his evidence but before judgment, compounding may be allowed on payment of an additional 5% of the cheque amount to the Legal Services Authority or such other authority as the court directs. Before the Sessions Court or High Court in revision or appeal the cost is 7.5%, and before the Supreme Court it is 10%. Where the complainant demands more than the cheque amount, the judgment suggests that the Magistrate may consider a plea of guilty or relief under the Probation of Offenders Act, 1958. The five-judge bench also held in 2021 that “Section 258 of the Code is not applicable to complaints under Section 138 of the Act”, and that an earlier judgment, Meters and Instruments, “in so far as it conferred power on the Trial Court to discharge an accused is not good law.”

Appeals after conviction or acquittal

A person convicted by a Magistrate may appeal to the Court of Session under Section 415(3) of the BNSS (formerly Section 374 CrPC). Under Section 430(3), where the convicted person, being on bail, is sentenced to imprisonment not exceeding three years and satisfies the convicting court that he intends to appeal, the court shall release him on bail, unless there are special reasons for refusing, for long enough to file the appeal and obtain orders from the appellate court. The deposit under Section 148 may then be ordered by the appellate court.

If the accused is acquitted, the complainant has two routes. One is to seek special leave to appeal from the High Court under Section 419(4) of the BNSS (formerly Section 378(4) CrPC), which, under Section 419(5), must be applied for within sixty days of the acquittal, or six months where the complainant is a public servant. The other was recognised in Celestium Financial v. A. Gnanasekaran (8 April 2025, Justices B.V. Nagarathna and Satish Chandra Sharma): the complainant in a Section 138 case “is indeed the victim owing to the alleged dishonour of a cheque”, and can therefore appeal against acquittal in his own right under the proviso to Section 372 of the CrPC “without having to seek special leave under Section 378(4)”. The corresponding provision in the BNSS is the proviso to Section 413, under which a victim’s appeal “shall lie to the Court to which an appeal ordinarily lies against the order of conviction of such Court”, which for a Magistrate’s judgment is the Court of Session.

चेक बाउंस केस – हिंदी में

चेक बाउंस का मामला परक्राम्य लिखत अधिनियम, 1881 (Negotiable Instruments Act) की धारा 138 के तहत आपराधिक शिकायत है। यदि किसी कानूनी रूप से वसूली योग्य कर्ज़ या दायित्व के लिए दिया गया चेक खाते में पर्याप्त राशि न होने से, या बैंक से तय व्यवस्था से अधिक होने के कारण, लौट आए, तो चेक जारी करने वाले को दो साल तक की कैद, चेक की राशि के दोगुने तक जुर्माना, या दोनों हो सकते हैं। इसके लिए तीन शर्तें हैं: चेक उसकी वैधता अवधि में बैंक में प्रस्तुत हुआ हो (1 अप्रैल 2012 या उसके बाद की तारीख वाले चेक के लिए, चेक की तारीख से तीन महीने); बैंक से सूचना मिलने के 30 दिनों के भीतर लिखित डिमांड नोटिस भेजा गया हो; और नोटिस मिलने के 15 दिनों में भुगतान न किया गया हो। इसके बाद एक महीने के भीतर शिकायत दायर करनी होती है; देरी होने पर पर्याप्त कारण दिखाकर देरी माफ कराई जा सकती है, पर सुप्रीम कोर्ट (एस. नागेश, 2026) के अनुसार देरी की माफी संज्ञान (cognizance) लेने से पहले होनी चाहिए।

खाते के माध्यम से जमा किए गए चेक के मामले में शिकायत उस अदालत में होगी जहाँ प्राप्तकर्ता (payee) की वह शाखा है जिसमें उसका खाता है (धारा 142(2), जय बालाजी इंडस्ट्रीज़, 2025)। BNSS की धारा 242 के अनुसार बारह महीनों के भीतर किए गए एक ही प्रकार के अधिकतम पाँच अपराधों का एक साथ विचारण हो सकता है, और धारा 243 के अनुसार एक ही संव्यवहार (same transaction) के कई चेकों का एक ही विचारण हो सकता है। धारा 139 के तहत यह उपधारणा (presumption) होती है कि चेक कर्ज़ या दायित्व के भुगतान के लिए दिया गया था; आरोपी संभाव्य बचाव (probable defence) उठाकर, अधिसंभावनाओं की प्रबलता (preponderance of probabilities) के स्तर पर, इसका खंडन कर सकता है, और इसके लिए उसका स्वयं गवाही देना ज़रूरी नहीं है।

चेक बाउंस के नए नियम (संजाबिज तारी, 25 सितंबर 2025): समन सामान्य तरीकों के साथ दस्ती और ई-मेल/व्हाट्सऐप जैसे इलेक्ट्रॉनिक माध्यम से भी भेजे जाएँगे; QR कोड या UPI से ऑनलाइन भुगतान की सुविधा होगी; हर शिकायत के साथ तय प्रारूप में सारांश (synopsis) लगेगा। समझौते (compounding) पर नई लागत: बचाव पक्ष के साक्ष्य से पहले भुगतान करने पर कोई लागत नहीं; उसके बाद पर निर्णय से पहले 5%; सत्र न्यायालय या हाई कोर्ट में 7.5%; और सुप्रीम कोर्ट में 10%। ट्रायल कोर्ट धारा 143A में चेक राशि का 20% तक अंतरिम मुआवज़ा दिला सकता है, और दोषसिद्धि के विरुद्ध अपील में धारा 148 के तहत अपीलीय अदालत ट्रायल कोर्ट द्वारा लगाए गए जुर्माने या मुआवज़े का कम से कम 20% जमा कराने का आदेश दे सकती है। बरी होने पर शिकायतकर्ता पीड़ित (victim) के रूप में अपील कर सकता है (सेलेस्टियम फाइनेंशियल, 2025)।

Frequently asked questions

Conclusion

Cheque bounce cases turn on dates and documents. The complainant must meet each step of the proviso to Section 138 and file in time and in the right court; the accused’s case usually turns on whether a legally enforceable debt really existed and whether the statutory steps were followed. The Supreme Court’s 2025 decisions have made the process faster and cheaper to settle: payment at the first stage can be made online, compounding before defence evidence costs nothing extra, the home branch of the payee decides jurisdiction, and a complainant can now appeal an acquittal as a victim. Anyone facing either side of such a case should keep the cheque, the return memo, the notice and the proof of delivery safely, because almost every question in the case is answered by them.

Sources used for this post: the Negotiable Instruments Act, 1881, Sections 138 to 148, as reproduced or summarised in Supreme Court judgments (Indian Bank Association v. Union of India, 21 April 2014; Shri Sendhur Agro and Oil Industries v. Kotak Mahindra Bank, 6 March 2025; Rakesh Ranjan Shrivastava v. State of Jharkhand, 15 March 2024; Muskan Enterprises v. State of Punjab, 19 December 2024; Celestium Financial v. A. Gnanasekaran, 8 April 2025; Rakesh Bhanot v. Gurdas Agro, 1 April 2025; Jai Balaji Industries v. HEG Ltd, 28 November 2025); the Bharatiya Nagarik Suraksha Sanhita, 2023, Sections 223, 242, 243, 413, 415, 419, 430 and 528 (the firm’s section-by-section data checked against the Gazette text); the RBI circular RBI/2011-12/251 of 4 November 2011; the Delhi High Court’s Practice Directions No. 157/Rules/DHC of 6 November 2025; and the Supreme Court’s own copies of In Re: Expeditious Trial of Cases under Section 138 of N.I. Act (16 April 2021), Surinder Singh Deswal v. Virender Gandhi (29 May 2019 headnote and 8 January 2020, quoting G.J. Raja), Uttam Ram v. Devinder Singh Hudan (17 October 2019, quoting Rangappa), Tedhi Singh v. Narayan Dass Mahant (7 March 2022, quoting Basalingappa), Criminal Appeal No. 636 of 2019 (9 April 2019, SCR headnote), Dayle De’Souza v. Government of India (29 October 2021, quoting Aneeta Hada), Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation of India (15 March 2023, on P. Mohanraj), Jamboo Bhandari v. MPSIDC (4 September 2023), Sanjabij Tari v. Kishore S. Borcar (25 September 2025, quoting Damodar S. Prabhu) and S. Nagesh v. Shobha S. Aradhya (6 January 2026).