Cheque Bounce Timeline: Notice, Payment Period and Complaint Under Section 138

The sequence

• The cheque must be presented within its validity, ordinarily three months from its date
• After the bank returns it unpaid for insufficient funds or because it exceeds the arrangement, the payee must send a written demand notice within thirty days of receiving the bank's information
• The drawer then has fifteen days from receipt of the notice to pay
• If payment is not made, the complaint must be filed within one month of the expiry of those fifteen days

The notice

The notice must demand payment of the cheque amount. It should state the cheque number, date, amount, bank, date of return and reason given by the bank. It is usually sent by registered post and, increasingly, also by email or messaging, keeping proof of dispatch and delivery.

If a deadline is missed

A complaint filed after one month may be entertained if the complainant shows sufficient cause for the delay, under the proviso to Section 142(1)(b). A notice sent after thirty days, however, generally cannot be cured; the cheque may sometimes be presented again within its validity and a fresh cause of action may then arise.

Where the complaint is filed

After the 2015 amendment to Section 142, the complaint is filed in the court within whose jurisdiction the payee's bank branch is situated, where the cheque was delivered for collection through an account. This overrides the earlier position in Dashrath Rupsingh Rathod v. State of Maharashtra (2014).

Documents for the complaint

• Original cheque and bank return memo
• Copy of the notice with postal receipts and tracking or acknowledgement
• Documents showing the debt or liability, such as invoices, agreements or loan records
• Affidavit of evidence of the complainant