Written and reviewed by Adv. Tanmay S. Shirsat, Advocate, High Court of Bombay. Consultations in English, Hindi and Marathi, in person or by video call. Last updated October 2026.
When Section 138 Applies
A complaint under Section 138 is generally possible when all of the following are true:
- The cheque was issued to pay a legally enforceable debt or liability
- It was presented to the bank within its validity period, which is currently three months from the date on the cheque
- It was returned unpaid, for example for insufficient funds, "exceeds arrangement", payment stopped by the drawer, or account closed
- A written demand notice was sent within 30 days of learning about the return
- The drawer did not pay within 15 days of receiving the notice
Once the cheque is proved to be signed by the drawer, Section 139 presumes it was issued for a debt. The drawer can try to rebut that presumption at trial. A cheque given as "security" can also attract Section 138 if the debt had become payable when it was presented.
The Timeline, Step by Step
- Cheque returned: The bank returns the cheque with a return memo giving the reason. Keep the original cheque and the memo together.
- Demand notice within 30 days: Send a written notice to the drawer within 30 days of receiving the bank's information about the return, demanding payment of the cheque amount.
- 15 days to pay: The drawer has 15 days from receiving the notice to pay. If they pay in full, the matter ends there.
- Complaint within one month: If payment is not made, the cause of action arises on the 16th day. The complaint must be filed within one month after that.
- Court process: The Magistrate examines the complaint and issues summons. Cases are generally tried summarily, and the court may also order interim compensation.
A complaint filed after the one-month deadline can be accepted only if the court condones the delay for sufficient cause, so it is far safer to diarise every date the day the memo arrives.
What the Demand Notice Should Contain
- The cheque number, date, amount and bank
- The date and reason of return, as stated in the bank's memo
- A clear demand for payment of the cheque amount within 15 days of receipt
- The transaction or debt for which the cheque was issued
Send it by registered post with acknowledgement due or by speed post to the drawer's correct address, and keep the receipts and the tracking report. Many people also send a copy by email or WhatsApp. If the notice comes back as "refused" or "unclaimed", it is usually treated as served.
Where to File in Mumbai
Since the 2015 amendment, Section 142(2) provides that the complaint is filed in the court having jurisdiction over the place where the payee's bank branch is situated, that is, where you presented the cheque for collection. In Mumbai this is the Metropolitan Magistrate court covering the area of that branch.
Where the cheque was issued by a company or firm, Section 141 allows the directors or partners who were in charge of its business to be named as well, subject to the facts.
Documents to Keep Ready
- The original returned cheque
- The bank's return memo
- A copy of the demand notice, with postal receipts and tracking or acknowledgement
- Proof of the debt: invoices, agreements, ledgers, bank transfers or messages
- Your bank statement showing the return
- Identity and address proof, and for a company, a board resolution or authority letter
What the Court Can Order
- Punishment: Imprisonment of up to two years, a fine of up to twice the cheque amount, or both.
- Interim compensation: Under Section 143A, the court may direct the drawer to pay up to 20 percent of the cheque amount during the trial.
- Appeal deposit: Under Section 148, an appeal against conviction may require a deposit of at least 20 percent of the fine or compensation.
- Settlement: The offence is compoundable under Section 147, so the parties can settle at any stage.
Common Questions
- Can I also file a civil suit: Yes. A summary suit under Order XXXVII of the Code of Civil Procedure can be filed for recovery of the money, alongside the criminal complaint.
- What if I missed the 30-day notice deadline: The cheque may be presented again within its validity period, and if it is returned again, a fresh 30-day period begins. Otherwise, civil recovery may still be possible.
- Does part-payment change things: It can. If part of the debt was paid before the cheque was presented, the cheque amount and the notice need careful review.
This guide is general information about the law as of October 2026 and is not legal advice. The right course depends on the facts, the documents and the dates in your case.