Cheque bounce: three deadlines that decide the whole case

The section 138 timeline

A dishonoured cheque given for a legally enforceable debt is an offence under section 138 of the Negotiable Instruments Act, 1881. Diary these four dates the day the cheque comes back:

1. Within 3 months — present the cheque within its validity and get the bank return memo, which states the reason (insufficient funds, account closed, signature mismatch and so on).
2. Within 30 days of the memo — send a demand notice to the drawer asking for payment.
3. 15 days — he gets 15 days from receiving the notice to pay.
4. Within 1 month after those 15 days end — file the complaint before the Judicial First Class Magistrate.

Punishment can extend to two years, or a fine up to twice the cheque amount, or both, and courts commonly order compensation. The court may also order interim compensation while the case is running.

Money lent with no cheque at all

Then it is a civil suit for recovery of money, filed in the civil court for the amount claimed; a summary procedure is available where the claim rests on a written promise. What wins these cases is proof, not paperwork: bank transfer records, messages acknowledging the loan, a promissory note or acknowledgement of debt, and witnesses.

The limitation period for a simple money claim is normally three years — from the date of the loan, or from the last acknowledgement. That second part is the useful one: a written or UPI acknowledgement restarts the clock. Even a WhatsApp message saying “I will pay next month” is an acknowledgement.

Cash lending is harder to prove and attracts income-tax restrictions on large cash transactions, so bank transfers are worth insisting on at the time of the loan.

When it is also a crime

Where the money was obtained by deception from the beginning, it may be cheating (BNS section 318). Where it was entrusted and then misappropriated, it may be criminal breach of trust (BNS section 316). But a simple refusal to repay a genuine loan is, by itself, usually a civil matter — the police will say so, and they are right. Criminal intent has to be shown by the facts.

Steps

1. Ask in writing and save the reply.
2. Send a registered legal notice with a deadline.
3. File the section 138 complaint if a cheque is involved, and the civil suit for the money.
4. Where the facts show deception from the start, add a police complaint.

Keep these ready

The cheque and the bank return memo; the notice, the postal receipt and the acknowledgement card; bank statements showing the transfer; the loan agreement or promissory note; and all the messages.

A cheque bounce case is also one of the matters a Lok Adalat can settle — with the court fee refunded.