27/02/2026
What to Do If a Cheque Bounces?
A cheque bounce is not just a banking issue; it can lead to criminal liability under the Negotiable Instruments Act, 1881 (Section 138). If someone issues a cheque that is dishonoured due to insufficient funds or other valid reasons, the law provides a clear remedy.
1. Receive the Cheque Return Memo
The bank will issue a memo stating the reason for dishonour (e.g., insufficient funds, signature mismatch, etc.)
2. Send a Legal Notice (Within 30 Days)
The payee must send a written demand notice to the drawer within 30 days of receiving information about the dishonour.
3. Wait 15 Days for Payment
The drawer has 15 days from receipt of notice to make payment.
4. File a Complaint (Within 1 Month)
If payment is not made within 15 days, a criminal complaint can be filed before the Magistrate within 30 days thereafter.
Penalty:- The drawer may face:- Imprisonment up to 2 years, or Fine up to twice the cheque amount, or Both.
