Cheque Bounce Notice under Section 138 NI Act: Format and Timeline

By LegalInk Editorial · 2026-06-10

Cheque Bounce Notice under Section 138 NI Act: Format and Timeline

A cheque dishonour becomes a criminal offence under Section 138 of the Negotiable Instruments Act, 1881 only after a valid demand notice is served and the drawer fails to pay within the prescribed window. The notice must be dispatched within 30 days of receiving the bank's dishonour memo, and the drawer must be given 15 days from receipt to make payment. Miss either deadline and the cause of action is extinguished.

Why the Demand Notice Is the Cornerstone of Section 138

Section 138 operates on a three-stage structure: dishonour, demand, and default. The demand notice is a statutory precondition, not a procedural formality. Without a valid notice, the Magistrate cannot take cognisance under Section 142 NI Act, however clear the dishonour.

The notice must communicate three things unambiguously: the fact of dishonour, the amount due, and a demand for payment. A letter that merely informs the drawer of the bounce without calling for payment does not satisfy the statute.

The Mandatory Timeline: Three Dates to Track

Date 1 — Dishonour memo from the bank

The clock starts when the payee (or holder in due course) receives the bank's return memo, not when the bank processes the transaction internally. Preserve this document — it anchors the entire timeline.

Date 2 — Dispatch of the demand notice (within 30 days)

The notice must be sent within 30 days of receiving the dishonour memo. Dispatch on Day 31 is fatal to the complaint. Send by registered post with acknowledgement due (RPAD), and as a matter of practice, simultaneously by speed post and email. Once the notice is properly addressed and posted, the dispatch obligation is complete — non-receipt by the accused does not by itself defeat the notice.

Date 3 — Expiry of the 15-day payment window

The drawer has 15 days from receipt of the notice to pay in full. Payment within this period extinguishes the offence. On Day 16, the cause of action crystallises, and the complaint must then be filed within 30 days of that default date under Section 142.

Quick reference:

• Dishonour memo received → notice dispatched: ≤ 30 days
• Notice received by drawer → payment window: 15 days
• Drawer defaults on Day 16 → complaint filed: ≤ 30 days

Section 138 Notice Format: What Must Be Included

A well-drafted notice contains the following. Each element maps to a statutory or evidentiary requirement.

Mandatory content:

• Name, address, and description of the complainant (payee or holder in due course)
• Name and address of the drawer
• Cheque particulars: number, date, drawn-on bank, branch, and amount
• Underlying transaction — loan, supply of goods, services rendered — establishing "legally enforceable debt or liability"
• Name and branch of the presenting bank, and date of presentation
• Date of receipt of the dishonour memo and the reason cited (typically "funds insufficient" or "account closed")
• A clear, unconditional demand for payment of the dishonoured amount
• A statement that the drawer has 15 days from receipt to pay
• A warning that failure to pay will result in prosecution under Section 138 NI Act

Practical notes on format:

The notice should be on the firm's letterhead, signed by the advocate on record, and addressed to the drawer at their last known address. Where the drawer is a company, address it to the registered office and, separately, to each director or officer sought to be made vicariously liable under Section 141 NI Act. Send individual notices rather than a combined one to avoid ambiguity about personal service.

Retain the postal receipt, the returned envelope (if undelivered), and any email delivery records. These form part of the evidence at the complaint stage.

For a ready template that auto-populates cheque details and computes notice dates, see the Section 138 notice draft on LegalInk. The brief generator can then structure the accompanying complaint once the 15-day window lapses.

Common Drafting Errors That Sink Section 138 Complaints

Vague description of the underlying liability

Complaints have been dismissed where the notice stated only "towards payment" without specifying the nature of the debt. Be specific: "towards part payment of the loan of ₹X advanced on [date]" or "towards supply of goods under invoice number Y dated Z".

Wrong addressee for corporate drawers

If the cheque is issued by a company, the notice must go to the company's registered office. To prosecute directors under Section 141, send them individual notices as well. A single notice addressed to "M/s XYZ and its directors" is open to challenge.

Relying on email alone

Email alone does not satisfy the dispatch requirement in most jurisdictions. Registered post remains the safest mode; email and WhatsApp are corroborative, not primary proof of service.

Calculating the 30-day window from the wrong date

The period runs from the date of receipt of the dishonour memo, not the date of dishonour or the date of presentation. Where the memo arrives by post, document the date of its receipt carefully.

Section 141 NI Act: Notices to Directors and Officers

Where the drawer is a company, firm, or other body corporate, every person responsible for the conduct of its business at the time of the offence is deemed liable under Section 141 NI Act. Send individual demand notices to each such person simultaneously with the notice to the entity. Failure to do so may limit prosecution against them personally, even if the complaint against the company proceeds.

The Section 138 templates on legalink.co.in include a separate director-notice variant to address this requirement directly.

Frequently Asked Questions

Can a Section 138 notice be sent by WhatsApp or email alone?

Courts have not uniformly accepted electronic-only dispatch as sufficient. RPAD remains the standard. Use email or WhatsApp as supplementary channels and always follow up with a physical dispatch.

What if the drawer refuses to accept the registered post?

Refusal to accept a properly addressed registered letter is treated as valid service in a consistent line of High Court rulings. Preserve the returned envelope with the postal endorsement — it is admissible evidence of deemed service.

Does the notice need to quote "Section 138 NI Act" explicitly?

There is no statutory requirement to cite the section. What matters is an unambiguous demand for payment and a warning of legal consequences. That said, citing Section 138 expressly is standard practice and removes any doubt about the character of the notice.

What if two cheques bounce — do I send two separate notices?

Yes. Each dishonoured cheque is a separate cause of action and requires its own demand notice. Complaints may be consolidated before the Magistrate later if the facts permit.

For a pre-structured Section 138 notice with auto-calculated timelines, use the LegalInk drafting tool or generate the accompanying complaint via the brief generator.

Statute citations in this article are verified against LegalInk's verified law registry before publication. Always confirm the current text of any provision before relying on it.

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