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Cheque bounce cases are among the most common financial disputes in India. What many people do not realise is that a bounced cheque is not just a financial inconvenience, it is a legal issue with serious consequences. The law treats cheque dishonour as an offence, and the first formal step to enforce your rights is sending a legal notice under Section 138 of the Negotiable Instruments Act.
A properly drafted cheque bounce notice gives the drawer of the cheque a final opportunity to make payment and helps you build a strong legal record before taking the matter to court.
Why is a Bounced Cheque a Legal Issue?
A cheque is considered a promise to pay. When someone issues a cheque knowing that it may not be honoured, or when it gets dishonoured due to insufficient funds, it affects trust in financial transactions.
Under the cheque bounce law, dishonour of a cheque for reasons like insufficient funds, account closed, or payment stopped can attract criminal liability. That is why cheque bounce is treated seriously under the Negotiable Instruments Act and is not just a civil dispute.
Check our detailed blog on Legal Notice vs Court Notice to know the difference between both types of notice.
What is Legal Notice under Section 138?
A legal notice under Section 138 of the Negotiable Instrument Act is a formal demand notice sent by the payee to the drawer of the cheque after the cheque is dishonored.
This notice demands payment of the cheque amount within a specific time and informs the drawer that failure to pay will result in legal action under Section 138 NI Act. It is also commonly referred to as a cheque bounce notice or demand notice under Section 138.
Sending this notice is mandatory before filing a cheque bounce case in court.
What Makes Cheque Bounce Legal Notice Valid?
For a 138 legal notice to be legally valid, certain conditions must be met.
- The cheque must have been issued for a legally enforceable debt or liability.
- The cheque should be presented within its validity period.
- After the cheque is dishonoured, the notice must be sent within the prescribed time limit.
- The notice should clearly demand payment of the cheque amount and give the drawer a chance to pay.
- Any mistake in timing or content can weaken the case.
What Are the Important Points to Be Included in the Cheque Bounce Notice?
A proper legal notice 138 NI Act format should include the details such as:
- Parties involved
- Details of the cheque, such as number, date, amount, bank number, bank branch and all other important details.
- Dishonour details
- Reason for cheque bounce
- Request for immediate arrangement of payment if the amount
The notice must clearly demand payment of the cheque amount and specify the time period given to make the payment. It should also state that failure to comply will result in legal proceedings under Section 138 of the NI Act.
What Are the Legal Notice Charges for Cheque Bounce?
The charges for sending a cheque bounce notice depend on the complexity of the case and the advocate drafting the legal notice. Offline legal notices may involve higher costs due to consultations and paperwork. The online platforms generally offer more affordable and transparent pricing. Using an online service helps reduce costs while ensuring that the notice is drafted correctly and sent on time. Usually, it depends upon the bank and the amount that the cheque holds.
How to Make Legal Notice under Section 138 for Cheque Bounce?
Preparing a legal notice under Section 138 requires attention to detail and strict compliance with timelines. With us, the process is simple and online.
- Visit edrafter.in and choose the Legal Notice Service in the Services section in the main menu.
- Once you are redirected to the Legal Notice page, share the cheque details and dishonour information. Later an advocate drafts the notice based on the requirements of the Negotiable Instruments Act.
- You get a chance to review the draft before it is sent.
- Once finalised, the notice is dispatched through legally accepted modes with proof of sending.
What Is the Limitation Period for 138 Notice?
Timing is critical in cheque bounce cases. The legal notice must be sent within 30 days from the date you receive information from the bank about the dishonor of the cheque.
After the notice is received, the drawer gets 15 days to make the payment. If payment is not made within this period, a complaint under Section 138 can be filed within the next 30 days. Missing these deadlines can result in dismissal of the case.
Section 138 of the NI Act
Section 138 of the Negotiable Instruments Act deals specifically with cheque dishonour due to insufficient funds or similar reasons. It makes cheque bounce a punishable offence.
If convicted, the drawer may face imprisonment, a fine, or both. The section aims to promote trust in financial transactions and discourage misuse of cheques.
What Are the Consequences of Cheque’s Dishonour?
Dishonour of a cheque can lead to criminal prosecution. The drawer may be summoned to court and face penalties under law.
Apart from legal consequences, cheque bounce can also damage the person’s financial credibility and business reputation. That is why many disputes get resolved at the legal notice stage itself.
What Is the 138 NI Act Procedure?
The procedure starts with presenting the cheque to the bank. If it is dishonoured, the bank issues a return memo.
The payee then sends a legal notice under Section 138 within the prescribed time. If the drawer fails to pay within 15 days of receiving the notice, a complaint is filed before the magistrate. The court then proceeds with the trial as per law.
Frequently Asked Questions
Can a cheque bounce legal notice be sent by email and WhatsApp?
Yes, legal notices can be sent through email and WhatsApp along with traditional modes. Courts have recognised electronic communication, but it is safer to use multiple modes to ensure proof of delivery.
What if the other party refuses to accept the notice?
Refusal to accept a legal notice is treated as valid service. If the notice was properly sent, you can proceed with legal action even if the recipient refuses to receive it.
Suhani Sugandha – Legal Intern & Content Writer
Suhani is a legal content writer and researcher studying at the National University of Study and Research in Law, Ranchi. Specializing in simplifying complex legal concepts, Suhani creates clear, engaging, and well-researched content, including legal blogs, case analyses, research articles, and policy reviews. Passionate about making legal information accessible to all, Suhani bridges the gap between law and the public through informative and insightful writing. With a keen eye for detail and a strong legal foundation, She ensures accuracy and clarity in every piece, helping individuals and businesses navigate legal matters with confidence.