Under Section 138 of the NI Act, you must send the legal notice to the person who issued the cheque (the drawer) within 30 days of receiving the ‘cheque return memo’ from your bank.

If the drawer fails to make the full payment within 15 days of receiving the notice, you gain the ’cause of action.’ You can then file a criminal complaint under Section 138 against them in the appropriate magistrate’s court within the next 30 days.

No. Section 138 applies only when a cheque is issued for the ‘discharge, in whole or in part, of any debt or other liability.’ A cheque given as a gift, donation, or as a security deposit that is not meant for immediate encashment does not fall under this category.

A ‘cheque return memo’ is an official document issued by the bank when a cheque is dishonored. It states the reason for the bounce (e.g., ‘insufficient funds,’ ‘signature mismatch’). It is a mandatory and critical piece of evidence to prove the dishonor of the cheque in court.

Yes. Under Section 141 of the NI Act, every person who was in charge of and responsible for the conduct of the business of the company at the time the offence was committed, including directors, can be held liable for a cheque bounced by the company.

If you have sent the notice via Registered Post to the correct and last known address of the drawer, and it is returned with a postal remark like ‘Refused’ or ‘Not Claimed,’ it is considered a ‘deemed service.’ The law presumes they have received it, and you can proceed with filing the case.

Yes, a cheque bounce case is a ‘compoundable offense,’ which means it can be settled out of court at any stage of the proceedings. If the drawer agrees to pay the amount (often with interest or costs), the case can be withdrawn.

While you can draft it yourself, it is highly advisable to have a lawyer draft and send the notice. The notice has very specific legal requirements, and any error can make your entire case invalid. A notice from a lawyer also shows greater seriousness.

If found guilty under Section 138, the drawer can face imprisonment for a term which may extend to two years, or a fine which may extend to twice the amount of the cheque, or both.

Yes, dishonor of a cheque due to ‘signature mismatch’ is also covered under Section 138. The drawer has a duty to ensure their signature on the cheque matches the one in the bank’s records.

As per RBI guidelines, a cheque is valid for three months from the date written on it. You must present the cheque to the bank within this period for it to be honored.

Yes, you can redeposit a cheque multiple times as long as it is within its three-month validity period. However, the 30-day timeline for sending the legal notice begins from the date you receive the cheque return memo for the *last* instance of dishonor.

If a cheque is dishonored with the reason ‘Account Closed,’ it is also an offense under Section 138. You can send a legal notice and file a criminal complaint in the same manner as for ‘insufficient funds’.

You can prove a legally enforceable debt using documents like invoices, loan agreements, promissory notes, account statements, or any written communication acknowledging the debt. The law initially presumes the cheque was for a debt, and the burden is on the drawer to prove otherwise.

While courts have started to recognize electronic communication, the Negotiable Instruments Act specifically requires a notice ‘in writing.’ The safest and most legally sound method is to send a physical copy via Registered Post with Acknowledgement Due (RPAD) to ensure valid proof of service.