Got a cheque bounce notice or court summons under Section 138 NI Act? A plain guide for the accused / drawer in India — replying to the demand notice in 15 days, checking the legal conditions, rebutting the presumption (s.139), interim compensation (s.143A), settlement and compounding costs after Sanjabij Tari (2025), appeal and the 20% deposit (s.148) (2026)
Calm, step-by-step map for the person whose cheque was dishonoured — an individual, a proprietor or a company director — from the day a demand notice arrives to trial and appeal: what Section 138 of the Negotiable Instruments Act requires; why replying to the notice matters; the time limits and technical points courts check; what ‘presumption’ means and how an accused can try to rebut it; summons, appearance and bail; interim compensation; the Supreme Court’s 2025 directions on summons and online payment; settlement and compounding at each stage; and what happens after conviction. Educational only — not legal advice; no outcome is predicted. Adhiwakta does not file replies, appear in court or contact the complainant.
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First, where are you in the process?
Cheque bounce cases move in clear stages: (1) the cheque is returned by the bank; (2) the payee sends a written demand notice; (3) you have 15 days from receiving the notice to pay; (4) if you do not pay, the payee may file a criminal complaint before a Magistrate; (5) summons; (6) plea and trial (usually summary); (7) judgment, and then appeal. What you can do — and what it costs to settle — changes at every stage, so note the exact dates of the bank return memo, the notice, its delivery to you and any summons.
What Section 138 actually requires
Section 138 of the Negotiable Instruments Act, 1881 applies when a cheque drawn on your account to pay a legally enforceable debt or other liability is returned unpaid for insufficient funds or for exceeding the arranged amount. Punishment can extend to two years’ imprisonment, or a fine up to twice the cheque amount, or both. It applies only if: (a) the cheque was presented within six months of its date or within its validity, whichever is earlier — under RBI instructions, cheques dated on or after 1 April 2012 are valid for three months; (b) the payee sent a written demand notice within 30 days of learning of the dishonour; and (c) you failed to pay within 15 days of receiving that notice. Courts have also applied the section to cheques returned for reasons such as ‘account closed’ or ‘payment stopped’, depending on the facts.
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Write in Hindi or English · general guidance, not legal advice
Got a demand notice? The 15 days matter most
Paying the cheque amount within 15 days of receiving the notice ends the matter before any offence is complete — keep proof of payment (bank transfer is best) and a written acknowledgement. If you dispute the debt, a clear written reply within the same period is important: the Supreme Court has said an accused should set up the defence (for example, that the debt was already paid, or the complainant lacked the capacity to lend) in the reply to the notice (Tedhi Singh v. Narayan Dass Mahant, 2022), and in Sanjabij Tari v. Kishore S. Borcar (2025) it said that failing to reply leads to an inference in favour of the complainant’s version. Reply with facts and documents; avoid exaggeration you cannot prove.
Technical points courts check
An accused can examine whether: the cheque was presented within its validity; the notice was sent within 30 days of the return memo and properly addressed; the notice demanded the cheque amount (not a vague or inflated total); 15 days had passed after delivery before the complaint was filed; the complaint was filed within one month after those 15 days (Section 142(1)(b)) — though the court can condone delay for sufficient cause; and the court has territorial jurisdiction — under Section 142(2) it is usually the court where the payee’s bank branch (where the cheque was delivered for collection) is situated. Technical defects can matter, but courts look at substance; do not rely on technicalities alone.
The presumption — and how it can be rebutted
Once you admit that the cheque and signature are yours, the court presumes that it was issued for a debt or liability (Sections 118 and 139). The presumption is rebuttable: the accused does not have to prove the defence beyond reasonable doubt but must raise a probable defence on the ‘preponderance of probabilities’ (Rangappa v. Sri Mohan, 2010). This is usually done through documents, the accused’s own evidence, other witnesses, or cross-examination of the complainant. Common defences raised — each depends entirely on proof — include: the loan was already repaid; the cheque was given only as security and no debt was due on the date of presentation; the amount filled in is more than what was due; the cheque was lost, stolen or misused; or the complainant could not have lent the amount. Points to know: a signed blank cheque voluntarily handed over still attracts the presumption even if someone else filled in the details (Bir Singh v. Mukesh Kumar, 2019); a security cheque can attract Section 138 if the debt had become due when it was presented (Sripati Singh v. State of Jharkhand, 2021); and a cash loan above ₹20,000 in breach of the Income-tax Act does not by itself defeat the complaint (Sanjabij Tari, 2025).
Summons, appearance and bail
The offence is punishable with imprisonment up to two years, so it is a bailable offence — on appearing, the accused is usually released on furnishing a bail bond. Do not ignore summons: non-appearance can lead to bailable and then non-bailable warrants. Under the 2025 Sanjabij Tari directions, summons may also be served by the complainant directly (dasti) and electronically (email, mobile or WhatsApp) where rules allow, and the Supreme Court said no pre-cognizance hearing of the accused under Section 223 BNSS is needed in these cases. The Magistrate can exempt personal attendance and allow appearance through an advocate (Section 228 BNSS, old CrPC 205), but the Court said such exemptions should be granted only when the facts warrant it.
The first hearing — questions the court may ask
Cheque cases are usually tried summarily (Section 143). The Supreme Court in 2025 allowed trial courts, at the start, to ask the accused directly: is the account and signature yours; did you issue the cheque to the complainant; did you owe the amount; if not, what is your defence (security cheque, loan repaid, cheque altered or misused, other); and do you wish to compound the case now. The answers are recorded in the order sheet, so think about them carefully beforehand. Complainant evidence is commonly given on affidavit (Section 145), and the accused can seek to cross-examine.
Interim compensation under Section 143A
The trial court may order the accused to pay interim compensation of up to 20% of the cheque amount — in a summary or summons trial after the accused pleads not guilty, or otherwise after charges are framed. It is to be paid within 60 days (extendable by up to 30 days for sufficient cause). The Supreme Court has held this power is discretionary, not automatic: the court must look prima facie at both sides and give reasons (Rakesh Ranjan Shrivastava v. State of Jharkhand, 2024). If the accused is later acquitted, the court must direct the complainant to repay it with interest.
Settling — compounding costs after Sanjabij Tari (2025)
The offence is compoundable (Section 147) and can be settled at any stage. In September 2025 the Supreme Court revised its old Damodar S. Prabhu guidelines on costs: (a) if the accused pays the cheque amount before his defence evidence is recorded, the trial court may allow compounding without any cost; (b) after defence evidence but before judgment, with an additional 5% of the cheque amount; (c) before the Sessions Court or High Court in appeal or revision, 7.5%; and (d) before the Supreme Court, 10%. The Court also directed district courts to set up online payment through QR codes or UPI links, with summons stating that the accused can pay the cheque amount at the start itself. Settlements can also happen through mediation or Lok Adalat. Settle in writing, with the terms recorded before the court.
Company, firm and joint account cheques
If the cheque was issued by a company or firm, Section 141 makes the company liable, and also persons who were in charge of and responsible for the conduct of its business at the time — the complaint must say this about each person. Directors who were not in charge (for example, some independent or non-executive directors) often contest their inclusion, and the outcome depends on the specific averments and facts. Only the person who signed and whose account the cheque is drawn on is ordinarily the drawer.
If convicted — appeal and the 20% deposit
An appeal against conviction by a Magistrate generally lies to the Sessions Court, ordinarily within 30 days of the judgment. Under Section 148 the appellate court may order the appellant to deposit at least 20% of the fine or compensation within 60 days (extendable by up to 30 days); the Supreme Court has said deposit is the normal rule, though an exception can be made with recorded reasons where it would be unjust (Jamboo Bhandari, 2023). Courts may also consider the Probation of Offenders Act, 1958 in suitable cases, and compounding remains possible in appeal with the costs above.
Do’s and don’ts
Do: keep the notice envelope and tracking details; collect bank statements, receipts, ledger entries, messages and any written settlement; attend every date or ensure representation; and consider settlement early when the debt is genuine. Don’t: ignore notices or summons; issue fresh cheques you cannot honour; threaten the complainant; or file false counter-complaints — that can create new trouble. A civil suit by the payee for the same money can run alongside the criminal case; see the cheque bounce vs civil suit guide.
What this guide is not
It does not tell you whether your defence will succeed, how a particular court will decide, or how long the case will take. Local court practice, e-summons rules and online payment facilities differ — check with the court concerned.
How Adhiwakta can help
We do not draft or send replies to notices, appear in court, or contact complainants, banks or courts. Adhiwakta is a facilitation platform, not a law firm. We do not file cases, appear before any authority, or promise any result. Use Ask Adhiwakta to describe your situation for general guidance from an independent advocate, or start with the AI helper to organise your facts and papers. Educational only — not formal legal advice.
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Frequently asked questions
- I received a cheque bounce legal notice — what should I do?
- Note the date you received it. You have 15 days to pay the cheque amount; paying within that time prevents the offence under Section 138 from being complete. If you dispute the debt, send a clear written reply with documents within the same period — courts give weight to the defence raised in the reply.
- Is cheque bounce a bailable offence?
- Yes. Section 138 is punishable with imprisonment up to two years, so it is bailable; on appearing in court, the accused is usually released on a bail bond. Ignoring summons can lead to warrants.
- Can a security cheque or blank signed cheque lead to a case?
- It can. A security cheque can attract Section 138 if the debt was due when it was presented (Sripati Singh, 2021), and a blank signed cheque voluntarily given still attracts the presumption even if someone else filled it (Bir Singh, 2019). Whether a defence succeeds depends on proof.
- How can the accused rebut the presumption under Section 139?
- By raising a probable defence on the preponderance of probabilities — for example through documents showing repayment, cross-examination of the complainant on capacity to lend, or other evidence. Proof beyond reasonable doubt is not required (Rangappa v. Sri Mohan, 2010).
- Is paying 20% interim compensation compulsory?
- No. Under Section 143A the court may order up to 20%, but the Supreme Court held the power is discretionary and must be exercised with reasons (Rakesh Ranjan Shrivastava, 2024). If the accused is acquitted, it must be repaid with interest.
- How much extra do I pay to settle a cheque bounce case?
- Under Sanjabij Tari (2025): no extra cost if the cheque amount is paid before defence evidence; 5% after defence evidence but before judgment; 7.5% in Sessions Court or High Court appeal or revision; and 10% in the Supreme Court.
- Does Adhiwakta defend cheque bounce cases?
- No. Adhiwakta does not draft replies, appear in court or contact anyone. Use Ask Adhiwakta or the AI helper for general educational guidance only.
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