Cheque bounce is a criminal offence under Section 138 of the Negotiable Instruments Act, 1881. If someone issues a cheque that gets dishonoured due to insufficient funds, you have the right to take legal action.

When is it a Legal Offence?

• Cheque was issued towards a legal liability.

• Cheque gets dishonoured.

• Payee sends a written demand notice within 30 days.

• Drawer fails to pay within 15 days of receiving notice.

Legal Steps:

1. Send legal notice to drawer.

2. Wait 15 days.

3. If unpaid, file a criminal complaint within one month.

4. Court may summon the accused.

5. Offender can face jail up to 2 years or fine or both.

Defences Available to Accused:

• No legal liability

• Invalid notice

• Time-barred cheque

• Forgery or misuse

The case is bailable, compoundable, and non-cognizable.

Civil Remedies:
A parallel civil suit for recovery of cheque amount can also be filed.

Legally Enforceable Debt

A crucial element in cheque bounce cases is the presence of a legally enforceable debt or liability. This means the cheque must have been issued to discharge an existing debt or obligation that is legally recognized. If the cheque was given as a gift, donation, or for a future loan not yet due, the provisions of Section 138 of the Negotiable Instruments Act may not apply. Courts require clear evidence that the cheque was issued in return for a legitimate financial liability. Understanding this distinction is vital for both complainants and accused to assess the strength of their case.