Cheque bounce: the timeline that decides the case

The Negotiable Instruments Act sets out a sequence that is unforgiving. Missing a step usually cannot be corrected later.

Day 0 — the bank memo

The cheque is returned unpaid and the bank issues a return memo stating the reason. Keep the memo; it is the starting point of every subsequent period. The cheque must have been presented within its validity, which is three months.

Within 30 days — the demand notice

A written notice demanding payment must be sent to the drawer within thirty days of receiving the bank memo. The notice must demand the cheque amount specifically. Send it by a mode that produces proof of dispatch and delivery.

15 days — the payment window

The drawer has fifteen days from receipt of the notice to pay. If payment is made within this period, no offence is made out.

The next 30 days — the complaint

If payment is not made, the complaint must be filed within thirty days of the expiry of the fifteen-day window. This is a narrow window and it is the most common point of failure.

After filing

The court takes cognisance, issues process, and the matter proceeds to trial as a summary case. An application for interim compensation of up to twenty per cent of the cheque amount may be made under Section 143A.

Also consider a civil suit

A complaint under Section 138 results in punishment and possibly compensation; a summary suit under Order XXXVII of the Code of Civil Procedure results in a decree that can be executed. Where recovery is the objective, running both is usually the better course.