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Fifty-four questions, answered

The fifty-four questions that most often recur in matters concerning the dishonour of cheques under Section 138 of the Negotiable Instruments Act, 1881 — the proceedings commonly called cheque bounce cases. Each answer states the position under the statute and the decisions that govern it, as it stands today. This is general information about the law and is not legal advice on any particular set of facts. Questions about the chambers themselves are answered on the About page.

54 questions

Time limits

The demand notice must be given within 30 days of receipt of the bank’s information that the cheque has been returned unpaid. The period runs from the date the return memo is received — not from the date written on the cheque, and not from the date the bank processed the return.

The requirement is in proviso (b) to Section 138. Because the period is reckoned from receipt of the information, the date on the return memo and the date it reached the payee are both material, and both are ordinarily proved from the memo itself and the covering communication from the collecting bank.

Where 30 days pass without a notice, the cheque does not become worthless. While it remains valid it may be presented again, and a further dishonour followed by a notice within time can give rise to a fresh cause of action — MSR Leathers v. S. Palaniappan, (2013) 1 SCC 177.

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No complaint can be founded on that particular dishonour, because a notice within time is one of the ingredients of the offence. The cheque itself is not spent: while it remains valid it may be presented again, and a further dishonour with a notice in time can found a complaint.

That position was settled by a three-Judge Bench in MSR Leathers v. S. Palaniappan, (2013) 1 SCC 177, which held that a payee who does not act on a first cause of action is not barred from presenting the cheque again within its validity and proceeding on the fresh cause of action that arises.

A cheque is ordinarily valid for three months from the date it bears, so the opportunity to present again is finite. The debt underlying the cheque remains recoverable by civil suit, which is governed by its own period of limitation.

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Fifteen days from receipt of the notice. The offence under Section 138 is complete only if the drawer fails to make payment of the amount of the cheque within 15 days of receiving the demand; payment within that period means no offence is committed at all.

The requirement is in proviso (c) to Section 138. What must be paid is the amount of the cheque; a part payment does not answer the demand, though it bears on what remains due.

In computing the period, the day on which the notice is received is excluded — Econ Antri Ltd v. Rom Industries Ltd, (2014) 11 SCC 769, which applied Section 9 of the General Clauses Act, 1897 to the periods under Sections 138 and 142.

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Within one month of the date on which the cause of action arises under proviso (c) — that is, from the expiry of the 15 days allowed by the notice. The requirement is in Section 142(1)(b).

The cause of action arises on the sixteenth day after receipt of the notice, and the month is counted from that day. A complaint presented before the 15 days have run is premature and cannot be validated by keeping it pending until the period expires — Yogendra Pratap Singh v. Savitri Pandey, (2014) 10 SCC 713.

A complaint filed after the month may still be entertained, but only if the court is satisfied that there was sufficient cause for not filing within it.

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Yes. The proviso to Section 142(1)(b) permits a court to take cognizance of a complaint filed after the prescribed month if the complainant satisfies it that there was sufficient cause for not filing within that period.

An application setting out the reasons, supported by material, is ordinarily filed along with the complaint. The discretion is judicial and is exercised before cognizance is taken; it is not a formality, and the sufficiency of the cause is decided on the material placed, not on assertion.

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Each dishonour carries its own 30-day period. A cheque may be presented again within its period of validity, and if it is returned unpaid again, the 30 days for the demand notice run afresh from receipt of the information about that later return.

In MSR Leathers v. S. Palaniappan, (2013) 1 SCC 177, a three-Judge Bench held that nothing in Section 138 or Section 142 prevents a payee who has not complained on an earlier cause of action from presenting the cheque again and founding a complaint on the fresh cause of action that then arises. The earlier view, that the first dishonour exhausted the right, was overruled.

What the decision does not permit is more than one prosecution on the same cause of action. Once a notice has been issued, the 15 days have expired and a complaint has been filed on that dishonour, a later presentation of the same cheque does not create a second offence on the same footing.

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Section 143(3) requires that the trial be concluded, as far as practicable, within six months of the filing of the complaint. Actual duration varies widely with the pendency of the particular court; cheque dishonour matters form a very large part of the criminal docket in metropolitan courts.

In Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158 (25 September 2025), the Supreme Court recorded the scale of the pendency and issued directions aimed at it — service of summons dasti and by electronic means in addition to the ordinary modes, a standardised synopsis with every complaint, facilities for payment by digital means, pendency dashboards for the District Judges at Delhi, Mumbai and Calcutta, and a greater use of Section 143A. The directions were to be implemented from 1 November 2025.

Earlier directions on the conduct of these trials were issued by a Constitution Bench in In re Expeditious Trial of Cases Under Section 138 of the NI Act, 1881, (2021) 16 SCC 116.

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Punishment and consequences

On conviction, Section 138 provides for imprisonment which may extend to two years, or a fine which may extend to twice the amount of the cheque, or both. The court may also direct that compensation be paid to the complainant out of the fine.

Separately, and during the trial rather than at its end, a court may direct interim compensation of up to 20 per cent of the cheque amount under Section 143A.

Because the object of the provision is the restoration of the amount rather than punishment for its own sake, courts frequently deal with these matters by a fine measured against the cheque amount, and the offence is compoundable at any stage under Section 147. In Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158, the Supreme Court held that the benefit of the Probation of Offenders Act, 1958 is available to a person convicted under Section 138.

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No. Dishonour of a cheque is not an offence on which the police register a case and arrest. A court takes cognizance only on a written complaint by the payee or the holder in due course, made after the notice and after the 15 days have expired, and the proceeding ordinarily opens with a summons.

Section 142(1)(a) requires a complaint in writing by the payee or the holder in due course. The trial is conducted as a summary trial under Section 143. Coercive process arises later — if the summons is not answered, a bailable warrant and thereafter a non-bailable warrant may follow.

A separate offence, if one is independently made out on the facts, is governed by its own provisions and is not part of the Section 138 proceeding.

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In the ordinary course an unanswered summons is followed by a bailable warrant, and thereafter by a non-bailable warrant. Appearance, whether in person or through an advocate as the court permits, is what keeps the matter at the stage of process rather than of execution.

In Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158, the Supreme Court directed that summonses in these matters be served by the complainant personally (dasti) and by electronic means — including email and messaging applications — in addition to the ordinary modes, with the complainant furnishing verified contact particulars of the accused. Non-receipt is accordingly harder to assert than it once was.

The defences open to a person served are those recognised by the Act, and each is raised at the stage the procedure allows.

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A court trying a Section 138 complaint may direct the drawer to pay the complainant interim compensation of up to 20 per cent of the cheque amount before the trial concludes. The power is discretionary; it is not an order that follows as a matter of course.

In Rakesh Ranjan Shrivastava v. State of Jharkhand, 2024 INSC 205, the Supreme Court held that “may” in Section 143A cannot be read as “shall”, that reasons must be recorded, and that the tests applicable to Section 148 have no application to Section 143A. In a summary or summons trial the power arises after the plea of the accused is recorded.

The amount is payable within 60 days, extendable by a further 30 for sufficient cause, and is recoverable as if it were a fine. If the drawer is acquitted, Section 143A(4) requires the complainant to repay it with interest.

Section 143A was inserted with effect from 1 September 2018 and operates prospectively — G. J. Raja v. Tejraj Surana, (2019) 19 SCC 469.

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Payment of the amount of the cheque within the 15 days of the notice prevents the offence from being completed at all. After that stage the offence remains compoundable under Section 147, and the Supreme Court has laid down a graded scale of costs depending on when the amount is paid.

In Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158, the earlier grid in Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663 was revised downwards: no costs where the cheque amount is paid before defence evidence is recorded; 5 per cent thereafter but before judgment; 7.5 per cent before the Sessions Court or the High Court; and 10 per cent before the Supreme Court, payable to the Legal Services Authority or such authority as the court directs.

Compounding is with the consent of the complainant and the leave of the court. The Court indicated that where the complainant insists on dues beyond the cheque amount, the Magistrate may consider the powers under Section 255(2) or 255(3) of the Code of Criminal Procedure, 1973 — Section 278 of the Bharatiya Nagarik Suraksha Sanhita, 2023 — or the benefit of the Probation of Offenders Act, 1958.

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A dishonour is recorded in the banking system and is visible to the drawer’s bank. Banks levy return charges, and their policies permit withdrawal of cheque facilities in respect of an account on which cheques are repeatedly returned. The filing of a complaint is not itself a credit-bureau entry.

Where the dishonour relates to a loan or a credit facility, the default in payment — rather than the dishonour as such — is what is reported by the lender to the credit information companies.

A conviction under the section is a conviction for an offence, and whether it must be disclosed depends on what the particular form or authority requires. The charges levied by a bank for a returned cheque are a banking charge and are separate from anything the court may order.

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The demand notice

In writing, addressed to the drawer at the correct address, and within 30 days of receipt of the return memo. Registered post with acknowledgement due is the mode that most readily proves both despatch and service; electronic transmission is ordinarily used in addition to it and not in place of it.

The section prescribes a notice in writing but does not prescribe a mode, so what matters in practice is what can be proved later — the copy of the notice, the postal receipt bearing the date, the tracking record, and the acknowledgement or the returned envelope.

The address used is significant: a notice sent to an address that is not the drawer’s last known address invites a dispute about service that the record may not be able to answer.

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It must demand payment of the amount of the cheque. Particulars that identify the transaction are ordinarily set out with it — the cheque number, date and amount, the drawee bank, the date and stated reason of return, and the debt or liability the cheque answered.

A demand which also claims other sums does not for that reason fail, provided the amount of the cheque is separately and clearly demanded — Suman Sethi v. Ajay K. Churiwal, (2000) 2 SCC 380. A notice that omits the demand for the cheque amount, or is so worded that the demand cannot be identified, does not answer proviso (b).

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Where a notice is correctly addressed and duly despatched, service may in appropriate cases be presumed even though the envelope comes back unclaimed. Whether the presumption applies is a question for the court on the facts of the particular case.

The position was considered in C. C. Alavi Haji v. Palapetty Muhammed, (2007) 6 SCC 555, read with Section 27 of the General Clauses Act, 1897 and Section 114 of the Indian Evidence Act, 1872 (now Section 119 of the Bharatiya Sakshya Adhiniyam, 2023). A drawer who says he did not receive the notice remains free to establish it; the presumption is rebuttable.

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There is no statutory obligation to reply, but silence carries consequences in evidence. Courts have drawn an adverse inference where a drawer who said nothing at the time of the demand set up a detailed defence for the first time at trial.

That was reiterated in Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158, where the failure to reply to the statutory notice was among the circumstances weighed against the accused.

A reply also fixes the position taken at the earliest point, which cuts both ways: a reply that is inconsistent with the defence later advanced is as useful to the other side as silence.

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Filing and procedure

Before the Magistrate having jurisdiction under Section 142(2) — determined, in the ordinary case, by the location of the branch of the bank where the payee maintains the account into which the cheque was delivered for collection.

That rule was introduced by the Negotiable Instruments (Amendment) Act, 2015, which displaced the position taken in Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129. Where the cheque is presented otherwise than through an account, jurisdiction lies where the branch of the drawee bank is situated.

In Mumbai such complaints are conducted before the Metropolitan Magistrate Courts, including those at Borivali, Andheri, Bandra and Mazgaon. An appeal from a judgment ordinarily lies to the Court of Session, and the Bombay High Court exercises appellate and revisional jurisdiction thereafter.

Section 142(2), what follows from it where the parties are in different States, and the provisions bearing on the attendance of a person accused who resides beyond the area, are set out at Where a complaint is filed.

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Ordinarily the original cheque, the bank’s return memo, a copy of the demand notice with the postal receipt and the acknowledgement or returned envelope, and material evidencing the debt or liability the cheque answered.

The complainant’s evidence at the first stage is given on affidavit under Section 145. Where the complainant is a company, a firm or a society, the resolution or authority under which the person filing acts is part of the record.

In Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158, the Supreme Court directed that every complaint be accompanied by a synopsis in a standard form setting out the particulars of the cheque, the notice and the cause of action, so that the court can verify at a glance that the ingredients are made out.

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Not in cheque dishonour complaints. In Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158, the Supreme Court held that there is no requirement to issue a pre-cognizance summons under the first proviso to Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023 in complaints under Section 138.

The question arose because the first proviso to Section 223(1), in force from 1 July 2024, requires that an accused be given an opportunity of being heard before a Magistrate takes cognizance on a complaint — a safeguard that had no counterpart in Section 200 of the Code of Criminal Procedure, 1973. Applied to Section 138, it would have added a stage to every complaint.

The High Courts divided on it. The Karnataka High Court in Ashok v. Fayaz Aahmad (2025) held the proviso inapplicable, the Negotiable Instruments Act being a special law within the meaning of Section 5 of the BNSS with its own self-contained procedure, and distinguished a coordinate view taken in a matter under the general law. The Supreme Court agreed with that reasoning.

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Complaint with the supporting affidavit; cognizance and issue of process; appearance of the accused and the recording of the plea; the complainant’s evidence and cross-examination; the examination of the accused; defence evidence, if any; arguments; judgment.

Section 143 requires these complaints to be tried summarily so far as practicable, applying the summary-trial provisions, and Section 145 permits the complainant’s evidence to be given on affidavit. The examination of the accused is under Section 313 of the Code of Criminal Procedure, 1973, now Section 351 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

Settlement is possible at any of these stages, and the cost of compounding under the current guidelines depends on which stage has been reached.

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Section 138 creates a criminal offence, tried by a Magistrate on a complaint. A civil suit to recover the amount is a separate and independent remedy with its own procedure and its own period of limitation.

The Supreme Court has repeatedly described the offence as regulatory in character, the gravamen being compensatory rather than punitive — Kaushalya Devi Massand v. Roopkishore Khore, (2011) 4 SCC 593 — which is why the offence is compoundable and why the outcome is so often a payment rather than a sentence.

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Yes, provided the person is duly authorised and has knowledge of the transaction. The complaint itself must be in the name of the payee or the holder in due course; the attorney or authorised person files, verifies and deposes on his behalf.

The position was settled by a three-Judge Bench in A. C. Narayanan v. State of Maharashtra, (2014) 11 SCC 790: a power of attorney holder may file the complaint and depose, but the complaint or the affidavit should make it explicit that he has personal knowledge of the transaction, and the authority should be on record.

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Parties in different States

Yes. Section 142(2) fixes the court by reference to the branch of the bank at which the payee or holder in due course maintains the account into which the cheque was delivered for collection. Where the parties bank in different States, the complaint lies where the payee’s collecting branch is situated, and the residence of the drawer is not the test.

The consequence runs both ways. A person who drew a cheque in one State may be answerable to a Magistrate in another, because that is where the cheque was deposited; and a payee may find that his own complaint lies where his bank branch is rather than where he lives or where the debt arose. Nothing in the Act requires either party to reside within the local limits of the court trying the complaint.

The rule was introduced by the Negotiable Instruments (Amendment) Act, 2015 and displaced the position stated in Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129, under which jurisdiction had turned on the situation of the drawee bank. Where a cheque is presented otherwise than through an account, jurisdiction still lies where the branch of the drawee bank is situated.

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Not necessarily. Under Section 228 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (Section 205 of the Code of Criminal Procedure, 1973) a Magistrate issuing a summons may, if he sees reason to do so, dispense with the personal attendance of the person accused and permit him to appear by his advocate. The power is discretionary and is exercised on an application.

In Bhaskar Industries Ltd. v. Bhiwani Denim & Apparels Ltd., (2001) 7 SCC 401, the Supreme Court held that where a court is satisfied that the interest of justice does not require the personal attendance of an accused, it has the power to dispense with it, and that in an appropriate case even the first appearance may be made through counsel, the Magistrate recording the plea taken by counsel on the accused’s behalf. What the Magistrate weighs on such an application — whether any useful purpose is served by personal attendance, and whether the progress of the trial would be hampered without it — was stated in S. V. Muzumdar v. Gujarat State Fertilizer Co. Ltd., (2005) 4 SCC 173.

An exemption is not a right. It is commonly granted on conditions — that identity will not be disputed, that counsel will remain present, that adjournments will not be sought on the ground of absence — and under Section 228(2) of the Sanhita, and Section 355 (Section 317 of the Code), the court may direct personal attendance at any later stage notwithstanding an earlier order. Attendance is ordinarily required in person where the plea is recorded, where the statement of the accused is taken, and on such other occasions as the court directs.

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Yes. Section 30 of the Advocates Act, 1961 entitles an advocate whose name is on the roll of any State Bar Council to practise before any court in India, including the Supreme Court, and before every tribunal or person legally authorised to take evidence. The provision was brought into force on 15 June 2011.

The entitlement is to practise. It does not displace the rules of a particular court as to who may present a filing before it, and several High Courts require an advocate who is not on their own roll to comply with local requirements as to registration or an address for service within the jurisdiction. Rules of that character were upheld in Jamshed Ansari v. High Court of Judicature at Allahabad, (2016) 10 SCC 554, where it was held that the right to practise is subject to the rules a court may frame regulating its own procedure. Which requirements apply is in every case a matter for the court in question.

This answers a question about the law and not about any advocate in particular. A person choosing whom to engage should satisfy himself as to enrolment, and the roll of every State Bar Council is a public record.

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It depends on the court. Following the Model Rules for Video Conferencing for Courts settled by the e-Committee of the Supreme Court of India in 2020, the High Courts have framed rules providing for proceedings to be conducted by video conferencing and have extended them to the district judiciary within their jurisdictions. Whether participation in that mode is permitted in a particular hearing is a matter for the court concerned.

Those rules ordinarily require a request to be made in advance, treat the proceeding as a judicial proceeding for all purposes, and apply to it the same decorum, dress and conduct as apply in the courtroom. They also regulate the remote point from which a participant joins. Practice is not uniform: facilities and the disposition to permit remote participation vary between High Courts and between district establishments, so no expectation can be stated in advance of the court’s own order.

Attendance by video conferencing and exemption from personal attendance are distinct questions and are separately regulated. Nothing in the rules obliges an advocate or a party to appear only in that mode.

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Defences

The recognised lines are that no legally enforceable debt or liability subsisted when the cheque was drawn; that the notice does not answer proviso (b) or was not made within time; that the complaint is premature or out of time; that payment was made within the 15 days; and that the cheque was not drawn by the accused or was materially altered.

None of these operates on assertion. Once the drawing of the cheque is admitted or proved, Section 139 raises a presumption in the complainant’s favour, and it is for the accused to displace it by raising a probable defence on the standard of preponderance of probabilities — Basalingappa v. Mudibasappa, (2019) 5 SCC 418.

Which of these lines is open depends entirely on the documents, the correspondence and the conduct of the parties at the time, and on what was said in answer to the notice.

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A cheque returned because the drawer instructed the bank to stop payment can attract Section 138. The section is not confined to insufficiency of funds. The drawer remains able to show that no enforceable liability existed, or that the instruction was given for a reason the law recognises.

In Modi Cements Ltd v. Kuchil Kumar Nandi, (1998) 3 SCC 249, the Supreme Court held that a stop-payment instruction does not take the case outside Section 138, and in Goa Plast (P) Ltd v. Chico Ursula D’Souza, (2004) 2 SCC 235 it applied that reasoning where the instruction followed a dispute between the parties.

The practical effect is that the instruction shifts the argument from the reason for the return to the existence of the debt.

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Yes. A return because the account has been closed is treated as falling within Section 138, closure being regarded as the extreme form of insufficiency of funds rather than something outside the section.

The position was taken in NEPC Micon Ltd v. Magma Leasing Ltd, (1999) 4 SCC 253, and the broader principle — that the words of the section are not to be read so narrowly as to let the reason stated on the memo defeat it — was affirmed in Laxmi Dyechem v. State of Gujarat, (2012) 13 SCC 375.

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It can. In Laxmi Dyechem v. State of Gujarat, (2012) 13 SCC 375, the Supreme Court held that a return on the ground that the signature does not match, or that the image is not clear, is within the section where the return is attributable to the drawer’s own act.

The reasoning is that a drawer cannot defeat the provision by the simple expedient of signing differently from the specimen held by the bank. Where, on the other hand, the signature on the instrument is genuinely not that of the account holder, a different question arises altogether — that of whether the cheque was drawn by him at all.

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A High Court may quash under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 — formerly Section 482 of the Code of Criminal Procedure, 1973 — but the jurisdiction is narrow. It is exercised where the complaint on its face discloses no offence, not to weigh a defence that belongs to the trial.

Grounds that have succeeded at that stage are of a kind that appear from the record itself: a notice outside the period, a complaint filed before the cause of action arose, or the absence of the averments Section 141 requires against an officer of a company.

In Rathish Babu Unnikrishnan v. State (NCT of Delhi), 2022 SCC OnLine SC 513, the Court held that where the facts are disputed and the defence requires evidence, quashing is not the appropriate course — the matter must go to trial.

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A debt that has ceased to be recoverable by limitation is ordinarily not a “legally enforceable debt”, and a cheque issued towards it may fall outside Section 138. The position changes where there is a fresh promise in writing signed by the drawer, which Section 25(3) of the Indian Contract Act, 1872 recognises as binding.

The question is rarely capable of being decided at the threshold. In A. V. Murthy v. B. S. Nagabasavanna, (2002) 2 SCC 642, the Supreme Court declined to assume at the stage of process that the debt was time-barred, observing that the issue required evidence and that the cheque itself, along with the surrounding documents, may bear on whether liability was acknowledged.

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Evidence and presumptions

Once the drawing of the cheque is admitted or proved, the law presumes that it was issued in discharge of a debt or other liability. The presumption is rebuttable, but until it is displaced the complainant is not required to prove the debt independently.

A three-Judge Bench in Rangappa v. Sri Mohan, (2010) 11 SCC 441, held that the presumption is not confined to consideration but extends to the existence of a legally enforceable debt or liability, and that the accused may rebut it on the standard of preponderance of probabilities.

Section 118(a) works alongside it, presuming that every negotiable instrument was made or drawn for consideration.

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By placing material from which a probable defence emerges, judged on the preponderance of probabilities. The accused need not enter the witness box; he may rely on the complainant’s own case and on what emerges in cross-examination. A bare denial does not suffice.

The authorities were collected in Basalingappa v. Mudibasappa, (2019) 5 SCC 418. A line of argument frequently attempted — that the complainant lacked the means to advance the sum claimed — was addressed in Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158, where the Court held that financial incapacity is not to be presumed and must be established on evidence before it can displace the statutory presumption.

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By virtue of the presumption, the cheque itself is treated as evidence of a debt or liability. How much further proof is required depends on the facts and on the manner in which the defence is raised.

Where the defence puts the very existence of the transaction in issue and supports that with material, the complainant’s own records — accounts, correspondence, ledgers, bank statements — become material to whether the presumption survives.

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Yes. Section 145 permits the complainant’s evidence to be given on affidavit and read in evidence, subject to the right of the accused to apply to the court for the person giving it to be summoned and cross-examined.

The provision is one of the mechanisms by which these complaints are kept within the summary procedure that Section 143 contemplates. An application to cross-examine is not granted mechanically; the court considers what is sought to be put.

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Yes. In Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158, the Supreme Court held that a cash loan does not cease to be a legally enforceable debt for the purposes of Section 138 merely because the mode of the transaction contravened Section 269SS of the Income-tax Act, 1961.

The consequences of that contravention are fiscal and are visited by the Income-tax Act itself; they do not extinguish the liability or bar the prosecution. The decision set aside a contrary view that had been taken by the Kerala High Court.

The absence of a receipt or a written agreement remains a matter of evidence going to the probability of the transaction, but it is not a legal bar.

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Particular kinds of cheque

A cheque described as “security” is not, for that reason alone, outside Section 138. Where the underlying debt or liability has become due and payable and the cheque is then dishonoured, the section may be attracted.

That was held in Sripati Singh v. State of Jharkhand, 2021 SCC OnLine SC 1002. The same distinction had been drawn in Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd, (2016) 10 SCC 458, where post-dated cheques given under a loan agreement and described in it as security were held to be covered, because the instalments they answered had fallen due.

The question in every case is not the label attached to the instrument but whether an enforceable liability subsisted when the cheque was presented.

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A signed but otherwise blank cheque, voluntarily delivered towards a payment, does not fall outside Section 138 for that reason. The holder is entitled to the presumption under Section 139 unless there is evidence that the instrument was lost or obtained by coercion.

In Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, the Supreme Court held that filling in the particulars of a cheque handed over signed does not invalidate it, Section 20 permitting the holder of an inchoate instrument delivered to him to complete it.

A drawer who says the cheque was filled in for an amount never owed is not without an answer, but it is an answer that has to be made out on evidence.

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A post-dated cheque becomes payable on the date it bears, and the periods under Section 138 run from a dishonour on or after that date. Whether the section applies turns on whether a debt or liability subsisted when the cheque was drawn.

In Indus Airways Pvt. Ltd. v. Magnum Aviation Pvt. Ltd., (2014) 12 SCC 539, cheques issued purely as advance payment against purchase orders that were afterwards cancelled, no goods having been supplied, were held not to have been drawn for an existing debt, and Section 138 was not attracted.

Sampelly Satyanarayana Rao, (2016) 10 SCC 458, distinguished that situation from post-dated cheques given towards instalments under a subsisting loan, which were held to be covered.

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For a firm, Section 141 extends liability to those partners who were in charge of and responsible for the conduct of its business, the firm itself being arraigned. For a joint account, liability attaches to the person who drew the cheque; a joint holder who did not sign is not liable merely as an account holder.

The position on joint accounts was settled in Aparna A. Shah v. Sheth Developers (P) Ltd, (2013) 8 SCC 71: the offence is committed by the drawer, and a co-account holder who has not signed the cheque cannot be prosecuted under Section 138 on that footing.

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Criminal liability is personal, and a prosecution against a deceased accused abates; it does not descend to the legal heirs, though the debt itself may be pursued against the estate in a civil suit. Where the complainant dies, the complaint does not abate and the legal representative may be permitted to continue it.

The two situations are treated differently precisely because the offence attaches to the person who drew the cheque, whereas the right the complaint vindicates is in substance a claim to money.

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Companies and firms

Along with the company, a person who was at the relevant time in charge of and responsible to it for the conduct of its business may be liable under Section 141 — provided the complaint contains the specific averment that the section requires.

In Siby Thomas v. Somany Ceramics Ltd., (2024) 1 SCC 348, the Supreme Court held that a general or formulaic recital does not meet Section 141: the complaint must aver that the person accused was, at the relevant time, in charge of and responsible to the company for the conduct of its business.

Where the averment is made, the burden of showing that he was not so in charge lies on the person accused and is ordinarily a matter for trial — S. P. Mani & Mohan Dairy v. Snehalatha Elangovan, (2022) 10 SCC 148.

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Liability turns on whether the person was in charge of and responsible for the conduct of the business at the time the offence was committed, not on the office held at some other time. The records evidencing the role and the date of departure are therefore central.

Where the departure is established by unimpeachable material on the record — the filings made with the Registrar of Companies being the usual instance — the point has been entertained at the stage of quashing. Where it depends on disputed facts, it is left to the trial.

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Yes. For a prosecution under Section 141, arraigning the company as an accused is imperative; a director or other officer cannot ordinarily be proceeded against alone where the cheque was drawn on the company’s account.

That was held in Aneeta Hada v. Godfather Travels & Tours (P) Ltd, (2012) 5 SCC 661. The vicarious liability that Section 141 creates presupposes the liability of the company; if the company is not before the court, the foundation for the officer’s liability is absent.

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Money, settlement and appeal

The court may impose a fine of up to twice the cheque amount and direct that compensation be paid to the complainant out of it, and may award compensation under the general power now in Section 395 of the Bharatiya Nagarik Suraksha Sanhita, 2023. Interest is not a separate head under Section 138, but is reflected in what is awarded.

In R. Vijayan v. Baby, (2012) 1 SCC 260, the Supreme Court observed that courts should ordinarily direct payment of compensation approximating the cheque amount together with interest, so that the complainant is not driven to a separate suit for what the complaint was in substance about.

An unpaid fine or compensation is recoverable by the modes the criminal procedure provides for the recovery of a fine.

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Yes — Section 147 makes every offence under the Act compoundable. In Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158, the Supreme Court revised the graded costs: none where the cheque amount is paid before defence evidence is recorded, 5 per cent thereafter but before judgment, 7.5 per cent before the Sessions Court or High Court, and 10 per cent before the Supreme Court.

The cost is payable to the Legal Services Authority or such other authority as the court directs. The revision replaced the higher grid laid down fifteen years earlier in Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663, the Court noting the level of pendency and the fall in interest rates, and directed implementation from 1 November 2025.

The scale is guidance rather than an inflexible rule. In a later matter the Supreme Court set aside a cost imposed by a High Court where the complainant had no objection to the settlement and the convicted person was unable to pay.

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A convicted person may ordinarily appeal to the Court of Session. Under Section 148, the appellate court may direct the appellant to deposit a minimum of 20 per cent of the fine or compensation awarded, and that deposit is in addition to any interim compensation already paid under Section 143A.

In Surinder Singh Deswal v. Virender Gandhi, (2019) 11 SCC 341, the Supreme Court held that although Section 148 uses “may”, the deposit is ordinarily to be directed, and reasons are to be recorded where it is not. The provision was held to apply to appeals arising from complaints filed before its introduction.

The deposit is payable within 60 days, extendable by a further 30 for sufficient cause, and the appellate court may direct that it be released to the complainant during the pendency of the appeal.

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Both may be pursued. The complaint under Section 138 is a criminal proceeding on a complaint; a suit for recovery is a civil remedy governed by its own procedure and limitation. Neither bars the other, though what has already been recovered is accounted for.

The reason the two coexist is that they answer different things: the complaint vindicates the credibility of the instrument, the suit the debt. In Sangeetaben Mahendrabhai Patel v. State of Gujarat, (2012) 7 SCC 621, the Supreme Court held that a prosecution under Section 138 and one for cheating on the same transaction are not barred as double jeopardy, the ingredients being distinct.

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Yes. In Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158, the Supreme Court held that a person convicted under Section 138 may be given the benefit of the Probation of Offenders Act, 1958, the object of the provision being repayment and the credibility of the cheque rather than retribution.

The Court indicated that where a complainant declines to compound because it seeks dues beyond the cheque amount, the Magistrate may suggest that the accused plead guilty and may then exercise the power under Section 255(2) or 255(3) of the Code of Criminal Procedure, 1973 — Section 278 of the Bharatiya Nagarik Suraksha Sanhita, 2023 — or extend the benefit of the 1958 Act.

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Banking practice

The Reserve Bank of India moved the Cheque Truncation System from batch processing to continuous clearing with settlement on realisation — Phase 1 from 4 October 2025 and Phase 2 from 3 January 2026. Under Phase 2 the drawee bank must confirm or reject the cheque within three clear hours of presentation. Section 138 itself is unchanged.

Under the framework there is a single presentation session, images are released to drawee banks on a rolling basis, and a cheque not confirmed within the prescribed time is deemed approved and included in settlement. The practical consequence is that the interval between presentation and the return memo has narrowed considerably.

That matters to the statutory scheme only in this sense: the 30 days for the demand notice run from receipt of the bank’s information about the return, and that information now ordinarily arrives within hours rather than days. The ingredients of the offence, the periods and the procedure are as they were.

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Positive Pay requires the drawer to confirm the key particulars of a high-value cheque to the bank in advance, so that they can be matched when the cheque is presented. It is mandatory above ₹5 lakh in the current framework and recommended above ₹50,000.

Where confirmation has not been given, the bank may decline or delay the instrument. A return on that ground is a return for want of confirmation and not for insufficiency of funds, and what follows under Section 138 depends on what the return memo actually states.

Cheques validated under Positive Pay fall within the dispute-resolution arrangements the Reserve Bank has prescribed for the system.

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No question matches that wording. The full text of the Act is on the Negotiable Instruments Act page, and the reported decisions are on the Judgments page.

Statutory references are to the Negotiable Instruments Act, 1881 unless otherwise stated. References to the Code of Criminal Procedure, 1973 are given alongside the corresponding provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, which replaced it with effect from 1 July 2024. The law stated is general and may have changed since this page was last revised; nothing here is advice on any particular set of facts, and no answer here takes the place of advice taken on the documents.