Cheque Bounce Notice Received: What Should the Drawer Do?

The short answer

If you are the drawer and you have received a cheque bounce notice, treat it as a legal act under Section 138 of the Negotiable Instruments Act, 1881, not as a rude letter.

From the date you receive the notice, the Act gives 15 days to pay the cheque amount. If that window is ignored, a criminal complaint may follow. The first work is to read, in this order:

1. the cheque;
2. the bank return memo;
3. the notice (amount, address, date);
4. the underlying transaction.

This is general information for drawers in Hyderabad and Telangana. It is not a prediction of acquittal or conviction.

The statutory sequence (why the dates matter)

A Section 138 complaint is complete only if each condition is met:

1. A cheque was drawn for a legally enforceable debt or liability.
2. It was presented within its period of validity.
3. It was returned unpaid for a reason the section contemplates (including insufficient funds).
4. The payee sent a written demand notice within 30 days of receiving the bank’s return memo.
5. You did not pay the cheque amount within 15 days of receiving that notice.
6. The complaint is then filed within the one-month period the Act allows (with a limited power to condone delay).

Skip a step, and the offence may be incomplete. That is a defence to be examined. It is not a reason to throw the envelope away.

What to check on the paper today

• Is the amount demanded the cheque amount, or a larger “outstanding” with interest and costs mixed in?
• Is the address yours, and can service be proved (post, courier, tracking, electronic service if relied upon)?
• Was the notice sent within 30 days of the return memo?
• Was there a legally enforceable debt — loan, goods, services — or only a blank instrument described as “security”?
• Are you the drawer, a signatory, or a person merely named for pressure?

Section 139 raises a presumption that the cheque was issued for a legally enforceable debt or liability. In Rangappa v. Sri Mohan (2010) 11 SCC 441 the Supreme Court held that this includes a presumption of such a debt, which the accused may rebut on a preponderance of probabilities. It is not a direction to convict.

What you can do in the 15 days

• Pay the cheque amount if that is the right commercial and legal decision;
• seek a documented arrangement (a voice note is not a compounding);
• take advice on a reply that does not admit a debt you will later need to deny.

Section 147 makes the offence compoundable. Compounding is a later possibility on terms the court will look at. It is not a substitute for reading the notice today.

After 2015, jurisdiction for the complaint is generally where the cheque is delivered for collection through the payee’s account (Section 142 as amended), not automatically the drawer’s home branch. Dashrath Rupsingh Rathod v. State of Maharashtra (2014) 9 SCC 129 had said otherwise; Parliament changed that. Do not assume the case will be in your district.

What not to do

Do not send an angry voice note. Do not assume that because the cheque was blank you will be discharged at the first listing. Do not ignore summons if a complaint is already filed.

Where the criminal ingredients are missing, the honest path may be a civil recovery, not a Section 138 prosecution — that is the payee’s question. Your question, as drawer, is the notice in your hand.

Related: cheque bounce practice and how to reply to a legal notice. Use the contact form.

Nothing in this article is legal advice or a warranty of any result in a Section 138 complaint.