Section 138 Demand Notice: Draft, Service Proofs & Deadlines (Template)

Introduction

A Section 138 demand notice is the written demand you must send after a cheque is returned unpaid. Without a valid notice, served in time and proved properly, a cheque-bounce complaint can fail even if the debt is genuine.

This guide is for payees, drawers, borrowers and business owners in Hyderabad and across Telangana. It explains what the notice must contain, how to serve it, which proofs to keep, the exact deadlines, a usable draft template, and the mistakes that most often sink complaints before the Magistrate.

It is informational only. Facts, addresses and dates decide the case. Get the notice checked before you post it.

What a Section 138 demand notice actually does

Section 138 of the Negotiable Instruments Act, 1881 makes cheque dishonour a criminal offence only if every statutory condition is met. The demand notice is one of those conditions.

The notice does three things:

• Tells the drawer that the cheque was presented and returned unpaid.
• Demands payment of the cheque amount.
• Starts the 15-day window in which the drawer can still pay and avoid prosecution.

Courts treat the notice as a penal precondition. A vague letter, a WhatsApp chat, or a notice that only claims “outstanding dues” is not enough. The Supreme Court has held that the notice must demand the cheque amount itself, not an omnibus lump-sum of other dues.

When the notice applies — and when it does not

The notice route applies when:

• The cheque was drawn on an account maintained by the drawer.
• It was issued towards a legally enforceable debt or liability.
• It was presented within its validity period.
• The bank returned it for insufficiency of funds, “exceeds arrangement”, or a stop-payment that still leaves a live debt.
• You (the payee or holder in due course) received the bank’s return memo.

It does not apply if the cheque was stale when presented. RBI reduced ordinary cheque validity to three months from the date on the cheque (effective 1 April 2012). The statute still speaks of six months or the period of validity, whichever is earlier. In practice, a return marked “stale cheque” or “exceeds validity” does not support a Section 138 case.

Stop-payment is not an automatic defence if the underlying liability is real. Account-closed and “signature differs” cases need fact-specific advice; do not assume they are always outside Section 138.

The three clocks you cannot miss

Clock	What starts it	What you must do	If you miss it
Presentation	Date written on the cheque	Present within 3 months (validity)	No 138 case on that cheque
30-day notice	Date you receive the return memo, not the date printed on the memo	Dispatch a written demand	That presentation’s criminal remedy is lost
15-day payment	Date the drawer receives (or is deemed to receive) the notice	Drawer must pay the cheque amount	Cause of action arises the next day
1-month complaint	Day after the 15-day period ends	File a written complaint before the Magistrate	Delay needs condonation under Section 142; premature filing is fatal

The 30-day clock runs from receipt of information from the bank, not from the date of dishonour printed on the memo. Count from the day the return memo reaches you. Dispatch by Day 20–25 is safer than waiting till Day 30.

The 15-day clock runs from receipt, not from dispatch. Section 138 does not require the notice to “give 15 days”. It requires the drawer to pay within 15 days of receiving the notice. Still, every usable draft should state that payment is demanded within 15 days of receipt.

You cannot file the complaint on Day 14 of the payment window. The Supreme Court in Yogendra Pratap Singh held that a premature complaint is not saved merely because 15 days later expire before cognizance. File on or after the 16th day, and within one month thereafter. Delay can be condoned only if the Magistrate is satisfied there was sufficient cause.

What a valid notice must contain

No statute prescribes a printed form. Courts look at the notice as a whole. As a working checklist, include:

1. Full name and address of the payee / holder, and capacity (self, firm, company, authorised officer).
2. Full name and correct last-known address of the drawer. If the drawer is a company, address the company as drawer and name the signatory / persons in charge under Section 141.
3. Cheque number, date, amount in figures and words, drawee bank and branch.
4. Date of presentation and date of return.
5. Bank’s reason for return (quote the memo; annex a copy).
6. The legally enforceable debt or liability in one short paragraph (loan, invoice, security deposit, part-payment of a contract).
7. A clear demand for the cheque amount. If you also claim notice charges or interest, separate that claim so it cannot swallow the cheque amount.
8. A demand that payment be made within 15 days of receipt.
9. Mode of payment (account details or demand draft in favour of the payee).
10. Warning that default will lead to a complaint under Section 138 (and Section 141 if a company).
11. List of annexures: cheque copy, return memo, invoice / loan proof if you choose to enclose them.
12. Date, place, advocate’s name and enrolment if sent through counsel.

A polite word such as “request” or “advise” can still be a demand if the notice, read as a whole, clearly requires payment of the cheque amount. Do not rely on politeness. Use the word “demand”.

Sample Section 138 demand notice (template)

Use this as a skeleton. Fill every blank. Do not copy-paste without checking names, amounts and addresses.

BY REGISTERED POST AD / SPEED POST

Ref: NI/138/[Year]/[Short File No.]Date: [DD Month YYYY]Place: Hyderabad

To[Full name of drawer]S/o / D/o / W/o [Name][Door no., street, locality, city, PIN][Also: Registered office, if a company]

Subject: Statutory demand notice under Section 138 of the Negotiable Instruments Act, 1881 — Cheque No. [] dated [] for Rs. [______].

Sir / Madam,

1. I / We, [full name of payee], am / are the payee / holder in due course of Cheque No. [] dated [] for Rs. [amount in figures] (Rupees [amount in words] only) drawn by you on [Bank name], [Branch], towards [short description of debt — e.g. balance payable under Invoice No. ___ / repayment of loan of Rs. ___ advanced on ___].
2. The said cheque was presented for collection through my / our account with [Payee’s bank and branch] on [date]. It was returned unpaid on [date] for the reason “[reason on memo]”, as per the bank’s return memo dated [date], a copy of which is enclosed.
3. I / We hereby demand that you pay the cheque amount of Rs. [______] within fifteen days of receipt of this notice, by [NEFT / RTGS to Account No. ______, IFSC ______, in the name of ______ / demand draft payable at Hyderabad].
4. This notice is confined to the cheque amount. Any claim for notice charges of Rs. [______] is separate and does not form part of the statutory demand.
5. If you fail to pay within the said period, I / We shall be constrained to initiate proceedings under Section 138 of the Negotiable Instruments Act, 1881 [and Section 141, if applicable], besides other civil remedies, entirely at your cost and risk.
6. You are also put to notice that any defence you wish to raise, including a challenge to the legally enforceable nature of the debt or to my / our financial capacity, should be stated in writing in reply to this notice.

A copy of the cheque and the return memo are enclosed.

Yours faithfully,[Name of payee / authorised signatory][Designation, if company / firm]Through: [Advocate name, enrollment no., address, phone, email]

Encl.: (i) Copy of cheque (ii) Copy of return memo (iii) [Optional: invoice / ledger extract]

Paragraph 6 is not mandatory by statute. It is practical. In Kuntegowda v. Thurubaiah (2026 INSC 790) the Supreme Court treated a belated plea that the complainant had no financial capacity as weak if it was not raised in the reply to the statutory notice. Drawers who intend to take that defence should put it in writing within the 15-day window.

How to serve the notice — and what “service” means

Section 138 requires the payee to “give” a notice in writing. It does not confine you to one mode. In practice:

Primary mode: Registered Post with Acknowledgement Due (RPAD) and Speed Post to the same address. Keep both receipts.

Useful extras (not a substitute): courier with POD, email to a known address, WhatsApp to a number used in the transaction. Treat these as corroboration only.

Address: Use the address on the cheque leaf, the account-opening address if you have it, the registered office of a company, and any address used in invoices or the loan papers. Wrong address is the single most common reason a complaint collapses at trial.

Company drawers: Send the notice to the company. Section 141 does not require a separate statutory notice to every director. Still, serving the signatory and persons in charge at their office and residence reduces later “no knowledge” arguments.

Deemed service: When notice is sent by registered post to the correct address, Section 27 of the General Clauses Act raises a presumption of service. The Supreme Court in C.C. Alavi Haji v. Palapetty Muhammed (2007) 6 SCC 555 held that dispatch to the correct address by registered post satisfies the “giving of notice”. Endorsements such as “refused”, “not available”, “house locked”, “shop closed” or “addressee not in station” are treated as due service unless the drawer rebuts them.

If the drawer later says he never received the notice, Alavi Haji still gives him a safety valve: he may pay the cheque amount within 15 days of receiving court summons (with a copy of the complaint) and ask that the complaint be rejected. That is not a licence to ignore the notice. It is a limited escape if service is genuinely disputed.

Service on a spouse or relative, without proof that the drawer knew of the notice, is risky. Some High Courts have refused to treat that as service on the drawer.

Service proofs you must keep in one file

Before you file the complaint, your notice file should contain:

• Office copy of the signed notice.
• Postal receipts (RPAD and Speed Post) with date-stamps.
• Tracking printouts from India Post, downloaded and dated.
• AD card if it comes back signed.
• Returned covers with postal endorsements, unopened if returned.
• Courier POD, if used.
• Email / WhatsApp screenshots only as support, with full headers or export.
• Proof of the address used (cheque leaf, GST / MCA master data, invoice, Aadhaar/KYC if lawfully available).
• Diary note of the date the return memo was received by you.
• Calculation sheet: Day 0 (memo received) → Day 30 (last date to dispatch) → deemed/actual receipt → Day 15 → first date to file → last date to file.

Photograph every postal article before you send it. Courts decide service on documents, not on memory.

After the 15 days — where to file in Hyderabad

If the drawer does not pay, the cause of action arises on the day after the 15-day period ends. File a written complaint within one month.

Forum (Section 142(2)): After the 2015 amendment, the complaint is ordinarily filed where the cheque was delivered for collection through an account — that is, the Magistrate having jurisdiction over the payee’s bank branch. If the cheque was presented otherwise than through an account, jurisdiction lies where the drawer’s bank is located.

In Hyderabad / Telangana that typically means:

• Metropolitan Magistrate courts at Nampally for many Hyderabad branches.
• Courts in Cyberabad or Rachakonda if the collecting branch falls in those commissionerate limits.

Confirm the current allocation list before filing. Do not file in multiple courts. The amendment was meant to stop forum-shopping.

What goes with the complaint: cheque (or photocopy as the court requires), return memo, notice, all service proofs, calculation of limitation, and — after Sanjabij Tari v. Kishore S. Borcar (2025 INSC 1158) — a synopsis in the format directed by the Supreme Court, placed immediately after the index. That judgment also expects dasti service of summons and early-payment options through court QR / UPI links. Check the latest practice direction of the Hyderabad courts before you file.

Appeal / quash: Conviction or other final orders go in appeal to the Sessions Court. Quashing or revision before the Telangana High Court under Section 528 BNSS is exceptional. Defective notice and clear want of jurisdiction are the usual quash grounds — not a disputed debt.

If you are the drawer who received the notice

Do not ignore it and do not argue only on the phone.

• Calendar the 15th day from actual receipt.
• If the debt is due and you can pay, pay the cheque amount within 15 days and keep proof. That ends the Section 138 offence for that notice.
• Part-payment does not automatically kill the offence unless the notice itself demanded only the balance.
• If you dispute the debt, send a written reply. Raise every real defence now — no legally enforceable liability, material alteration, cheque given as security and not for discharge, notice sent to the wrong person or wrong address, stale presentation, notice beyond 30 days, demand not of the cheque amount. After Kuntegowda, a capacity challenge raised for the first time at trial is weaker.
• If you truly never received the notice, Alavi Haji still lets you pay within 15 days of summons. Take advice before you rely on that.

Compounding remains possible later under Section 147. Cost guidelines from Damodar S. Prabhu were recast in Sanjabij Tari (0% / 5% / 7.5% / 10% depending on the stage). That is a separate article. Payment at the notice stage is still the cheapest exit.

Re-presentation: a second chance, not an open door

If you missed the 30-day notice window, or you want to try collection again, you may re-present the cheque within its three-month validity. A fresh dishonour can support a fresh notice and a fresh cause of action (MSR Leathers v. S. Palaniappan). Each cycle consumes validity. Do not treat re-presentation as a strategy to delay filing.

Common mistakes that get complaints dismissed

• Dispatching the notice on Day 31 after receiving the memo.
• Demanding “all outstanding dues” without isolating the cheque amount.
• Using an old or incomplete address and then blaming the post office.
• Relying only on WhatsApp or email.
• Filing the complaint before the 15-day period ends.
• Not annexing the returned cover or tracking report.
• Sending notice only to a director and not to the company that issued the cheque.
• Calculating limitation from the date on the memo instead of the date you received it.
• Assuming “payment stopped by drawer” or “account closed” is always outside Section 138 — or always inside it. Facts matter.

Bullet-point checklist

Before you draft

• Cheque copy, return memo, and the date you received the memo.
• Correct legal name and every usable address of the drawer.
• Exact cheque number, date, amount, bank and branch.
• One-line description of the debt.

Before you post

• Demand is for the cheque amount, separately from extras.
• 30-day dispatch window is still open.
• RPAD + Speed Post prepared to the same address.
• Annexures listed and copies kept.

After posting

• Receipts, tracking, AD card or returned cover filed the same day.
• 15-day calendar marked from deemed / actual receipt.
• First and last dates for the complaint calculated.
• No filing before Day 16.

If you are the drawer

• Written reply within 15 days if you dispute liability.
• Full cheque-amount payment if you want the offence to die.
• Preserve the envelope, tracking and any proof of wrong address.

Conclusion

A Section 138 case is won or lost on paper before it reaches evidence. Draft the demand around the cheque amount, send it within 30 days of receiving the return memo, prove dispatch to the correct address, wait out the 15 days, and file in the right Hyderabad court within the next month. If you are the drawer, reply or pay inside those 15 days. Templates help. Dates, addresses and annexures decide the result.

Short disclaimer

This article is for general information. It is not legal advice and does not create an advocate-client relationship. Section 138 timelines and service turn on documents and facts. Law and local practice can change. Have an advocate review your notice, service proofs and limitation calculation before you post or file.

Related reading

• Compounding Cheque Bounce Offences (Section 147 NI Act): Procedure & Case Law
• How to File a Cheque Bounce Complaint in Hyderabad (Section 138 / 142)
• Reply to a Section 138 Legal Notice — Defences That Matter
• Quashing a Cheque Bounce Case in Telangana High Court
• One Time Settlement (OTS) 2026: How to Negotiate with Banks

Received a bounced cheque, or a Section 138 notice, in Hyderabad or Telangana? Send the cheque copy, return memo and draft notice for a limitation and service review before the 30-day or 15-day clock runs out.