How to Recover Money Someone Owes You
Legal options to recover unpaid money in India – legal notice, cheque bounce case, Order 37 summary suit, commercial suit, MSME Facilitation Council, arbitration and insolvency under the IBC.
Read the guide →Cheque Bounce Case: Section 138 NI Act Procedure
A dishonoured cheque given for a debt is a criminal offence — but only if strict time limits are followed. Missing a deadline can defeat the case.
Last reviewed: October 2026 · General information only, not legal advice.
The Timeline at a Glance
| Step | Time limit | Provision |
|---|---|---|
| Present the cheque | Within its validity (3 months from the date on the cheque) | NI Act 138(a) |
| Send demand notice | Within 30 days of receiving the bank's return memo | NI Act 138(b) |
| Drawer's time to pay | 15 days from receipt of notice | NI Act 138(c) |
| File complaint | Within 1 month after the 15 days expire | NI Act 142(1)(b) |
A complaint filed late can be admitted only if the court condones the delay for sufficient cause.
When Is It an Offence?
- The cheque was issued for a legally enforceable debt or liability.
- It was returned unpaid for insufficient funds, "exceeds arrangement", "account closed", "payment stopped" or similar reasons.
- A proper demand notice was sent in time, and payment was not made within 15 days.
Procedure
- Send a legal demand notice by registered post / speed post (and email where possible), keeping proof of dispatch and delivery.
- File the complaint with the original cheque, return memo, copy of notice, postal receipts and an affidavit, in the court where the payee's bank branch is located NI Act 142(2).
- The court issues summons; the case is tried summarily.
- The court can order the accused to pay interim compensation up to 20% of the cheque amount NI Act 143A, and an appellate court can require a further deposit of at least 20% NI Act 148.
Cheques Issued by Companies
Where a company's cheque bounces, the company must be made an accused, along with the persons who were in charge of and responsible for its business at the time NI Act 141. The managing director and signatory are usually liable; non-executive and independent directors are liable only if specific facts show their role. The notice should be addressed to the company and to the responsible directors.
Punishment and Settlement
Imprisonment up to 2 years, or fine up to twice the cheque amount, or both. The offence is compoundable — the parties can settle at any stage NI Act 147. A civil summary suit for recovery under Order XXXVII CPC can be filed in parallel. See: how to recover money →
If You Are the Accused
Possible defences include no legally enforceable debt, debt already paid, defective or late notice, a complaint filed out of time, or (for directors) no role in the company's affairs. The law presumes the cheque was issued for a debt, so the accused must raise a probable defence with evidence.
Frequently Asked Questions
What is the time limit to send a cheque bounce notice?
The demand notice must be sent within 30 days of receiving the bank's cheque return memo, under Section 138(b) of the Negotiable Instruments Act.
What is the punishment for cheque bounce?
Imprisonment for up to 2 years, or a fine of up to twice the cheque amount, or both, under Section 138 of the Negotiable Instruments Act.
Where should a cheque bounce case be filed?
In the court within whose jurisdiction the payee's bank branch, where the cheque was delivered for collection, is located, under Section 142(2) of the Negotiable Instruments Act.
Are directors liable when a company cheque bounces?
Under Section 141 of the Negotiable Instruments Act, the company and the persons in charge of and responsible for its business at the time are liable. Non-executive and independent directors are not liable unless specific facts show they were responsible.
Can a cheque bounce case be settled?
Yes. The offence is compoundable under Section 147 of the Negotiable Instruments Act, and the parties can settle at any stage, including through Lok Adalat or mediation.
Need advice on your matter?
Every case turns on its own facts. Speak to Advocate Ajay Mishra for advice specific to your situation — in person at IP Extension (Delhi) or Vaishali (Ghaziabad), by phone, or by video call.