Commonly asked questions in cases under section 138 of negotiable instruments act in India

Here are some commonly asked questions in cases under Section 138 of the Negotiable Instruments Act in India, along with concise answers:

## What legal action can be taken for a bounced cheque?

A criminal prosecution can be initiated against the drawer under Section 138 of the Negotiable Instruments Act. Additionally, a civil case for recovery can be simultaneously filed.

## What are the steps to file a criminal complaint for cheque bounce?

1. Send a demand notice to the drawer within 30 days of learning about the dishonor

2. If the drawer doesn't pay within 15 days of receiving the notice, the payee can file a criminal complaint in court

## Which court has jurisdiction for cheque bounce cases?

The courts within whose local jurisdiction the cheque was dishonored by the bank have jurisdiction. If the cheque was delivered to the bank for payment, the complaint should be filed where the drawer keeps their account.

## When is a cheque bounce not considered an offence?

- When the cheque is given as an advance or security

- If there is a discrepancy in the amount stated in words and figures

- If the cheque is found mutilated

- When a cheque is issued to a charitable trust as a gift

## Can the court close cheque bounce proceedings if the accused pays the amount?

Yes, if the accused deposits the cheque amount along with interest and costs assessed by the court by a specified date, the court can close the proceedings under Section 143 read with Section 258 CrPC.

## What are the key ingredients of an offence under Section 138?

1. The cheque must have been drawn for discharging an existing debt or liability

2. The cheque must have been presented to the bank within the prescribed period

3. The cheque must have been returned due to insufficient funds or the account being closed

4. The payee must have sent a written notice to the drawer within 30 days of receiving the dishonor memo

5. The drawer must have failed to make the payment within 15 days of receiving the notice.