Get the bank’s cheque return memo and note its date. Within 30 days of that date, send a written legal demand notice to the drawer for the cheque amount. The drawer then has 15 days from receiving the notice to pay. If they do not, you must file a complaint before the magistrate within one month after those 15 days expire. Punishment is imprisonment up to two years, a fine up to twice the cheque amount, or both, and courts routinely order compensation of the cheque amount. FundRaksha sends the notice within 24 hours.
The Section 138 timeline
| Step | Deadline | What it needs |
|---|---|---|
| Cheque presented and returned unpaid | Within the cheque’s validity (3 months from date) | Bank return memo with reason, e.g. “funds insufficient”, “payment stopped”, “account closed” |
| Legal demand notice to the drawer | Within 30 days of the return memo | Written notice demanding the cheque amount; sent by registered post, ideally also by email and courier |
| Drawer pays | Within 15 days of receiving the notice | If paid, no offence |
| Complaint filed before the magistrate | Within 1 month after the 15 days expire | Complaint, affidavit, cheque, memo, notice, proof of service, the underlying invoice or debt |
Each deadline is strict. Courts can condone delay in filing the complaint for sufficient cause, but the 30-day notice period is not extendable. Use the cheque bounce timeline calculator to see your dates.
What to do today
- Collect the original cheque and the original bank return memo; photograph both
- Note the memo date and count 30 days
- Gather the documents that show the cheque was for a legally enforceable debt: invoice, PO, delivery proof, ledger, or the written agreement
- Do not re-present the cheque without advice; you can, and sometimes should, but it affects the timeline
- Send the file to an advocate so the notice goes out immediately
FundRaksha assigns a dedicated advocate and sends the Section 138 notice within 24 hours, by registered post with acknowledgement due and as an e-notice, keeping proof of dispatch and delivery. India's No.1 B2B payment recovery company, trusted by 1,000+ businesses.
Why Section 138 recovers money
A Section 138 complaint is a criminal proceeding. The drawer receives a summons, must appear, and faces conviction with imprisonment and a fine up to twice the cheque amount, out of which the court can order compensation to you. Most drawers settle rather than face this, and courts encourage settlement at every stage. The complaint also puts the drawer’s directors or partners in the frame where a company issued the cheque, since the persons in charge are liable under Section 141.
Importantly, the reason for the bounce does not have to be “insufficient funds”. “Payment stopped by drawer” and “account closed” also attract Section 138 when the cheque was for a debt.
Common mistakes that lose the case
- Sending the notice late, or to the wrong address: send it to the address on record and any other known address
- Demanding more than the cheque amount in the Section 138 notice without separating it clearly; the demand for the cheque amount must be distinct
- Not keeping the return memo, or the postal receipts and tracking
- Being unable to show what the cheque was for; keep the invoice and delivery proof together with the cheque
- Waiting to “give them one more chance” past the deadline
If you also have a larger unpaid ledger, the advocate runs the Section 138 complaint for the cheque and a civil or MSME claim for the balance in parallel. See cheque bounce recovery.
Post-dated cheques and security cheques
A post-dated cheque given for an instalment or as security for a supply is covered, provided a debt existed when it was presented. See post-dated cheque not honoured. Book a free consultation today if your cheque has bounced; the 30-day window is short and the notice should go this week.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.