A complaint under Section 138 of the Negotiable Instruments Act, 1881 is one of the most commonly filed proceedings in the Delhi courts. It is also one of the most commonly dismissed at the threshold — not because the money is not owed, but because a step in the statutory sequence was taken a few days late.
The Statutory Clock
Step one — the cheque must be presented in time
A cheque is valid for three months from the date it bears. Presentation after that period takes the transaction outside Section 138 altogether, whatever the merits.
Step two — the demand notice within thirty days
The notice must be issued within thirty days of receipt of information from the bank that the cheque has been returned unpaid. It must demand the cheque amount specifically. A notice demanding interest, costs or an unrelated sum without clearly identifying the cheque amount has repeatedly been held defective.
Step three — fifteen days for the drawer to pay
The cause of action arises only when the drawer fails to pay within fifteen days of receipt of the notice. A complaint filed before that period expires is premature and liable to be dismissed.
Step four — thirty days to file the complaint
The complaint must be filed within thirty days of the expiry of the fifteen-day period. Delay beyond this requires an application for condonation showing sufficient cause, which the court may or may not allow.
Documents Required to File
- The original dishonoured cheque
- The bank's return memo stating the reason for dishonour
- A copy of the demand notice with proof of dispatch and, where available, of delivery
- Documents evidencing the underlying debt or liability
- Where the complainant is a company, a board resolution authorising the signatory
Who Can Be Made an Accused
Under Section 141 of the Act, where the drawer is a company, persons who were in charge of and responsible to the company for the conduct of its business at the relevant time may also be proceeded against. A specific averment to that effect is required in the complaint; a bare recital naming every director is regularly challenged at the summoning stage.
Defences Commonly Raised
- The cheque was issued as security and not in discharge of a debt.
- There was no legally enforceable debt or liability on the date of the cheque.
- The notice was defective, or was not served at the correct address.
- The complaint was filed beyond the period prescribed.
- The signatory was not responsible for the conduct of the company's business.
The presumption under Sections 118 and 139 of the Act operates in favour of the holder of the cheque, and the burden of rebutting it lies on the accused. That burden is one of preponderance of probabilities, not proof beyond reasonable doubt.
Frequently Asked Questions
Where is a cheque bounce complaint filed?
Under Section 142(2) of the Negotiable Instruments Act, the complaint is filed before the court within whose jurisdiction the branch of the bank where the payee maintains the account is situated. In Delhi this determines which district court complex the complaint goes to.
Can a cheque bounce matter be settled after the complaint is filed?
Yes. The offence is compoundable and courts actively encourage settlement, often through mediation. Where the cheque amount is paid, the complaint is generally compounded and the accused acquitted on those terms.
What if the demand notice is returned unclaimed?
Service is presumed where the notice has been correctly addressed and dispatched, and a notice returned as unclaimed or refused is generally treated as served. The presumption is rebuttable, and the address used becomes an issue at trial.