7 Things you should know about Cheque Bouncing

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Last Updated on January 16, 2026 by Satish Mishra

Updated- This post was written on December 14, 2016 and this is 2026. So what has changed now?

Cheque bouncing means a bank won’t honor a cheque due to issues like insufficient funds, signature mismatch, or date errors, triggering bank penalties and potentially serious legal action (imprisonment up to 2 years, fines up to double the amount) against the issuer under India’s Negotiable Instruments Act (NI Act) for debt repayment, requiring the payee to send a demand notice and the drawer to pay within 15 days or face a criminal complaint. 

Key Things to Know:

1. Reasons for Bounce:
  • Insufficient Funds (Most Common): Not enough money in the account.
  • Signature Mismatch: Signature on cheque doesn’t match bank records.
  • Date Issues: Post-dated cheque presented too early or expired.
  • Account Problems: Closed, frozen, or altered account.
  • Damage: Mutilated or unclear cheque. 

Consequences for the Issuer (Drawer):

  • Bank Penalties: Charges from your bank.
  • Legal Action: Payee can file a complaint under Section 138 of the NI Act.
  • Demand Notice: Payee sends notice within 30 days of bounce.
  • Payment Window: Drawer gets 15 days to pay after notice.
  • Criminal Liability: If unpaid, potential fine (up to twice the amount) or imprisonment (up to 2 years) or both.
  • Credit Score Impact: Can negatively affect creditworthiness. 

What the Payee Should Do:

  • Get Return Memo: Bank provides this stating the reason.
  • Send Legal Notice: Within 30 days of receiving the memo, demanding payment within 15 days.
  • File Complaint: If no payment after 15 days, file a complaint under Section 138 NI Act. 

Prevention is Key:

  • Always check your account balance before writing a cheque.
  • Ensure correct date, payee, and amount.
  • Sign accurately and keep cheques clean. 

Does the 7 Things you should know about Cheque Bouncing still remains the same or that has been changed, modified, altered or deleted.

Let’s discuss it one by one.

Though there were news of decriminalizing the Cheque Bounce law in June 2020 by the ministry of finance but the old law still holds the good.

Add- 2 year punishment and twice the amount of cheque still holds good.

1 Legal Notice to the drawer within 30 days of Cheque Bouncing and to ask him/her to pay the amount within 15 days, else the legal proceeding s would be initiated in the appropriate jurisdiction.
2 Preserve the proof of legal notice sent via post or registered AD along with Bank Memo and Original Cheque. This is made later the part of court file. Without this you may not be able to proceed.
3 After lapse of 15 days of period, file the complaint before a magistrate within 30 days time period. The complaint includes original copies of Cheque, Bank Memo, Authority letter, and Notice copy with acknowledgement receipts. Don’t forget to include the court fees along with the Memo (Process Form/Checklist)
4 Jurisdiction- The case can be instituted where payee maintains the account at home branch or if delivered over the counter, then where drawer maintains the account. For multiple Cheques against the same person, the cases would be filed in the same court.

In Most simple words-
a. Where the cheque was drawn
b. Where the cheque was presented for payment
c. Where the payment had to be made.

5 Maximum 3 Cheques can be clubbed in a single case. For rest of them, you have to file another one. But they all must be filed at one place-one court only against one individual. You cannot pick multiple places as per your choice which earlier used to happen.
6 Cheque is issued towards discharge of a debt or legal liability and Cheque should have been returned or dishonoured because of insufficient funds in the drawer’s account. The sole conditions still survives today and it is a matter of fact to be proved in trial.
7 In cases of material alteration in Cheques, Sec 138 is not applicable. For recovering the amount, Civil suit can be filed and offence of cheating can be added in the complaint. You can lodge a separate FIR and file a civil suit for recovery in addition to cheque bounce case.

Rest, I am compiling all the posts available on my website LegalSeva.net on Cheque Bounce here, so that you can access all of them here.

1 Cheque Bounce Interim Compensation Case High Court Chandigarh
2 High Court Chandigarh Appeal in Cheque Bounce Case
3 Where to file Cheque Bounce cases in Chandigarh Panchkula Mohali Zirakpur
4 Criminal Revision Cheque Bounce High Court Chandigarh
5 Get Accused Arrested in Cheque Bounce Cases
6 Consequences of a Cheque Bounce Case
7 Bail in Cheque Bounce Cases
8 Legally Enforceable Debt in Cheque Bounce Cases
9 Cheque Bounce Case Acquittal in a Criminal Case
10 Acquittal in Cheque Bounce Cases
11 Cheque Bounce Law Amendment to Come
12 False Cheque Bounce Case. Defend It!
13 Cheque Bounce Procedure in Tricity
14 Cheque as a Security for Job in India
15 How to Reply a Legal Notice

Post Written by – Research Team of LegalSeva (LawFirm) of Satish Mishra Advocate. Responses from Google’s AI Overview  included in Post.

Folks, if you think, I have missed something to write upon, please feel free to call on 99888-17966 and discuss the topic.
Rest for case specific advice get in touch with the Cheque Bounce Lawyers in Chandigarh Panchkula Mohali Kharar Zirakpur Derabassi.

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