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Cheque Bounce Legal Notice Format under Section 138 NI Act

Section 138, proviso (b) and (c), read with Sections 139, 141 and 142, Negotiable Instruments Act, 1881

Free sample · Word, print and copy · Updated

Sample format, not legal advice. This is a sample format for general information. It is not legal advice and does not create a lawyer–client relationship. Facts, court practice, court fees and stamp duty differ by state and by case. Check the current law and your local court rules, or speak to an advocate, before you file, send or sign it.

A cheque bounce legal notice is the written demand that the payee must send to the drawer after a cheque is returned unpaid. It is a legal pre-condition for a criminal complaint under Section 138 of the Negotiable Instruments Act: without a valid notice sent in time, the complaint fails.

The timeline is strict. The cheque must be presented within its validity period (three months from its date for most cheques under RBI rules). The notice must be sent within 30 days of receiving the bank's information that the cheque was returned. The drawer then has 15 days from receiving the notice to pay the cheque amount. If he does not, the complaint must be filed within one month after those 15 days end (Section 142). This notice is different from a general legal notice or a money recovery notice, which have no such statutory timetable.

Sent by
The payee or holder in due course, usually through an advocate
Sent to
The drawer of the cheque; for a company, the company and the directors/officers in charge (Section 141)
Law
Section 138(b) and (c), NI Act
Time limit to send
Within 30 days of receiving the bank's return memo
Time given to pay
15 days from receipt of the notice
Stamp paper
Not needed; advocate's letterhead or plain paper

When to use this format

  • A cheque given to you for a debt or liability was returned unpaid for 'funds insufficient' or 'exceeds arrangement'.
  • The cheque was returned for 'account closed', 'payment stopped by drawer' or 'signature differs' — courts have generally treated these as covered too, depending on the facts.
  • The cheque was issued by a company or firm, and you want to fix liability on the persons in charge of its business.
  • You re-presented the cheque within its validity and it bounced again, and no notice has yet been sent.
  • If 30 days from the return memo have already passed, a Section 138 case may not lie on that dishonour; consider a money recovery notice or a fresh presentation within validity.

Demand notice under Section 138 of the Negotiable Instruments Act

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Replace everything in [square brackets] with your own details. Delete lines that do not apply.

[ADVOCATE'S NAME]
Advocate
[CHAMBER ADDRESS]
Mobile: [MOBILE NUMBER] | Email: [EMAIL]
Enrolment No. [ENROLMENT NUMBER]

Ref. No.: [REFERENCE NUMBER]
Date: [DATE]

BY SPEED POST WITH PROOF OF DELIVERY AND BY EMAIL

To,
[FULL NAME OF DRAWER]
[FULL ADDRESS WITH PIN CODE]

[IF THE DRAWER IS A COMPANY OR FIRM, ADDRESS IT AS:]
1. [COMPANY / FIRM NAME], through its [Managing Director / Partner], [REGISTERED OFFICE ADDRESS]
2. [NAME], [Director / Partner], [ADDRESS]
3. [NAME], [Director / Authorised Signatory], [ADDRESS]

Subject: Legal notice under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of cheque no. [CHEQUE NUMBER] dated [CHEQUE DATE] for Rs. [AMOUNT]

Sir / Madam,

Under instructions from and on behalf of my client, [CLIENT'S FULL NAME], S/o / D/o / W/o [NAME], R/o [CLIENT'S ADDRESS] [OR: [COMPANY NAME], through its authorised signatory [NAME]] (hereinafter "my client"), I serve upon you the following notice:

1. That [DESCRIBE THE DEBT OR LIABILITY — e.g. you borrowed Rs. [AMOUNT] from my client on [DATE] / my client supplied goods to you under invoice no. [NUMBER] dated [DATE] for Rs. [AMOUNT]], and a sum of Rs. [AMOUNT] became legally due and payable by you to my client.

2. That in discharge of the said debt / liability, you issued to my client cheque no. [CHEQUE NUMBER] dated [CHEQUE DATE] for Rs. [AMOUNT] (Rupees [AMOUNT IN WORDS] only), drawn on [DRAWER'S BANK], [BRANCH], from your account no. [ACCOUNT NUMBER, IF KNOWN].

3. That on your assurance that the cheque would be honoured, my client presented it for payment through [CLIENT'S BANK], [BRANCH], on [DATE OF PRESENTATION], within its period of validity.

4. That the cheque was returned unpaid with the remark "[EXACT REASON IN THE RETURN MEMO, e.g. Funds Insufficient]", and my client received the cheque return memo dated [DATE OF MEMO] from the bank on [DATE OF RECEIPT OF MEMO].

5. That you issued the cheque knowing that it would be presented for payment, and its dishonour makes you liable for the offence under Section 138 of the Negotiable Instruments Act, 1881. Under Section 139 of the Act, it is presumed that the cheque was issued for the discharge of a legally enforceable debt.

6. I therefore call upon you to pay to my client the said amount of Rs. [AMOUNT] (Rupees [AMOUNT IN WORDS] only), being the amount of the cheque, within 15 (fifteen) days of receipt of this notice, by [DEMAND DRAFT / BANK TRANSFER TO ACCOUNT NO. [NUMBER], IFSC [CODE] / CASH AGAINST RECEIPT].

7. Please take notice that if you fail to pay the said amount within 15 days of receipt of this notice, my client shall file a criminal complaint against you under Sections 138 and 142 of the Negotiable Instruments Act, 1881 before the competent court, entirely at your risk as to costs and consequences.

8. This notice is without prejudice to my client's right to recover interest, costs and damages, and to take any other civil or criminal action available in law, all of which are expressly reserved.

A copy of this notice is retained in my office for record and further action.

[SIGNATURE]
[ADVOCATE'S NAME]
Advocate for [CLIENT'S NAME]

Enclosures: Copy of cheque no. [NUMBER] and return memo dated [DATE]

How to fill it in

  1. Count the 30 days correctlyThe 30 days run from the date you received the bank's information of dishonour (usually the return memo), not from the cheque date. Send the notice well before the last day. Our cheque bounce timeline calculator helps you work out the dates.
  2. Write the cheque amount exactlyParagraph 6 must demand the cheque amount exactly as written on the cheque. Keep interest, costs and other claims separate (paragraph 8) so that the demand for the cheque amount is clear.
  3. Copy the return memo reason word for wordWrite the reason exactly as printed on the memo. Attach copies of the cheque and memo.
  4. Describe the debt honestlySection 138 applies only to a cheque issued for a legally enforceable debt or liability. State the transaction behind the cheque clearly; avoid vague phrases like 'friendly loan' without details.
  5. Name the right persons for a company chequeAddress the company and the directors or partners who were in charge of and responsible for its business, as required by Section 141. Sending to the company alone weakens a later case against individuals.
  6. Send to every known address, with proofSend by Speed Post with proof of delivery (Registered Post has been merged into Speed Post since 1 September 2025, so ask for the proof-of-delivery option when booking), and by email if known. Keep the receipts and tracking reports. A notice sent to the correct address is generally presumed served even if refused or unclaimed.
  7. Diary the complaint deadlineNote the date the notice was received. The cause of action arises on the 16th day if payment is not made, and the complaint must be filed within one month after that.

Documents to attach

  • Copy of the dishonoured cheque (front and back)
  • Cheque return memo from the bank
  • Proof of the debt or liability (loan agreement, invoice, ledger, messages)
  • Postal receipts, tracking reports and email delivery proof (keep after sending)
  • Authority letter or board resolution if the payee is a company
  • Company master data (from the MCA website) showing directors, for a company cheque

The Section 138 timeline at a glance

  • Present the cheque within its validity — three months from its date under the RBI rule for most cheques.
  • Send the notice within 30 days of receiving the return memo (Section 138(b)).
  • The drawer has 15 days from receiving the notice to pay (Section 138(c)).
  • If unpaid, file the complaint within one month from the day after the 15 days end (Section 142(1)(b)); a court may condone delay for sufficient cause.
  • File the complaint before the Magistrate where the payee's bank branch (where the cheque was presented through the payee's account) is situated (Section 142(2)); if the cheque was presented otherwise than through an account, the court where the drawer's bank branch is situated. See our cheque bounce complaint format.

Common mistakes

  • Sending the notice after 30 days from receipt of the return memo — the complaint will fail.
  • Demanding an amount different from the cheque amount, or mixing interest into the main demand.
  • Giving less than 15 days to pay, or filing the complaint before the 15 days are over.
  • Sending a notice only to the company and not to the directors or partners responsible.
  • Not keeping proof of sending and delivery.
  • Sending a second notice on a later dishonour of the same cheque after the first notice period expired without filing a complaint, and relying on the second — check the law carefully before doing this.

Frequently asked questions

What is the time limit to send a cheque bounce notice?
Within 30 days of receiving information from the bank that the cheque was returned unpaid, under proviso (b) to Section 138 of the NI Act. The date of the return memo, or the date you actually received it, is usually the starting point; keep proof of that date.
What happens after I send the notice?
The drawer has 15 days from receiving the notice to pay the cheque amount. If he pays, the matter ends as far as Section 138 is concerned. If he does not, you can file a complaint before the Magistrate within one month after the 15 days end.
Can I claim interest and legal costs in the notice?
You may mention them, but the demand for the cheque amount should be clear and separate. In Suman Sethi v. Ajay K. Churiwal (2000), the Supreme Court held that a notice is not invalid merely because it also mentions other sums, as long as the cheque amount is demanded.
Can I present the cheque again after it bounces?
Yes, as long as it is within the cheque's validity. In MSR Leathers v. S. Palaniappan (2013), the Supreme Court held that a payee who did not prosecute on an earlier dishonour can still act on a later presentation and dishonour, if all the steps are taken within time.
Can the notice be sent by email or WhatsApp?
Many courts have accepted electronic service, but postal service with proof of delivery remains the safest. Send the notice by Speed Post with proof of delivery and, in addition, by email or WhatsApp if available.

Reminder: This is a sample format for general information. It is not legal advice and does not create a lawyer–client relationship. Facts, court practice, court fees and stamp duty differ by state and by case. Check the current law and your local court rules, or speak to an advocate, before you file, send or sign it. Spotted an error? Tell us.