Dishonour of a cheque due to insufficient funds or other banking reasons is a criminal offence under Indian law. If a cheque issued towards payment of a legally enforceable debt is dishonoured by the bank, the payee may initiate criminal proceedings against the drawer.

What is Cheque Bounce under Section 138?

A cheque bounce occurs when a bank refuses to honour a cheque due to reasons such as:

  • Insufficient funds in the account
  • Account closed
  • Payment stopped by drawer
  • Signature mismatch
  • Exceeds arrangement with the bank

If the cheque was issued for a legally enforceable debt or liability, dishonour may attract criminal liability under Section 138 of the Negotiable Instruments Act, 1881.

Legal Requirements to File a Cheque Bounce Case

Before filing a criminal complaint, the following legal steps must be followed:

1. Dishonour of Cheque

The cheque must be presented to the bank within its validity period.

2. Legal Demand Notice

The payee must send a legal notice within 30 days of receiving the bank memo regarding dishonour.

3. Waiting Period

The drawer is given 15 days from receipt of notice to make payment.

4. Filing Complaint

If payment is not made within 15 days, a criminal complaint may be filed before the Judicial Magistrate within the prescribed limitation period.

Punishment for Cheque Bounce

If the court finds the accused guilty under Section 138 of the Negotiable Instruments Act, 1881, the punishment may include:

  • Imprisonment for up to two years, or
  • Fine which may extend to twice the amount of the cheque, or
  • Both imprisonment and fine

Courts may also direct compensation to the complainant.

For Complainants

  • Drafting and issuing legal demand notice
  • Filing cheque bounce complaints before court
  • Representation during trial proceedings
  • Applications for compensation and recovery

  • Legal defence in cheque dishonour cases
  • Challenging the maintainability of complaints
  • Negotiation and settlement of disputes
  • Representation before Magistrate Courts

Each case requires careful evaluation of documents, financial transactions, and statutory compliance.

Courts Handling Cheque Bounce Cases in Goa

Complaints under the Negotiable Instruments Act, 1881 are generally filed before the Judicial Magistrate First Class (JMFC) having jurisdiction over the matter.

In certain cases, appeals and related proceedings may be filed before higher courts including the High Court of Bombay at Goa.