Cheque bounce or cheque non-payment is a serious offence in India that is punishable with imprisonment or fine under Section 138 of the Negotiable Instruments Act. In the case of cheque bounce, a cheque beneficiary has to present the cheque issuer with a cheque bounce notice under section 138 of the Negotiable Instruments Act. This has to be done within 30 days of return of the cheque to protect the beneficiary’s rights  A cheque bounce notice is the first warning to the cheque issuer that, if the payment is not made immediately, the cheque beneficiary will go ahead with legal action. A cheque bounce notice must contain references to Section 138 of the Negotiable Instruments Act. It should contain information about when the cheque was presented in the bank, the reason for non-realization of the payment and a formal request to the cheque issuer to make the payment immediately through alternative means. All this has to be done within 30 days of the cheque bounce.

A cheque bounce notice or Section 138 notice can be easily created using the ACE ALLIANCE portal. Once this document is created, it can be printed on paper/ letterhead of the business and delivered to the cheque issuer. The cheque bounce notice should contain the name of the cheque beneficiary, the name and address of the check issuer, the date of return of cheque, the reason for return of cheque and the request to make arrangements for alternate payment immediately. It should also mention that this notice has been issued under Section 138 of the Negotiable Instrument Act. An individual should always send the Cheque Bounce notice through registered post. This is done so that the date of issuing notice can be recorded formally.  One copy of the letter must be retained by the cheque beneficiary while the other copy is delivered to the cheque issuer.


  • When any cheque is drawn from his or her bank account to another person for any form of payment, and this cheque is returned by the bank unpaid
  • The cheque has been given to the beneficiary within a period of 6 months
  • The cheque has been returned by the bank due to insufficient funds
  • The payee makes a demand for the payment by issuing a cheque bounce notice in writing, within 30 days of the receipt of information received by him or her from the bank, that funds are insufficient in the issuer’s account
  • The cheque drawer can’t make the payment of the said amount of money, within 15 days of the receipt of the cheque bounce notice
  • Legal action is started within one month of the date, on which the cause-of-action arises


  • The cheque bounce notice should be issued by the payee to the defaulter, within 30 days of dishonour of the said cheque. This notice must be sent by registered post/ speed post for acknowledgement purposes. The cheque bounce notice should be in the right format. It should contain information such as the nature of transaction/ the amount due/ the date of cheque deposit/ the date of cheque bounce/the reason for cheque bounce/and the request to make payment within 15 days
  • If the cheque defaulter can’t make the  payment within 15 days of cheque bounce notice, the payee must file a criminal case in a court within 30 days from the expiry of notice period of 15 days. A cheque bounce complaint has to be filed in a court in the city where the cheque was presented
  • Once the case is filed, the court will hear the case. The court will then issue summons under Section 138 of the Negotiable Instruments Act
  • The cheque defaulter will have to submit surety and appear before the Court to resolve this matter


  1. If the person who has committed the cheque bounce offence under section 138 is a company, all the persons who were in charge and responsible to the company for the conduct of business, will be deemed guilty of the offence and shall be liable to be proceeded against and punished in accordance of the law: The exception to this is that the sub-section protects any person liable to punishment, if he or she can prove that the offence was committed without their knowledge, or that he or she had taken all due diligence to prevent this offence
  2. If the amount of money standing to the credit of that account is insufficient to honour the cheque or it exceeds the amount arranged to be paid from that account by an agreement made with that bank, any person who authorized such an action will be deemed to have committed this offence. This person without prejudice, to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with a fine that may be twice the amount of the cheque, or with both the conditions:
  3. The cheque that has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier
  4. The payee in due course makes a demand for the payment of the said amount of money by giving a written notice to the drawer of the cheque, within fifteen days or receiving the cheque bounce information from the bank
  5. The drawer of the cheque can’t make the payment of the said amount of money to the payee within fifteen days of the receipt of the said notice
  6. Where any offence under this Act has been committed by a company, and it is proved that the offence has been committed with the consent or neglect, on the part of, any director/manager/secretary/ or other employee of the company. Then, such a director/manager/secretary/or other officer shall will be deemed guilty of that offence. They will be considered liable to be proceeded against and punished in accordance under Section 141

Once you get in touch with us at ACE ALLIANCE with your request to create a Section 138 notice, we will start the process. After our team receives all the details, our expert team of lawyers and attorney will create the Section 138 notice sample and send it across for your reference within 2- 3 business days. The price you pay for these services will includes three rounds of iterations. Therefore, if you need any changes done to Section 138 notice, our team of lawyers at ACE ALLIANCE will do the needful.