Topic
Section 138 of the Negotiable Instruments Act, 1881 makes the dishonour of a cheque for insufficient funds a criminal offence.
24 storiesLatest 14 Oct 2026, 23:47 IST
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N. Harihara Krishnan v J. Thomas (2018) holds cognizance under Section 142 NI Act is accused-wise: a cheque-bounce complaint must name the right accused, and adding one later needs a fresh complaint within the one-month limit.
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The Supreme Court's 2023 Goenka ruling: an approved IBC resolution plan extinguishes the company's debt but not the signatory-director's personal Section 138 cheque-bounce liability.
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The Supreme Court's 19 May 2022 order set up a one-year pilot of 25 special courts in five states and online mediation to clear roughly 33.4 lakh pending Section 138 cheque-bounce cases.
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Aneeta Hada v Godfather Travels (2012) 5 SCC 661 holds that under Section 141 of the NI Act 1881 a company must be arraigned before its directors can face a cheque-bounce case.
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On 10 September 2013 the Supreme Court held in MSR Leathers v S. Palaniappan that a payee may re-present a bounced cheque and prosecute on a later dishonour under Section 138, overruling a 1998 rule.
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When a company cheque bounces under Section 138, who goes to court? The Supreme Court 2005 ruling in S.M.S. Pharmaceuticals v Neeta Bhalla fixed the rule for director liability.
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Section 138 of the Negotiable Instruments Act 1881 turns a bounced cheque into a criminal offence only if three clocks are met: a 3-month presentation window, a 30-day demand notice and a 15-day grace period.
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Under Section 21 of the Legal Services Authorities Act, 1987, a Lok Adalat award is deemed a civil-court decree - final, binding and beyond appeal. What that means for loans, cheque and NRI disputes.
Regulation
A dishonoured cheque is one of the few money disputes with a criminal remedy attached — and one of the few where the remedy is lost purely by delay. Three deadlines run in sequence, and the process is unforgiving about all three.
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Rangappa v Sri Mohan (2010) held the Section 139 NI Act presumption covers the debt itself, but an accused can rebut a cheque bounce charge on the preponderance of probabilities.
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Dashrath Rathod (2014) held a Section 138 cheque bounce case could be filed only where the drawee bank dishonours the cheque. The 2015 amendment reversed it. Here is where you actually file now.
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A Lok Adalat award is deemed a civil-court decree under Section 21 of the Legal Services Authorities Act 1987, carries no appeal, charges no court fee, and refunds fee already paid on settlement.
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The Supreme Court's 2017 ruling holds Section 138 NI Act is dominantly compensatory, so paying the cheque amount with interest and costs can close a cheque bounce case. What it means for borrowers and lenders.
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In Re Expeditious Trial (16 April 2021): the Supreme Court Constitution Bench issued binding directions to fast-track Section 138 NI Act cheque-bounce trials. What the ruling changed, and why.
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The Supreme Court's 1 March 2021 ruling in P. Mohanraj freezes Section 138 cheque bounce cases against an insolvent company under the Section 14 IBC moratorium, but not its directors under Section 141.
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The Supreme Court in Basalingappa vs Mudibasappa (2019) held that a Section 139 NI Act presumption can be rebutted on the balance of probabilities. Here is how borrowers and lenders should read it.
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In P. Mohanraj (1 March 2021) the Supreme Court held the Section 14 IBC moratorium freezes Section 138 cheque-bounce cases against a corporate debtor, but directors under Section 141 stay liable.
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Rangappa v. Sri Mohan (7 May 2010) held that Section 139 of the NI Act presumes the existence of a legally enforceable debt, putting the burden on the cheque drawer to rebut it.
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The Supreme Court's Meters and Instruments v Kanchan Mehta ruling holds a Section 138 cheque-bounce offence is primarily a civil wrong, letting courts close cases on full payment.
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The Supreme Court's Dashrath Rupsingh ruling of 1 August 2014 reshaped where a Section 138 cheque-bounce complaint can be filed, and the 2015 amendment changed it again. Here is the rule that applies today.
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In 2014 the Supreme Court's Dashrath Rupsingh Rathod ruling fixed Section 138 cheque bounce jurisdiction at the drawee bank, then the 2015 NI Act amendment moved it back to the payee. Here is where you file today.
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Section 138 NI Act turns a bounced cheque into a criminal offence: the 30-day demand notice rule, the 15-day payment window, and how the Section 139 presumption shifts the burden onto the drawer.
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Section 138 NI Act explained: five statutory ingredients, the 30-day notice and 15-day grace, plus how Section 142(2) reversed Dashrath Rupsingh on territorial jurisdiction.
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Section 138 NI Act 1881 caps cheque-bounce fine at twice the cheque amount and prison up to 2 years. SC affirms wide use, with 20% interim compensation under Section 143A.
