Cheque Bounce Notice Overview

Cheque bounce or cheque non-payment in a serious offence in India punishable with imprisonment or fine under Section 138 of the Negotiable Instruments Act. In case of cheque bounce, a cheque beneficiary must present the cheque issuer with a cheque bounce notice under section 138 within 30 days of return of the cheque to protect his/her rights under Section 138 of the Negotiable Instruments Act. Cheque bounce notice is a firm and serious intimation to the cheque issuer that the cheque beneficiary will proceed with legal action if payment for the cheque is not made immediately. For a cheque bounce notice to be valid, it must contain reference to Section 138 of the Negotiable Instruments Act, information about when the cheque was presented, the reason for non-realization of payment and a request to the cheque issuer to arrange for payment immediately through alternate means. A Section 138 Notice must be presented to the cheque issuer within 30 days of return of cheque due to be valid.

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