How to Escape From Cheque Bounce Case?


Escaping from a cheque bounce case requires quick action, clear communication, and a careful comprehension of legal procedures. At first, it's essential to contact the payee quickly to clear up the situation and express your intention to resolve the issue, possibly forestalling legal action. Guaranteeing adequate funds in your account and correcting any administrative errors with your bank are fundamental subsequent stages. In India, cheque bounce cases are governed by Section 138 of the Negotiable Instruments (NI) Act, 1881, which punishes the issuance of dishonored cheques because of deficient assets or different reasons. If a legal notice is served under Section 138, answering within the specified time span is important.

Legal Framework

  • Section 138: This provision makes it a criminal offense in the event that a cheque is dishonored because of deficient funds or if it surpasses the sum arranged with the bank. Read More about Section 138 Of Negotiable Instruments Act, 1881
  • Section 139: This provision makes a legal assumption that the cheque was given for the discharge of any obligation or risk. This assumption can be invalidated by the drawer. To refute this assumption, the drawer should demonstrate that the cheque was given because of reasons other than the discharge of an obligation or responsibility.
  • Section 140: This provision determines that the holder of the cheque (the payee) is the individual possessing the cheque who has a legitimate entitlement to it.
  • Section 141: This provision accommodates liability in the event of offenses by companies. It considers each individual who was in charge of the organization at the hour of the offense, as well as the organization itself, responsible for the offense.
  • Section 142: This provision manages the procedure for the indictment of offenses under Section 138. It specifies that a complaint must be recorded within one month of the date on which the cause of action arises.

Read More About: Laws related to cheque bounce in India

Considerations to Escape a Cheque Bounce Case

  • Legal Defenses: In certain jurisdictions, there might be legal defenses accessible that could be used to avoid liability for a cheque bounce. These protections could incorporate issues connected with the validity of the cheque, absence of legitimate notice, or procedural mistakes in the legal proceedings.
  • Settlement: In some cases, cheque bounce cases can be settled out of court by paying the sum owed to the payee alongside any extra penalties or interest. This approach might actually resolve the case without any additional lawful consequences.
  • Procedural Errors: Assuming that there are procedural errors in the manner the case has been handled by the court or the complainant, challenging the case on those grounds may be possible.
  • Negotiation: Contingent upon the circumstances, negotiating with the complainant or the court-appointed mediator could prompt a resolution that is acceptable to both parties.
  • Legal Advice: It's crucial to seek advice from a lawyer specializing in cheque bounce cases. They can give guidance based on specific regulations and appropriate procedures.
  • Financial Capability: If the bouncing of the cheque happened because of genuine monetary hardships, demonstrating efforts to resolve the obligation or showing readiness to reimburse may influence how the case proceeds.

Important Conditions to Follow in Case of Cheque Bounce

  • Notice to Drawer: After the cheque bounces, the payee ought to give written notice as a printed copy to the drawer within 30 days of getting information from the bank concerning the bounce.
  • Demand for Payment: The notification should demand payment of the cheque amount in total within 15 days from the date of receipt of the notice.
  • Receipt Confirmation: It's essential to guarantee that the notice is sent through a means that provides proof of delivery, such as registered post or courier with acknowledgment due, or by hand with a receipt.
  • Non-Payment Response: If the drawer neglects to make payment within the foreordained 15 days even subsequent to getting the notice, the payee can file a complaint under Section 138 of the N.I. Act, 1881. This consolidates reporting a grievance with the Judge within 30 days of the expiry of the 15-day time span alluded to in the notification.
  • Court Procedures: The drawer will get a summon from the court, and in the event that they don't appear, a warrant for their arrest might be issued. Assuming it is determined that the drawer is at fault, there are two potential punishments: a fine equivalent to two times the cheque's amount or up to two years in prison.
  • Civil Suit: Beside the criminal complaint, the payee has the option to file a civil suit for the cheque's sum recovery. This ought to be done independently or alongside the criminal complaint.
  • Bank's Role: It's vital to note that banks don't play a role in giving notice or taking legal action in the event of a cheque bounce. The obligation lies exclusively with the payee.

legal remedies and practical solutions to escape from a cheque bounce case.

Facing a cheque bounce case can be stressful, but there are several legal remedies and practical solutions available to help you navigate and resolve the situation. These include:

Security Deposit Defense

One of the primary defenses against a cheque bounce case is demonstrating that the cheque was given as a security deposit and not as payment for an obligation or liability, so the case doesn't violate Section 138 of the N.I. Act. For example, if the cheque was given as sincere money or security from possible damages, it can be contended that it was not intended to be encashed unless certain circumstances were met or damages were incurred.

Case Reference: In the case of Shreyas Agro Services Pvt. Ltd. vs Chandrakumar S.B. (2006), it was held that the basic technique used demonstrates that the cheques were not issued to cover any present, established liabilities, according to Section 138 of the N.I. Act. Therefore, even if a security cheque bounces, criminal charges may still be brought, with the only available defense being that there was a lack of a legally binding debt.

Unaccounted Loan

Section 138 of the N.I. Act does not apply to the need to pay the unaccounted cash sum. If the cheque in question was issued as part of an unaccounted loan transaction, where no formal documentation or agreement exists, the defense can argue a lack of clarity regarding the purpose of the cheque and the absence of legal liability.

Case Reference: In the case of Sanjay Mishra v. Ms. Kanishka Kapoor, the respondent denied signing both the bill of exchange and the cheque in this case, and the court found that the applicant had failed to establish that the amount advanced was unaccounted for and that it was not disclosed to the Income Tax Authority. The applicant also admitted that the amount advanced was unaccounted for and was not disclosed to the Income Tax Authority, according to the learned judge.

Disputed Signature

In cases where the authenticity of your signature on the cheque is challenged, seeking the opinion of a recognized handwriting expert can be pivotal. A comprehensive analysis from such an expert can provide objective verification regarding the authenticity of the signature, helping to refute allegations of forgery or unauthorized use.

Stop Payment Request

If a stop payment request had been issued for a cheque due to legitimate reasons, such as a dispute with the payee or the cheque being lost, documenting proof of the request is essential. This includes obtaining a receipt or acknowledgment from the bank confirming the stop payment instruction, along with a clear explanation of the circumstances that necessitated the action.

False Case Response

In some instances, cheque bounce cases are filed maliciously or as a pressure tactic. When facing allegations of a false cheque bounce case, it becomes important to gather evidence supporting alternative modes of payment or motives behind the accusations. Providing transaction records, witness statements, or any other relevant documentation that supports your version of events can effectively counter false claims and strengthen your defense.


While it is possible to escape or mitigate the consequences of a cheque bounce case, it requires prompt action, legal knowledge, and possibly settling the debt amicably with the payee. The N.I. Act serves to prevent the misuse of cheques and ensures that transactions proceed smoothly by punishing the offense of a failed cheque. The accused also has defenses available to prevent false cases of cheque bounce. Therefore, to successfully escape a cheque bounce in India, you need to have a strategic legal defense as well as a thorough knowledge of the applicable laws. Consult a cheque bounce lawyer to guide you through the process effectively