Cheque Bounce Case in Hyderabad: The Complete Guide (Section 138)

Quick answer: The usual demand-notice period is 30 days from receiving the bank’s information about dishonour. After service, the drawer has 15 days to pay. If payment is not made, a complaint must ordinarily be filed within one month from the cause of action. A reply or negotiation alone does not extend these periods. Preserve the memo, receipt dates and postal records and have the dates checked promptly.

This guide covers the whole process as it applies in Hyderabad — for both sides of a bounced cheque. It is written as public legal information by Musab Hashmi & Associates, Advocates, Hyderabad.

What Section 138 actually says

Section 138 of the Negotiable Instruments Act, 1881 makes it an offence to issue a cheque that is dishonoured for insufficiency of funds or because it exceeds the arrangement with the bank. Three conditions must all be satisfied:

• The cheque was issued to discharge a legally enforceable debt or liability — wholly or in part;
• It was presented within the cheque’s validity period. The Act itself refers to six months, but the Reserve Bank of India reduced the validity of cheques to three months, and the RBI may revise this from time to time — so always check the position current on your date;
• The payee followed the notice procedure and the drawer failed to pay within the statutory window.

The offence is not the bouncing itself. It is the failure to pay after a valid demand notice. That distinction decides many cases.

The four deadlines that decide everything

Use the notice deadline checker for the usual 30-day notice period. Complaint limitation needs a separate review of service evidence.

Why notice service matters

There is no fixed 60-day or 75-day total from the bank memo. Send the demand notice within 30 days of receiving the bank’s dishonour information. The drawer then has 15 days from service to pay; if unpaid, the complaint period is one month from the resulting cause of action. Refusal or return requires assessment of actual or deemed service and does not simply remove the 15-day payment period. Complaint delay may be condoned on sufficient cause; that is different from a late notice.

If the cheque was given to you (you are the payee)

Step 1 — Collect the paperwork immediately

You need the original cheque, the bank return memo stating the reason for dishonour, and — most importantly — proof of the underlying debt: the invoice, loan document, agreement, ledger entry or chat/email trail showing why the cheque was given. Cases are won and lost on this last item.

Step 2 — Send the legal notice within 30 days

The notice should identify the cheque, dishonour and liability and clearly demand the cheque amount. Use a legally appropriate mode of dispatch to the correct address and preserve the notice, postal receipt, tracking and returned envelope. See the demand notice guide. An advocate should check both dispatch and service evidence.

Step 3 — File the complaint if payment does not come

For a cheque collected through an account, Section 142(2)(a) generally places jurisdiction at the branch where the payee or holder in due course maintains that account. Depositing it at another branch does not by itself change this. For presentation otherwise than through an account, Section 142(2)(b) looks to the drawee-bank branch where the drawer maintains the account. Have the bank records and local court allocation checked before filing.

The competent magistrate and filing establishment in Hyderabad, Secunderabad or the surrounding districts must be identified from the applicable jurisdiction and current court allocation.

Step 4 — What happens after filing

1. Registration as an STC — cheque bounce matters are ordinarily registered as a Summary Trial Case (STC) under the Negotiable Instruments Act. That is the case type you will see on the cause list and when tracking the matter online, so note the STC number once it is allotted.
2. Sworn statement — the complainant’s initial statement is recorded and the court decides whether to take cognizance.
3. Summons to the accused — the drawer is summoned to appear.
4. Appearance and bail — the accused appears and is generally released on bail in these matters.
5. Plea — the substance of the accusation is put to the accused.
6. Complainant’s evidence — under Section 145, evidence may be given on affidavit, which shortens proceedings considerably.
7. Chief examination, then cross-examination, followed by defence evidence.
8. Final arguments and judgment.

Settlement may be considered during proceedings, subject to the parties’ agreement and appropriate court orders.

If you received the notice (you are the drawer)

A Section 138 notice is serious — it is the step before a criminal complaint — but receiving one does not mean you will be convicted. What matters is what you do in the next 15 days.

• Do not ignore it. Silence removes your best options and strengthens the complainant’s case.
• If the money is genuinely owed, paying within 15 days ends the matter — no offence is made out.
• If you dispute it, reply within the window setting out your position. A well-drafted reply becomes part of the record and shapes the entire case.
• If you cannot pay in full, a negotiated settlement — often in instalments — is very commonly how these matters resolve.

Full guide: I received a cheque bounce notice — what should I do?

Issues that may form a defence

Under Section 139, the court presumes the cheque was issued for a legally enforceable debt. That presumption is rebuttable — but the burden sits on the accused to raise a probable defence. The following issues need evidence and case-specific assessment:

• No legally enforceable debt — the cheque was not issued for any subsisting liability, or the debt was already discharged;
• Defective notice — no clear demand for the cheque amount, wrong address, or the demand mixed with unrelated claims;
• Deadlines missed — presentation beyond validity, notice beyond 30 days, or complaint beyond one month;
• Misuse of a blank or security cheque — where the amount or details were filled in contrary to the arrangement, and this can be proven;
• Materially altered cheque, or a signature that is not the drawer’s. A related question that often matters: were all the particulars on the cheque written by the drawer, or were some filled in by another hand?

Defences that generally do not succeed: simply calling it a “security cheque” without more, claiming you had no funds, or saying you never received the notice when it was correctly sent to your address.

What the drawer risks on conviction

• Imprisonment up to two years, or a fine up to twice the cheque amount, or both;
• Interim compensation — under Section 143A the court may direct payment of up to 20% of the cheque amount during the trial;
• On appeal — under Section 148, the appellate court may require a deposit of at least 20% of the fine or compensation awarded, before the appeal proceeds.

Settlement and compounding

Under Section 147, the offence is compoundable — the parties can settle at any stage, and courts actively encourage it. A large number of these matters are also settled through Lok Adalat, which offers a quicker and less expensive route than continuing the trial. A settlement is usually recorded before the court, often with an instalment schedule and a consequence if instalments fail. For a complainant, a settlement that actually pays is frequently better than a conviction that does not recover the money. For a drawer, it removes the criminal risk. This is why realistic negotiation is a core part of handling these matters, not a sign of weakness on either side.

Realistic timelines and costs

Section 138 cases are designed to be summary in nature, and Section 145 affidavit evidence speeds them up — but real timelines are longer than the design suggests. In practice, expect one to three years in Hyderabad.

We would rather state this honestly than quote a comfortable figure. What lengthens a matter most is not the law but the calendar: adjournments sought by counsel on either side, and periods when the presiding officer is on training or leave. What shortens it is complete documentation from the start, prompt service on the accused, and a realistic approach to settlement.

On cost: fees vary with the cheque amount, the stage at which the matter resolves, and whether you are complainant or accused. The firm discusses and agrees the fee structure before any work begins. Court fees and notice costs are separate and modest relative to the claim. This is a practical advantage over a civil recovery suit: unlike a recovery suit, a Section 138 complaint does not carry a heavy court fee calculated as a percentage of the amount claimed.

Mistakes that cost people their case

• Missing the 30-day notice window — by far the most common and most fatal;
• Sending a notice that demands a lump sum mixing the cheque amount with other dues;
• No documentary proof of the underlying debt;
• Sending the notice to an old or incorrect address;
• Filing in the wrong court, ignoring Section 142(2);
• For the drawer: ignoring the notice entirely, then trying to build a defence after the complaint is filed.

Related guides

• Cheque bounce notice deadline checker
• The 30-day notice rule and what the notice must say
• I received a cheque bounce notice — what now?
• Filing a cheque bounce case in Hyderabad

Sources for the time limits and court jurisdiction

• Supreme Court: C.C. Alavi Haji (2007), notice and deemed service
• Supreme Court: N. Harihara Krishnan (2017), complaint limitation under Section 142
• Supreme Court: Jai Balaji Industries (2025), Section 142(2) jurisdiction

Notice, limitation and jurisdiction guidance updated 13 September 2026. General information; have your own evidence and dates checked.

This guide is general legal information published for public awareness by Musab Hashmi & Associates, Advocates, Hyderabad. It is not legal advice, does not create an advocate–client relationship, and should not be acted upon without advice on your specific facts. Statutory provisions are stated as per the Negotiable Instruments Act, 1881 as amended.