Judicial Magistrate, Patiala
Cheque Bounce Cases — Section 138
Dishonour of a cheque for insufficient funds becomes an offence only if the statutory notice and limitation requirements are met. The timelines are strict and are the first thing to check.
How it ordinarily proceeds.
The usual course is set out below. Individual matters vary with the facts, the sections invoked and the court's board.
- 01Return memoThe bank returns the cheque with a memo stating the reason. The date on that memo starts the clock.
- 02Legal notice within 30 daysA demand notice is issued to the drawer calling upon him to pay within 15 days.
- 03The 15 day windowIf payment is made within this period, no offence is made out. If not, the cause of action arises.
- 04Filing the complaintThe complaint is filed before the Judicial Magistrate at Patiala within 30 days of the expiry of the notice period.
- 05Summons and appearanceThe court takes cognizance and issues summons to the accused.
- 06Trial or settlementThese matters are frequently settled. Where they are not, the complaint proceeds to trial and judgment.
Common questions
Questions that come up.
What if the 30 day notice period has lapsed?
The limitation is strict, though the court has power to condone delay in filing the complaint on sufficient cause being shown. The position should be assessed on the specific dates.
Which court has jurisdiction?
Ordinarily the court within whose jurisdiction the payee's bank branch is situated, where the cheque was presented for collection.
Can these cases be settled?
Yes, and they very often are. Compounding is permitted, and settlements are recorded by the court at any stage, including in appeal.
What defences are available to the drawer?
Common defences include that there was no legally enforceable debt, that the notice was not properly served, or that the statutory timelines were not followed.
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