A notice arrives by registered post or email. It says a cheque you signed was returned unpaid, demands the amount, and warns of criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881. What you do in the next 15 days decides whether there is a criminal case at all.
This guide is for the person who received the notice (the drawer), and for advocates advising them. It explains the deadline, when paying makes sense, how to reply if you dispute the debt, and the defences that do and do not hold up. If you are the person who sent the notice, read our Section 138 guide and the cheque bounce notice format instead.
Why the 15 days matter
A dishonoured cheque is not yet an offence. Under Section 138, the offence is complete only when every step has happened:
- The cheque was presented within its validity period and returned unpaid.
- The payee sent a written demand within 30 days of learning of the dishonour.
- The drawer did not pay the cheque amount within 15 days of receiving that notice.
The third step is in your hands. If you pay the cheque amount within 15 days of receipt, the offence is never committed and no valid complaint can follow. Read Sections 138, 139 and 142 on India Code.
When does the 15-day period start?
From the date you receive the notice, not the date written on it. Write the receipt date down and keep the envelope or the email.
Refusing or avoiding the notice does not help. In C.C. Alavi Haji v. Palapetty Muhammed (2007) 6 SCC 555, the Supreme Court held that a notice sent by registered post to the correct address is presumed served. The same judgment held that a drawer who genuinely did not receive the notice can pay the cheque amount within 15 days of receiving the court's summons, and the complaint would then fail.
Timeline after you receive the notice
| When | What happens |
|---|---|
| Day 0 | You receive the notice. Note the date. |
| Days 1 to 15 | Your window to pay the cheque amount, or reply disputing it |
| After day 15 | If unpaid, the offence is complete and the payee's cause of action arises |
| The next month | The payee may file a complaint within one month (Section 142(1)(b)); a late complaint needs the court to condone the delay |
| After filing | The court examines the complaint and may issue summons to you |
Under Section 142(2), the complaint is filed where the payee's bank branch is located, so the case may be in another city from where you live.
Should you pay or reply?
Pay when you owe the money
If the debt is genuine, paying the cheque amount within 15 days is the cheapest outcome. There is no case, no lawyer's fees for a trial and no risk of conviction.
- Pay only the cheque amount. A notice may also demand interest, costs or notice charges. The statute requires payment of the cheque amount. In Suman Sethi v. Ajay K. Churiwal (2000) 2 SCC 380, the Supreme Court held that a notice demanding extra sums is valid if the cheque amount is separately stated, and in Rahul Builders v. Arihant Fertilizers (2008) 2 SCC 321 it held that the demand must be for the cheque amount.
- Pay by a traceable method: bank transfer, demand draft or a payment the payee acknowledges in writing.
- Get a written receipt that refers to the cheque number and says the amount is paid against it.
- Send a short letter recording the payment and the date, by registered post or email, and keep the proof.
If you cannot pay the whole amount in time, negotiate in writing before the 15 days end. If a complaint is filed anyway, the case can still be settled later; see how to settle and compound a Section 138 case.
Reply when you dispute the debt
The Act does not require a reply. But a reply sent within the 15 days puts your version on record before any complaint is filed, and a court will notice whether a defence was raised at the first opportunity or appeared only at trial.
A useful reply:
- Refers to the notice, its date and the date you received it.
- Identifies the cheque by number, date, amount and bank.
- States your position plainly: why no legally enforceable debt was due when the cheque was presented.
- Gives the facts that support it, with dates: the contract, the payments already made, the security arrangement or the dispute.
- Asks the payee to return the cheque, or to stop misusing it.
- Is sent by registered post with acknowledgement due, and by email if one was used.
For the general structure of a reply, see how to reply to a legal notice in India.
The presumption you are up against
Once you admit signing the cheque, Section 139 presumes that it was issued for a legally enforceable debt. In Rangappa v. Sri Mohan (2010) 11 SCC 441, a three-judge bench held that this presumption covers the existence of the debt itself. It can be rebutted on a preponderance of probabilities, and in Basalingappa v. Mudibasappa (2019) 5 SCC 418 the Court held that the accused can rely on the complainant's own evidence and circumstances to do so.
In practice, that means a reply is most useful when it points to facts and documents, not general denials.
Defences that hold up, and ones that usually do not
| Situation | How courts tend to treat it |
|---|---|
| The debt was already repaid | A real defence, if you can prove the payments |
| The cheque secured a liability that never became due | Can be a defence, but Sripati Singh v. State of Jharkhand (2021) held a security cheque can attract Section 138 if the debt was due when it was presented |
| The debt is time-barred | Weaker than it looks: A.V. Murthy v. B.S. Nagabasavanna (2002) 2 SCC 642 held that a cheque given for a time-barred debt can itself be a promise to pay under Section 25(3) of the Contract Act |
| You signed a blank cheque and someone else filled it | Usually weak: Bir Singh v. Mukesh Kumar (2019) 4 SCC 197 held that the presumption still applies to a signed cheque voluntarily handed over |
| You stopped payment | Not a defence by itself: Modi Cements v. Kuchil Kumar Nandi (1998) 3 SCC 249 held that a stop-payment instruction can still attract Section 138 |
| The account was closed | Not a defence by itself: NEPC Micon v. Magma Leasing (1999) 4 SCC 253 treated closure as covered by the section |
| The notice itself was defective | A real defence if, for example, it did not demand the cheque amount or was sent outside 30 days of the dishonour |
If the cheque was a company's, Section 141 makes directors liable only if they were in charge of and responsible for the company's business at the time. In S.M.S. Pharmaceuticals v. Neeta Bhalla (2005) 8 SCC 89, the Court held that the complaint must say so. A director who had resigned, or was non-executive, should say that in the reply.
A worked example
Anil, a trader, gave a supplier a signed cheque for ₹3,00,000 as security under a supply agreement. The supplier delivered only half the goods, Anil paid ₹1,50,000 for those by bank transfer, and the contract ended. Months later, the supplier presented the security cheque, it was returned for insufficient funds, and Anil received a notice on 5 March.
Anil's options:
- Mark the deadline: 15 days from 5 March, so payment or a reply should go out by 20 March.
- Decide whether anything is owed. On his account, nothing is: the delivered goods were paid for, and the undelivered half created no liability.
- Reply by 20 March, setting out the agreement, the partial delivery, the bank transfer of ₹1,50,000 with its reference number, and the termination, and asking for the cheque to be returned.
- Collect the documents now: the agreement, invoices, delivery records, bank statement and correspondence.
If the supplier files a complaint anyway, Anil's defence will rest on those documents, and the reply will show it was raised at once. Whether it succeeds depends on the evidence; the Sripati Singh principle means the supplier will argue a debt was due.
Checklist for the 15 days
- Note the date of receipt and the 15th day
- Check the notice: cheque details, the date of the return memo, whether it was sent within 30 days, and the amount demanded
- Decide, with an advocate, whether the cheque amount is owed
- If it is, pay the cheque amount by a traceable method and get a receipt referring to the cheque
- If it is not, send a reply with facts and documents by registered post before the 15th day
- Keep copies of the notice, envelope, reply, postal receipts and tracking records
- Gather the agreement, invoices, bank statements and messages that support your position
If a complaint is filed and summons are issued, you can ask the court to excuse your personal appearance on some dates; see the exemption application format for a 138 case.
If you want a first draft of a reply, you can create a free JuniorLawyer account and adapt it with your advocate. Check every date, amount and fact against your documents before sending it.