NIPUN GAUTAM 27 Mar 2019


Ø  Limitation is an important aspect for initiating proceedings under Section 138 or 141 of Negotiable Instruments Act. The legislature has made the timelines quite strict and Courts in India have also construed the timelines very strictly.

ü  Once a cheque is presented for encashment, and upon such presentation of the cheque gets dishonoured[1] the payee (in whose favour the cheque is drawn) have to send a Legal notice within 30 days from the date of return of the cheque.

ü  The Payee must ask the drawer of the cheque to pay the amount within 15 days.

ü  Upon the expiry of the 15 days from the service of the Legal notice, the payee has to file a complaint case before the concerned magistrate within 30 days of the said expiry.

ü  Once t Complaint case is filed in the Court of Magistrate, the pre-summoning evidence of the Complainant is done, and post which the court process (summons)[2] is issued to the Accused. The accused, upon appearing in Court on the date fixed for hearing, is asked whether he pleads guilty or not and the trial is said to have commenced at this point.

Ø  Note: In case the payee misses any of the stipulated timelines, the Cheque can be presented to the bank any number of time (if the cheque is within the validity period i.e. 3 months) and upon each time of dishonouring of the cheque, fresh cause of action arises.

Ø  Note: Nothing in the Negotiable Instrument Act precludes the payee from filing a separate civil suit for recovery of the amount due for which the limitation period is 3 years from the cause of action.

Recent Amendment to pay compensation pending trial:

Section 143A: Under this Section, the Court trying an offence under Section 138 may order the drawer of the cheque to pay interim compensation to the complainant which shall not exceed 20% of the amount of the cheque.

Section 148- An appeal by the drawer against the conviction under Section 138, the Appellate Court may order the appellant to deposit such sum which shall be minimum of 20% of the fine or compensation awarded by the trial court.

Ø  The interim compensation must be paid within 60 days from the date of the order or within such further period within such period not exceeding 30 days as may be directed by the Court.


[1] Cheque returned by bank due to insufficient balance or stop payment or it exceeds the arrangement the drawer had with the bank.

[2] Summons may be served at the place where the accused ordinarily resides or carries on its business or personally works for gain.

Did you find this write up useful? YES 10 NO 0

C2RMTo Know More

Something Awesome Is In The Work









Sign-up and we will notify you of our launch.
We’ll also give some discount for your effort :)

* We won’t use your email for spam, just to notify you of our launch.

SAARTHTo Know More

Launching Soon : SAARTH, your complete client, case, practise & document management SAAS application with direct client chat feature.

If you want to know more give us a Call at :+91 98109 29455 or Mail