Section 138 of the Negotiable Instruments Act, 1881 deals with dishonour of cheques. A drawer can face criminal liability if the cheque is dishonoured for insufficient funds.
Essential Ingredients
The payee must issue a demand notice within 30 days of dishonour. The drawer has 15 days to pay. If not paid, the complaint can be filed within 30 days of the expiry of the 15-day period.
Defences
Defences include absence of legally enforceable debt, improper notice, payment after notice, and procedural lapses. Each case must be assessed on its facts.
Compounding
Parties can compound the offence at any stage, subject to court approval. Compounding can result in acquittal.
For case-specific advice on cheque bounce matters in Delhi or Gurugram, consult a qualified advocate.