Section 138 ingredients: what a complainant must prove

To win a section 138 case, the complainant must establish six things: a cheque drawn by the accused on his own account, for a legally enforceable debt or liability, presented within validity, returned unpaid for want of funds (or a reason treated the same way), followed by a written demand within 30 days, and non-payment within 15 days of that notice. If one link is missing, the complaint fails, even when the debt is real.

Why lawyers treat this as a checklist

Section 138 is a penal provision, so courts read its conditions strictly. A criminal court will not excuse a missed condition because the money was really owed. That is why an experienced lawyer, before drafting anything, writes the six ingredients on a sheet and ticks each against a document. You can do the same before you spend money on a notice.

For each ingredient below, the question is simple: what paper proves it?

Ingredient 1: the cheque must be the drawer’s own

The accused must be the person who drew the cheque on his own account. In Aparna A. Shah v. Sheth Developers (2013) the Supreme Court held that in a joint account, only the joint holder who signed the cheque can be prosecuted, not the other holder. A cheque from a relative’s or a friend’s account raises awkward questions, so ask the debtor for his own cheque. For company and firm cheques, section 141 adds the people in charge of the business (see the defences page for how directors defend).

Ingredient 2: a legally enforceable debt or liability

The Explanation to section 138 says “debt or other liability” means a legally enforceable debt or other liability. This is the ingredient that is fought over most at trial. Typical debts that qualify:

• the price of goods supplied or services rendered;
• repayment of a loan, including a loan to a friend or relative;
• rent or maintenance dues under an agreement;
• an instalment under a settlement.

Typical cheques that fail this test: a gift or donation, a payment for an illegal purpose, or a security cheque presented before any amount had become due. A cheque given as security can still found a case where the loan or instalment had fallen due and remained unpaid by the date of presentation (Sripati Singh v. State of Jharkhand, 2021).

Time-barred debts

A debt on which the three year limitation has run cannot be sued for. But section 25(3) of the Indian Contract Act, 1872 treats a written, signed promise to pay a time-barred debt as a valid contract. In A.V. Murthy v. B.S. Nagabasavanna (2002) a cheque for a time-barred debt was treated as such a promise. Whether the debt was in fact time-barred is a matter for evidence.

Cash loans of ₹20,000 or more

Section 269SS of the Income-tax Act, 1961 restricts accepting loans of ₹20,000 or more in cash. In Sanjabij Tari v. Kishore S. Borcar (25 September 2025) the Supreme Court held that breaching that rule attracts a tax penalty but does not by itself make the debt unenforceable for section 138. That keeps the remedy open. But a large cash loan is still hard to prove, because the accused may ask whether you had that cash. A bank transfer is far easier.

Part payment

If the drawer paid part of the debt after giving the cheque and you present the full amount, he will argue that the cheque exceeded what was due. Record any part payment in writing and take a fresh cheque for the balance.

Ingredients 3 and 4: presentation and dishonour

The cheque must have been presented within six months of its date or its validity, whichever is earlier. Since the RBI direction of 1 April 2012, validity is three months, so three months is the real limit. The return must be for a funds-related reason or one that courts treat alike. A technical return, such as a stale cheque, does not complete the offence. Read the return memo guide for the list.

Ingredients 5 and 6: notice and non-payment

The payee must send a written demand within 30 days of receiving the bank’s information about the return. The drawer then has 15 days from receiving the notice to pay. If he pays the cheque amount inside that period, no offence is made out. If he does not, the offence is complete when the 15 days end. The notice should name the cheque number, date and amount, state the debt, give the presentation and return dates, and demand the cheque amount. See the timeline page for dates worked on a calendar.

In C.C. Alavi Haji v. Palapetty Muhammed (2007) the Supreme Court held that a drawer who says he never got the notice can pay the cheque amount within 15 days of receiving the court summons, and if he does not, he cannot rely on non-receipt. Courts also usually treat a notice sent by registered post to the correct address, and returned “refused” or “unclaimed”, as served unless the drawer proves otherwise.

A worked example

Kavita in Nagpur lent her cousin ₹4 lakh by bank transfer in 2024. In 2026 he gave her a cheque for ₹4 lakh. In between he had repaid ₹1 lakh by UPI. She presented the full amount and the cheque bounced for want of funds. The cousin’s lawyer pointed to the UPI repayment and argued that only ₹3 lakh was due on the date of presentation. Kavita’s ingredient 2 was now attackable. A fresh cheque for ₹3 lakh would have closed that gap.

Common mistakes by complainants

• Not recording what the cheque was for, and relying on memory years later.
• Sending a notice that demands a mixed lump sum without separately stating the cheque amount.
• Naming only the shop, not the proprietor personally.
• Sending the notice to one address only.
• Filing the complaint before the 15 days end, or after the one month limit without an application for delay.
• Filing a police complaint for cheating instead of, or in addition to, the section 138 complaint. Cheating under section 318 of the Bharatiya Nyaya Sanhita, 2023 needs dishonest intention from the start, which a later bounce does not prove. Section 138 does not need it.

The cheque bounce law certificate course turns this into a checklist and model formats. The certificate is a certificate of completion issued by Lexfolio and is not a professional qualification.

Frequently asked questions

Does the complainant have to prove the debt in every case?

The law starts with a presumption in the complainant’s favour (ss.118 and 139) once the accused admits his signature. The accused can rebut it. If he raises a probable defence, the complainant then has to prove the debt.

Can I prosecute the other holder of a joint account?

Not if he did not sign the cheque. Only the signatory can be prosecuted (Aparna A. Shah, 2013).

Does a cheque for a gift qualify?

No. The cheque must be for a legally enforceable debt or liability.

Can a company file a section 138 complaint?

Yes, through an authorised officer. The payee can be a company, a firm or an individual.

Is an advocate necessary to send the notice?

No. The payee can send it in his own name. Many people use an advocate for accuracy.

Quick quiz

Sources

• Negotiable Instruments Act, 1881: ss.118, 138 and its Explanation, 139, 141, 142
• Indian Contract Act, 1872: s.25(3)
• Income-tax Act, 1961: s.269SS
• Bharatiya Nyaya Sanhita, 2023: s.318
• Aparna A. Shah v. Sheth Developers (2013); A.V. Murthy v. B.S. Nagabasavanna (2002); C.C. Alavi Haji v. Palapetty Muhammed (2007); Sripati Singh v. State of Jharkhand (2021); Sanjabij Tari v. Kishore S. Borcar (2025)

This page is for education and general information, not legal advice for a specific case. Law as on 7 November 2026.