Cheque Bounce Legal Notice (Section 138 NI Act) Format

When to use this notice

Use this notice when a cheque you deposited is dishonoured for reasons such as "insufficient funds" or "payment stopped" and it was issued to discharge a legally enforceable debt or liability. The notice is mandatory: no complaint under Section 138 is maintainable unless the drawer received a demand notice and failed to pay within 15 days.

Statutory basis

Section 138 of the Negotiable Instruments Act, 1881 makes dishonour of a cheque for insufficiency of funds an offence. The demand notice must be sent within 30 days of receiving the bank’s cheque-return memo, and the drawer gets 15 days from receipt to pay. A complaint must then be filed within one month of the expiry of that 15-day period (Section 142). Punishment can extend to two years’ imprisonment or a fine up to twice the cheque amount.

Replace every [placeholder] with your own details before use.

[ON THE LETTERHEAD OF THE ADVOCATE]

By Registered Post A/D & Email

Date: [DD/MM/YYYY]

To,
[Full Name of Drawer]
[Complete Address]

Subject: Legal notice under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of cheque bearing no. [Cheque Number] dated [DD/MM/YYYY] for Rs. [Amount].

Sir/Madam,

Under instructions from and on behalf of my client, [Client Name], resident of [Client Address] (hereinafter "my client"), I serve upon you the following notice:

1. That in discharge of a legally enforceable debt/liability of Rs. [Amount] arising from [state transaction, e.g. goods supplied / loan advanced], you issued cheque no. [Cheque Number] dated [DD/MM/YYYY] drawn on [Bank Name, Branch] in favour of my client.

2. That my client presented the said cheque for encashment through [Payee Bank], which was returned unpaid vide return memo dated [DD/MM/YYYY] with the remark "[e.g. Funds Insufficient]".

3. That the dishonour of the cheque constitutes an offence under Section 138 of the Negotiable Instruments Act, 1881.

I therefore call upon you to pay the sum of Rs. [Amount] to my client within fifteen (15) days of receipt of this notice, failing which my client shall be constrained to initiate criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881 at your risk, cost, and consequences.

A copy of this notice is retained in my office for record and further action.

[Advocate Name]
[Enrolment No. / Contact]

How to send this legal notice

1. Collect the dishonoured cheque and the original bank return memo stating the reason for dishonour.
2. Confirm the return memo date — the notice must be sent within 30 days of receiving it.
3. Draft the notice on advocate letterhead citing the cheque details, transaction, and Section 138.
4. Demand payment of the exact cheque amount within 15 days of receipt.
5. Send it by Registered Post A/D (and email/courier as backup) and preserve the postal receipt and tracking.
6. If unpaid after 15 days, file a Section 138 complaint before the Magistrate within the next 30 days.

Frequently asked questions