What is the time frame in which a cheque bounce case is resolved in India under Section 138?

What is the time frame in which a cheque bounce case is resolved in India under Section 138?

Date : 13 Mar, 2019

Post By Barbie Duggal

Cheques are used in almost all transactions such as repayment of loan, payment of salary, bills, fees, etc. A vast majority of cheques are processed and cleared by banks on daily basis. Cheques are issued for the reason of securing proof of payment. Nevertheless, cheques remain a reliable method of payment for many people. On the other hand, it is always advisable to issue crossed “Account Payee Only” cheques in order to avoid its misuse. 

A cheque is a negotiable instrument. Crossed and account payee cheques are not negotiable by any person other than the payee. The cheques have to be deposited into the payee's bank account.
, the author of the cheque is called ‘drawer’, the person in whose favour, the cheque is drawn is called ‘payee’, and the bank who is directed to pay the amount is known as ‘drawee’.

The payee has to sent the notice to the drawer with 30 days from the date of receiving “Cheque Return Memo” from the bank. The notice should mention that the cheque amount has to be paid to the payee within 15 days from the date of receipt of the notice by the drawer. If the cheque issuer fails to make a fresh payment within 30 days of receiving the notice, the payee has the right to file a criminal complaint under Section 138 of the Negotiable Instruments Act.

Disposing cheque bounce cases is one the major issues Indian judiciary is facing since a very long time now.

The negotiable instruments act [NI] was made to make this process quicker and easier. However if the case goes to court the judgement may take anywhere around 2 to 5 years to take effect.

If the accused regularly appears in court - then a 138 case will take 8 - 15 months to reach a decision. However this happens in 20% of the cases.
80% cases remain unsolved for more than 3 years due to absence of the accused, or many other reasons for delay. Summons, Warrants are issued and many cases get lonely prolonged.

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