Advisory on quashing cheque-bounce proceedings under Section 482 CrPC / Section 528 BNSS
Section 138 of the Negotiable Instruments Act 1881 criminalises the dishonour of a cheque for insufficiency of funds or where the amount exceeds the arrangement with the bank. The offence is compoundable, punishable with imprisonment up to two years or a fine up to twice the cheque amount, or both. The complainant must issue a demand notice within thirty days of receiving the bank’s return memo, and the payee must file the complaint within one month of the expiry of the fifteen-day notice period. Section 143A (inserted by the 2018 Amendment) empowers the court to direct interim compensation of up to 20% of the cheque amount at any stage. AMLEGALS represents both complainants and accused in Section 138 proceedings.
Vicarious liability under Section 141 extends to every person who was in charge of and responsible for the conduct of the company’s business at the time of the offence. Directors may be impleaded, and quashing under Section 482 CrPC (now Section 528 BNSS 2023) is available where the complaint fails to make specific averments of active involvement. Compounding at any stage before the final order can resolve the matter. AMLEGALS handles demand-notice drafting and response, complaint filing, bail applications, trial strategy, interim compensation, compounding negotiations, appeals and revision petitions.
Drafting statutory demand notices under Section 138 proviso (b) and advising payees or drawers on response strategy within the fifteen-day period.
Filing Section 138 complaints with the Metropolitan Magistrate or Judicial Magistrate, with supporting documentation and affidavit evidence.
Defending the accused in trial proceedings, filing quashing petitions under Section 482 CrPC / Section 528 BNSS, and challenging vicarious liability under Section 141.
Applying for or opposing interim compensation under Section 143A, including computation of the 20% ceiling.
Negotiating compounding settlements at pre-trial or trial stage and recording the terms before the court.
Filing appeals against conviction or acquittal before the Sessions Court, and revision petitions before the High Court.
Under Section 138 of the Negotiable Instruments Act, the drawer of a dishonoured cheque may be punished with imprisonment for a term up to two years, or a fine up to twice the amount of the cheque, or both.
The payee must issue a demand notice within thirty days of receiving the bank’s return memo. If the drawer fails to pay within fifteen days of receipt of the notice, the payee must file the complaint within one month of the expiry of that fifteen-day period.
Yes. Under Section 141, every person who was in charge of and responsible for the conduct of the company’s business at the time of the commission of the offence is deemed guilty. However, the complaint must contain specific averments of the director’s active role; general and omnibus allegations may be quashed under Section 482 CrPC / Section 528 BNSS.
Section 143A empowers the court to direct the drawer to pay interim compensation of up to 20% of the cheque amount to the complainant at any time during the trial. If the accused is acquitted, the interim compensation must be refunded with interest.
No. No engagement is treated as accepted until conflicts, scope and terms are confirmed in writing. An initial discussion is confidential and is used only to understand the matter and assess fit.
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