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Bounced Cheque
Bounced Cheque? Here’s What Section 138 Says About Jail, Penalties
Cheques continue to be a widely used payment mode in India, but a bounce can have serious consequences. A dishonoured cheque is not just a financial issue—it can lead to legal action, including criminal proceedings.
Even a single instance of insufficient balance may result in legal notices, court appearances and, in extreme cases, imprisonment.
Under Section 138 of the Negotiable Instruments Act, 1881, cheque bounce is treated as a criminal offence in specific situations, including:
The law ensures reliability in cheque-based transactions and protects the recipient.
Section 138 primarily acts as a debt recovery mechanism, but its impact can be significant:
While imprisonment is possible, the larger impact lies in financial liability, legal proceedings and reputational damage. Responsible cheque usage and timely action are key to avoiding escalation.
Source: News18
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