Cheque Bounce (S.138 NI Act)Delhi courts
Cheque Bounce Case by a Company in Delhi
Manuja Law Partners files cheque bounce complaints for companies, LLPs and firms in Delhi, through an authorised representative, from the demand notice to trial and appeal, including portfolios of dishonoured cheques from many customers.
In short
A company files a cheque bounce complaint under Section 138 of the Negotiable Instruments Act, 1881 in its own name as the payee, acting through an employee or officer authorised by a board resolution or power of attorney, who signs the complaint and gives evidence for it. The authorised person must have, or acquire from the records, knowledge of the transaction, and the complaint should say so. The usual statutory steps still apply: a written demand notice within 30 days of learning of the dishonour, 15 days for the drawer to pay, and a complaint within one month after that, filed in the court where the company's bank branch that received the cheque for collection is situated.
Why company complaints need extra care
The offence under Section 138 is the same whoever the payee is, but a company as complainant adds a layer: it cannot speak for itself. Every step, from signing the complaint to giving evidence and agreeing a settlement, is taken by a human representative, and the defence regularly tests whether that person was properly authorised and knew the facts. A complaint that is sound on the cheque can still lose months to arguments about authority.
The authority documents
Before the first complaint is filed we put in place:
- a board resolution (or, for an LLP or firm, the partners’ authority) naming the officer or officers authorised to sign complaints, depose, appoint advocates, compound and withdraw, and to delegate where needed;
- a power of attorney in favour of the named officer, consistent with the resolution;
- a short statement of the officer’s role, for example that they manage the customer accounts or receivables, so that the complaint can plead their knowledge as the A.C. Narayanan judgment requires.
Where a company files many complaints over time, a standing resolution with a list of authorised officers, refreshed when staff change, avoids repeating this for every case.
The statutory timetable
The deadlines are strict and run per cheque:
- The cheque must be presented within its validity, which is three months from its date.
- A written demand notice must be sent within 30 days of the company receiving the bank’s return memo. Our note on the 30-day notice and the 15-day window explains the counting.
- The drawer has 15 days from receiving the notice to pay.
- The complaint must be filed within one month after those 15 days end. A late complaint needs an application to condone the delay.
For a business holding dozens of returned cheques, we build a schedule of these dates for each cheque at intake.
Filing and trial
The complaint goes to the court with jurisdiction over the company’s collecting bank branch. It is supported by the authorised officer’s affidavit, which under Section 145 of the Act can serve as evidence, the original cheque, the return memo, the notice and proof of its delivery, and the authority documents. After summons, the accused appears and the trial proceeds summarily under Section 143. The complainant company can apply for interim compensation of up to 20 percent once the accused pleads not guilty.
If the accused is convicted and appeals, the appellate court can require a deposit of at least 20 percent of the fine or compensation under Section 148. That deposit, and the interim compensation earlier, often bring a settlement under Section 147; see our note on compounding a cheque bounce case.
Defences a company complainant should expect
Section 139 of the Act presumes that a cheque was given for the discharge of a debt or liability, and the Supreme Court in Rangappa v. Sri Mohan (2010) held that the presumption covers the existence of a legally enforceable debt. The accused can rebut it on a preponderance of probabilities, and the company must be ready to answer the usual lines of defence:
- “It was only a security cheque.” In Sripati Singh v. State of Jharkhand (2021) the Supreme Court held that a cheque given as security can found a complaint if the debt had become due when it was presented. The company’s ledger and the agreement showing the amount due are the answer.
- “The amount was not owed.” Statements of account, delivery records and the customer’s own confirmations of balance show the debt.
- “The notice never reached me.” A notice sent by registered post to the correct address is generally treated as served, but tracking reports and copies by email help.
- “The officer had no authority.” The authority documents described above close this off.
Civil recovery alongside
A criminal complaint does not itself produce a money decree for the full debt with interest. For larger sums, a company should consider a summary or commercial suit in parallel. Where the complainant is a bank or financial institution and the debt is ten lakh rupees or more, recovery lies before the Debt Recovery Tribunal instead of a civil court. Our commercial disputes team runs the civil side, and our corporate practice handles the authority documents and board processes.
Speaking to us
Send the cheque, the bank return memo, the underlying invoice or agreement and the company’s current authorisations. We tell you at the first meeting where to file, what the timetable is for each cheque, and whether a civil claim should run alongside. Call or WhatsApp 99115 44811, or email manujalawyers@gmail.com.
A cheque bounce matter in Delhi?
Tell us what has happened. We will confirm the court, the deadlines already running and the next step.
Why instruct this chamber
Acting for you in Delhi
Authority documents done right
Many company complaints run into trouble over who signed and on what authority. We draft the board resolution and power of attorney so that they cover filing, evidence, compounding and substitution of the representative.
Built for volume
Lenders, distributors and service businesses often hold dishonoured cheques from many customers. We set up a tracker of each cheque's notice, payment and filing dates so that no limitation date is missed.
Recovery-minded
A complaint is a pressure point, not the only remedy. We advise when to run a civil suit or a settlement alongside it, and when interim compensation is worth pressing for.
Honest timelines
Cheque bounce trials can take a long time. We give realistic ranges and do not promise a conviction or a recovery by any date.
Common questions
Cheque Bounce questions — Delhi
Who is the complainant when a company files a cheque bounce case?
The company itself, because it is the payee. A company can act only through people, so an employee or officer represents it. In National Small Industries Corporation v. State (NCT of Delhi) (2009) the Supreme Court confirmed that the company is the complainant and the employee its representative.
Does the company's representative need personal knowledge of the transaction?
Yes, in a meaningful sense. In A.C. Narayanan v. State of Maharashtra (2014) a three-judge bench held that a power-of-attorney holder can file the complaint and depose, but must have witnessed the transaction or have due knowledge of it, and the complaint should state that. An accounts or recovery officer who handled the customer's account is usually the right person.
What if the authorised officer leaves the company during the case?
The company can substitute another authorised representative. The Supreme Court in MMTC v. Medchl Chemicals and Pharma (2002) held that a defect in the authority of the person who filed can be cured later. The new representative should be authorised by a fresh resolution and familiarised with the record.
Where should a company file its cheque bounce complaint?
In the court within whose jurisdiction the company's bank branch, where it presented the cheque for collection and holds its account, is situated. Section 142(2) of the Negotiable Instruments Act, as amended in 2015, says so. For a company banking in Delhi, the complaint goes to the court for that branch's area.
Can several dishonoured cheques of one customer be filed together?
Often yes, if they relate to the same transaction and the notices and dates line up. Each cheque must still meet the notice and limitation requirements on its own. Where cheques fall in different periods, separate complaints are safer.
What is interim compensation under Section 143A?
An order directing the accused to pay up to 20 percent of the cheque amount to the complainant while the trial is pending. It can be made if the accused pleads not guilty in a summary trial or summons case. In Rakesh Ranjan Shrivastava v. State of Jharkhand (2024) the Supreme Court held that the power is discretionary, so the application should explain why it is justified.
Does the company's demand notice have to be signed by a director?
No. The notice can be sent by the company through its authorised officer or its advocate. What matters is that it demands the cheque amount, reaches the drawer and is sent within 30 days of the company learning of the dishonour.
Can a company recover interest and costs through a cheque bounce case?
Indirectly. On conviction the court can impose a fine of up to twice the cheque amount and direct compensation from it, which often covers interest and costs. Interest at the contractual rate is better pursued in a civil recovery.
Can a company settle a cheque bounce case after filing?
Yes; the offence is compoundable under Section 147 of the Act at any stage. The authority given to the company's representative should expressly cover compounding, so that a settlement can be recorded without a fresh resolution.
What if the cheque was given by a company and not an individual?
Then the drawer company is the accused, and its directors or officers can be added only if they were in charge of and responsible for its business when the offence was committed, under Section 141. The complaint must say how each person named was responsible. Naming every director without those averments invites quashing.
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- Telephone99115 44811
- Emailmanujalawyers@gmail.com
- ChamberChamber S-307, 3rd Floor, Delhi High Court, Pragati Vihar, New Delhi – 110003
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