Cheque bounced due to insufficient funds what next?

A bounced cheque due to insufficient funds is a criminal offence in India, and you have a clear legal remedy available. You must first send a formal legal notice to the cheque issuer within 30 days of receiving the bank's return memo, after which you can file a criminal complaint if payment is not made within 15 days of the notice being received.

Key Points

• The bank will give you a cheque return memo stating the reason — keep this carefully as it is essential evidence.
• You must send a legal demand notice to the drawer within 30 days of receiving the return memo.
• The drawer has 15 days from receipt of the notice to make the payment.
• If payment is not made, you can file a complaint in a Magistrate's court within 30 days of the expiry of that 15-day period.
• A conviction can result in imprisonment up to two years, a fine up to twice the cheque amount, or both.

Relevant Law

Section 138 of the Negotiable Instruments Act, 1881 governs cheque dishonour and makes it a punishable offence. Sections 141–143 cover related provisions including offences by companies and summary trial procedures. The case would be filed in the court having jurisdiction at the location where the cheque was presented — in your case, likely a Magistrate's court in Ranchi, Jharkhand.

What You Can Do

• Collect the original dishonoured cheque and the bank return memo immediately and do not delay, as strict time limits apply.
• Consult a lawyer in Ranchi to draft and send a proper legal demand notice via registered post with acknowledgement due.
• If the drawer does not pay within 15 days, instruct your lawyer to file a complaint under Section 138 before the concerned Judicial Magistrate in Ranchi.
• You may also explore a civil recovery suit alongside the criminal complaint to recover the cheque amount with interest.