What to Do When a Cheque Bounce: Legal Remedies and Case Study from Kota Courts

When you receive a cheque as payment, your entire cash flow might be impeded if the cheque bounce. For small businesses, individuals, and even large firms, a bounced cheque means more than just embarrassment—it can delay salaries, stall projects, and disrupt relationships.

As an Advocate in Kota, Rajasthan, I, Prakhar Gupta of Arms Length Legal, have handled several cheque bounce cases. Over the years, I have learned that while the law offers both civil and criminal remedies, each comes with its own strengths and weaknesses. The key is to pursue both remedies strategically and in parallel to maximize recovery and deterrence.

What to Do When a Cheque Bounces

Here’s a quick guide for recipients of dishonoured cheques:

1. Collect the Bank Return Memo – Always obtain the written return memo from the bank stating the reason for dishonour.
2. Send a Legal Notice – Within 30 days of receiving the memo, send a demand notice to the drawer.
3. Wait for 15 Days – If the drawer pays within 15 days, the matter ends.
4. File a Criminal Complaint – If no payment is made, file under Section 138 NI Act within 1 month after the 15-day period.
5. File a Civil Summary Suit – At the same time, file a summary suit under Order XXXVII CPC for faster monetary recovery.

Section 138 NI Act: Criminal Remedy for Cheque Bounce

• Strict timelines: Notice in 30 days → 15-day payment window → Complaint within 1 month after expiry.
• Punishment: Up to 2 years imprisonment or fine up to twice the cheque amount.
• Interest: Courts can grant 18% interest per annum on the cheque amount.

Practical issue: Criminal cases often linger, as the legal system is skewed towards protecting the accused. In Kota, NI courts are overburdened, and long adjournments are common. Even with active pursuit, results are delayed.

Order XXXVII CPC: Civil Remedy

Unlike criminal cases, civil recovery under Order XXXVII CPC is a summary procedure designed to expedite monetary claims based on instruments like cheques.

• Court Fees: Must be deposited in proportion to the cheque amount.
• Timelines for Defendant:
• Must appear within 10 days of summons
• Must apply for leave to defend within another 10 days
• If he fails, the benefit automatically goes to the plaintiff.
• Ex Parte Decree: Unlike criminal cases (where attendance of accused is compulsory), civil courts can grant ex parte decrees if the defendant defaults.
• Execution of Decree: Once you have a decree, you can enforce it through execution proceedings, including attaching movable and immovable property.

Civil vs Criminal Remedies: A Practical Comparison

Aspect	Civil Remedy (Order XXXVII CPC)	Criminal Remedy (Section 138 NI Act)
Objective	Recovery of money	Punishment of drawer
Court Fees	Payable as per cheque amount	Nominal
Interest	18% per annum may be awarded	Fine up to 2x cheque amount
Timelines	Defendant must appear in 10 days, seek leave in 10 more	30 days for notice, 15 days to pay, complaint in 1 month
Speed	Faster – summary procedure	Slower – long adjournments common
Enforcement	Decree enforceable by attaching property	Jail/fine – doesn’t ensure recovery
Presence	Defendant can be proceeded ex parte	Accused must appear personally
Service of Summons	Multiple methods, incl. newspaper publication	Service often delayed – hurdle point
Advantage	Maneuverability, effective recovery	Strong deterrence, penal consequences

Personal Case Study: Cheque Bounce Litigation in Kota

As a practising cheque bounce advocate in Kota, I have often seen how one bounced cheque can completely throw a person’s finances off track. In one such matter, a local businessman came to me after a significant cheque he received was dishonoured due to insufficient funds. This amount was not just a figure on paper—it was money he needed urgently to keep his supply chain moving. The dishonour shook his confidence and put him in a difficult position.

We first took the criminal route under the Negotiable Instruments Act, which is usually the natural instinct because of the fear of punishment it creates for the drawer. But here is the reality from my experience in Kota: while the criminal complaint was filed on time and all steps were taken diligently, the process became painfully slow. Serving summons itself dragged on for months, and even after the accused appeared, long adjournments followed. The case was alive, yes, but my client still did not see a single rupee in hand for quite some time.

In parallel, we moved through the civil courts by filing a summary suit under Order XXXVII of the Civil Procedure Code. This turned out to be a game-changer. Unlike the criminal side, civil law works with tighter timelines for the defendant, and if he does not respond in time, the law tilts in favour of the complainant. In this particular matter, we were able to get a decree much faster, and the court even awarded interest on the cheque amount. Most importantly, we could enforce the decree by attaching the defendant’s assets, ensuring that my client finally recovered his money.

The lesson here is simple but crucial—criminal proceedings create pressure, but civil proceedings secure results. From my years in practice, I have learned that in Kota, where cheque bounce criminal cases can get caught in procedural delays, pursuing both remedies side by side gives clients the best chance at actual recovery. It is not about choosing one over the other—it is about balancing both for the strongest outcome.

Why Civil Proceedings Often Work Better in Kota

Based on my practice as a cheque bounce advocate in Kota, here are the practical realities:

• Negotiable Instrument Act cases are slow: Courts are overburdened, long adjournments are common, and serving summons is often the biggest hurdle.
• Civil suits under Order XXXVII are expedited: They carry strict deadlines for the defendant, can proceed ex parte, and allow for multiple methods of serving summons including newspaper publication.
• Execution is powerful: Civil decrees can be enforced by attaching property, which ensures actual recovery.

FAQs on Cheque Bounce Cases

Conclusion

From my professional experience as Advocate Prakhar Gupta, Cheque Bounce Advocate in Kota, I can say with certainty:

• Criminal cases under the Negotiable Instruments Act put pressure on the drawer but are slow.
• Civil cases under Order XXXVII of the Civil Procedure Code provide faster and more effective recovery with interest.
• The best approach is to file both in parallel—criminal for deterrence, civil for recovery.

I have seen clients recover entire amounts through civil proceedings while criminal cases continue to linger. If you face a cheque bounce in Kota, act fast, consult an experienced advocate, and don’t miss strict timelines.

The present article is for educational purposes alone, please take independent Legal advice from a professionals

For More Information, Contact Advocate Prakhar Gupta