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Sec 138 Cheat Sheet

The document outlines the legal framework for cheque dishonour under Section 138 of the Negotiable Instruments Act, detailing the nature of the offence, essential conditions for validity, and the timeline for legal actions. It specifies penalties, including imprisonment and fines, as well as provisions for interim compensation and the possibility of compounding the offence. Additionally, it addresses jurisdiction, corporate liability, and the process for appeals by convicts.

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amisha kadam
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21 views2 pages

Sec 138 Cheat Sheet

The document outlines the legal framework for cheque dishonour under Section 138 of the Negotiable Instruments Act, detailing the nature of the offence, essential conditions for validity, and the timeline for legal actions. It specifies penalties, including imprisonment and fines, as well as provisions for interim compensation and the possibility of compounding the offence. Additionally, it addresses jurisdiction, corporate liability, and the process for appeals by convicts.

Uploaded by

amisha kadam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Key Element Details Time Limit Legal

Provision /
Support
Nature of Bailable, non-cognizable, – Section 138 NI
Offence compoundable Act

Essential Cheque must be for a – Section 138(a)


Condition 1 legally enforceable debt
or liability

Essential Cheque must be Within 3 Section 138(b)


Condition 2 presented to the bank months of
date on
cheque
Bank Return Dishonour of cheque due Immediate Section 138(c)
Memo to insufficient funds/stop trigger
payment/account closed

Demand Written notice Within 30 Section 138(b)


Legal Notice demanding payment days from
date of return
memo
Grace Period Time given to drawer to 15 days from Section 138(c)
to Pay make payment after receipt of
notice notice

Filing If drawer fails to pay Within 30 Proviso to


Criminal within grace period days after Section 138
Complaint expiry of 15-
day period
Presumption That cheque was issued Automaticall Section 139 NI
in Favour of for legally enforceable y assumed Act
Payee debt unless
rebutted
Jurisdiction of Where the payee’s bank – 2015
Court is located Amendment to
NI Act
Punishment Imprisonment up to 2 – Section 138
years or fine up to double
the cheque amount or
both

Interim Up to 20% of cheque Within 60 Section 143A


Compensation amount payable by days of order NI Act
drawer during trial

Compounding Possible at any stage – Section 147 NI


of Offence including post-conviction Act & SC
Guidelines
Appeal by Accused may be required Within Section 148 NI
Convict to deposit min. 20% limitation Act (post-
fine/compensation to file prescribed in conviction
appeal CrPC stage)
Corporate Directors/Persons in – Section 141 NI
Liability charge can also be made Act
accused

Summary Fast-track procedure for Preferably Section 143 NI


Trial quick disposal within 6 Act
months

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