1. Collect the return memo from your bank
When the cheque bounces, the bank issues a return memo stating the reason (e.g., insufficient funds). Keep the original cheque and the memo safely — they are the foundation of the case.
2. Send a demand notice within 30 days
A written legal notice must go to the drawer within 30 days of the return memo, demanding payment within 15 days. Send by a mode with proof of delivery. This 30-day window is where most cases are lost.
3. Wait out the 15-day notice period
If the drawer pays within 15 days of receiving the notice, the matter closes. Accept payment through traceable means only.
4. File the complaint within the next month
If unpaid, a criminal complaint under Section 138 of the Negotiable Instruments Act must be filed before the Magistrate within one month after the 15-day period ends — generally where your bank branch (payee's bank) is located.
5. Know what the case can achieve
Section 138 is a criminal offence: courts can impose a fine up to twice the cheque amount and/or imprisonment, and typically direct compensation to you from it.
6. Consider a parallel civil recovery
For large amounts, a civil suit for recovery can run alongside — the criminal case pressures, the civil case secures the money. An expert can help you choose.