What is the punishment for Section 138 of the negotiable instrument Act?

What happens after a Section 138 conviction?

Section 138 of the NI Act criminalizes the dishonor of cheques due to insufficient funds, prescribing imprisonment up to two years, fine up to twice the cheque amount, or both. Q2. Can offences under Section 138 be settled out of court? Yes.

Is there any chance of bail in 138 NI Act?

Yes, Section 138 offences are bailable and compoundable in nature. This process refers to the fact that the accused are easily granted bail while on the other hand, the complainant and the drawer may resolve or compound the case, of course, with the approval of the court.

What is the latest judgement on cheque bounce 138?

The Supreme Court has held that the dishonour of multiple cheques arising from the same underlying transaction can give rise to separate causes of action under Section 138 of the Negotiable Instruments Act, 1881, and that such prosecutions cannot be quashed at the threshold merely on the ground of multiplicity.A Bench ...

Can a settlement be reached in a 138 NI Act case?

Although Section 138 penalizes cheque bounce offenses, it also allows for settlement at various stages: Before Filing a Complaint: The payee can choose not to file a complaint after receiving the settlement amount.

What is the time limit for 138 case?

After the cheque is dishonored, the payee or holder must send a legal notice to the drawer within 30 days of receiving the information about the dishonor. This notice must demand payment of the dishonored amount. The drawer must fail to make the payment within 15 days of receiving the notice.

How to get bail in section 138?

Go to Court: Go to the Magistrate's Court on the date mentioned in the Summons. Request Bail: Your lawyer files a standard Regular Bail Application. Bond Order: The Magistrate orders you to sign a Personal Bond and provide a Surety Bond (a guarantee from another person) for a specific amount.

How to defend against section 138 of the Negotiable Instrument Act?

In this defence for accused in 138 ni act, which is one of the loopholes in cheque bounce case , the accused has to prove that the cheque was given as a security deposit and not for any discharge of debt or liability; hence, the case would not stand out under Section 138 of the Negotiable Instruments Act.

What are the defenses against a Section 138 case?

Defences Available to the Accused

One of the commonly invoked defences is the absence of a legally enforceable debt or liability at the time of issuance of the cheque. The accused may argue that the cheque was issued as a security, or that there was no subsisting debt, or that the debt was time-barred.

What is the new rule of cheque bounce case?

This law is called Section 138 of the Negotiable Instruments Act. It is simple. If someone gives you a cheque and it bounces because they have insufficient funds, you are able to sue them, and they can go to jail, pay a fine, or both.

What is the notice under section 138 of Negotiable Instrument Act?

It says that the notice (1) must be given by the payee or the holder in due course; (2) must be in writing; (3) must be given within thirty days of receipt of information of dishonour and (4) must make a demand for payment of the amount of the cheque dishonoured.

What is the maximum punishment under Section 138 of the NI Act?

Section 138 of the NI Act prescribes a maximum punishment of two years' imprisonment, a fine up to twice Signed By:RENUKA NEGI Signing Date:24.08.2025 07:44:16 Signature Not Verified Page 20 Crl.M.C. 3340/2023 Page 20 of 36 the cheque amount, or both, but does not specify the consequence of non-payment of fine.

Can you force a settlement?

The judge may transmit several offers and counteroffers, while also making their own recommendations. However, the judge cannot force the parties to agree to a settlement against their will. If they cannot reach an agreement, the case will continue toward trial.

How serious is a cheque bounce case?

Punishment For Cheque Bounce Case

Under Section 138 of the Negotiable Instruments Act, 1881, cheque bounce due to insufficient funds is a criminal offence. The punishment may include: Imprisonment for up to two years, A fine of up to twice the cheque amount, or.

How to win a cheque bounce case?

Defenses Available in Cheque Bounce Cases

1. No Legal Liability – The cheque was not issued for a legally enforceable debt.
2. Cheque Was Issued as a Security Deposit – If the cheque was issued as a security and not for payment, it may not attract liability under Section 138.

How much penalty for bounced cheque?

Penalty for Bounced Cheque

Less than AED 50,000: AED 2,000 fine. Between AED 50,000 and AED 100,000: AED 5,000 fine. Between AED 100,000 and AED 200,000: AED 10,000 fine.

What is legally enforceable debt under section 138?

EXISTENCE OF LEGALLY ENFORCEABLE DEBT:

For the commission of an offence under section 138, the cheque that is dishonoured must represent a legally enforceable debt not only on the day when it was drawn but also on the date of its maturity/presentation.

What is the remedy against conviction in 138 NI Act?

--(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent.

How many times can you ask for bail?

There is no specific number of times that you can petition for another Bail Hearing. However, your chances of a change in the Bail amount does not necessarily change.

Is 138 Negotiable Instrument Act bailable or non bailable?

Chishti. The Punjab & Haryana High Court has clarified that the right to bail of a convict under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), cannot be denied by the appellate court merely due to non-payment of 20% of the compensation amount as stipulated under Section 148 of the Act.