Section 138-142 of negotiable instruments act talks about the dishonour of cheque.

A cheque is an acknowledged bill of exchange that is readily accepted in lieu of payment of money and it is negotiable. However, by the fall of moral standards, even these Negotiable Instruments like cheques issued, started losing their credibility by not being honoured on presentment.

Section 138. Dishonour of cheque for insufficiency, etc., of funds in the account.—Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless —

(a) the cheque has been presented to the bank within a period of six months* from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.

Explanation.—For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.

 Dishonour of cheque is one of the major yet most faced problem people suffer from. Be it a small businessman or be it someone from a high-end position of the corporate world. But people fail to realise that getting the deserved amount is not that tough if the cheque bounces, instead of calling them again and again, a formal procedure to litigate in such situation is very well present .

 According to section 143 all the complaints of this chapter in the act are to be tried by JM 1^st class or MM 1^st class and are to be worked under the summary case provisions of CrPC as decided in the case of Rajesh Agarwal v. State and Others along with certain guidelines for the same.

According to the legal provision if the person wants to file a complaint, he first has to send a notice to the defaulter party within one month of dishonour and after that the party at default has 15 days to return/ pay the amount. If the defaulter party fails to pay within 30 days then within a month the concerned party can file the complaint which should should be registered in a magistrate’s court within a month of the expiry of the notice period. It is essential in this case to consult an advocate who is well versed and experienced in this area of practice to proceed further in the matter.