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Bankers Study Material:N I Act:

Dishonour of Cheque

By: ,      Update:14 Oct 2010

Dishonour of Cheque 

Dishonour of cheque makes drawer of the cheque principal debtor to the holder and attracts criminal proceedings against drawer. It is defined under section 138 to 147 of N I Act 1881:


- Drawer liable u/s 138-147 (Wef 01.04.89) Where:

  1. Cheque issued to discharge a liability.
  2. Cheque presented within validity period (max 6 months)
  3. Dishonour for insufficiency of funds

- Producer: Notice to drawer by the holder within 30 days of receipt of information about dishonoured. Drawer to be given 15 days period(grom date of receipt) to make the payment.

- If payment not made by drawer, cause of action arises.

- Complaint in the court of judicial Magistrate 1st class or metropolitan magistrate.

- Imprisonment up to 2 Years and fine double the amount of cheque.

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