Negotiable Instruments Act, 1881 Section 138 - Bare Act

Where any cheque dr awn by a person on an account maintained by hi m 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 sh all be deemed to have committed an offence and sh all, without prejudice to any other provisions of this Act, be punished with imprisonment for¹[a term which may be extended 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 sh all apply unless--

(a) the cheque has been presented to the bank within a period of six months from the date on which it is dr awn 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 dr awer of the cheque,²[within thirty days] of the receipt of information by hi m from the bank regarding the return of the cheque as unpaid; and

(c) the dr awer 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" me ans a legally enforceable debt or other liability.]

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1 . Substituted b y Act 55 of 2002 , sec. 7 , for "a term which may be extended to one year" (w .e.f . 6 - 2 - 2003 ).

2 . Substituted b y Act 55 of 2002 , sec. 7 , for "within fifteen days" (w .e.f . 6 - 2 - 2003 ).