Section 138 Negotiable Instruments Act - Dishonour of Cheque
Curated legal overview - not official court text. Last updated August 2026.
Overview
Section 138 of the Negotiable Instruments Act, 1881 creates a criminal offence for dishonour of cheques for insufficiency of funds or similar reasons, subject to statutory notice and compliance requirements. Indian courts have developed extensive jurisprudence on territorial jurisdiction, compounding, and interim relief.
Common Questions
- Is cheque bounce a criminal offence in India?
- Yes. Section 138 NI Act makes dishonour of a cheque for insufficiency of funds (after statutory notice) a criminal offence punishable with fine and/or imprisonment.