Cheque Bounce (NI Act Section 138): The Process After 2025 Reforms

Here is a general overview of cheque bounce (ni act section 138) under Indian law.

How a cheque bounce complaint proceeds after the Supreme Court's September 2025 ruling on summons, payment, and compounding costs.

The legal position

In Sanjabij Tari v Kishore S. Borcar (25 Sep 2025, effective 1 Nov 2025), the Supreme Court directed that summons in cheque bounce cases be served by the complainant both by hand (dasti) and electronically (email or WhatsApp, as state rules permit), with the complainant disclosing the accused's contact details on affidavit.

The same ruling directed district courts to set up QR/UPI payment links so an accused can make early payment conveniently, and expressed a preference for summary trial with a mandatory complaint synopsis.

New compounding costs replace the earlier 10/15/20% scale: nil before defence evidence is led; 5% after defence evidence but before judgment; 7.5% at the Sessions Court or High Court on appeal or revision; 10% at the Supreme Court.

Delhi has implemented this through Practice Direction 157 (6 Nov 2025) and separate Delhi BNSS (Service of Summons and Warrants) Rules 2025 that allow electronic service of court process more generally.

How this generally works

The usual sequence looks like this.

Statutory notice

Before filing a complaint, the payee must send a written notice demanding payment within 30 days of being informed the cheque was dishonoured.

Filing the complaint

If payment is not made within 15 days of the notice, a complaint under NI Act s.138 can be filed within one month.

Summons and early resolution

Following the 2025 reforms, summons are served both by hand and electronically, and courts now provide QR/UPI links to make early payment straightforward.

Compounding

Settling at an early stage attracts no compounding cost; costs rise at later stages (5% after defence evidence, 7.5% on appeal, 10% at the Supreme Court).

Documents generally involved

• The dishonoured cheque
• Bank's cheque return memo
• Copy of the statutory demand notice and proof of dispatch
• Underlying agreement or invoice, if any

Common pitfalls

There are a few traps worth watching for.

• Missing the 30-day window to send the statutory notice after learning of dishonour.
• Filing the complaint before the 15-day payment window after the notice has expired.
• Assuming settlement is free at any stage — compounding costs apply once defence evidence has been led.

For related reading, see Recovering Money Owed to You: The Limitation Period and Your Options and Recovering Delayed Payments as an MSME.

If this touches a situation you are dealing with, you are welcome to discuss it in a consultation.

This page is general information about the law in India and is not legal advice. The position can vary with the facts, so it is worth getting advice on your specific situation.