Dishonour of cheques due to insufficient funds is a cognizable economic offense under Section 138 of the Negotiable Instruments Act, 1881. Strict statutory timelines must be adhered to for successful prosecution.
Crucial Timelines
- Bank Return: Present the cheque within validity (3 months).
- Statutory Demand Notice: Must be dispatched within 30 days of dishonour memo.
- 15-Day Payment Window: The drawer is afforded 15 days from notice receipt to clear dues.
- Complaint Filing: Complaint must be filed before the Magistrate within 30 days of the expiration of the 15-day period.
Under Section 143A, the trial court can order the drawer to pay interim compensation up to 20% of the cheque amount, offering immediate cash-flow relief to the complainant.