138. Dishonour of cheque for insufficiency, etc., of funds in the account.—Where any cheque
drawn by a person on an account maintained by him 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 shall be deemed to have committed an
offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for
4
[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 shall apply unless—
(a) thecheque has been presented to the bank within a period of six months from the date on
which it is drawn 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 drawer of the cheque,
5
[within thirty days] of the receipt of information by him from the bank regarding the return of the
cheque as unpaid; and
(c) the drawer 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 of other liability” means a legally enforceable debt
or other liability.
139. Presumption in favour of holder.—It shall be presumed, unless the contrary is proved, that the
holder of a cheque received the cheque of the nature referred to in section138 for the discharge, in whole
or in part, of any debt or other liability.
140. Defence which may not be allowed in any prosecution under section 138.—Itshall not be a
defence in a prosecution for an offence under section 138 that the drawer had no reason to believe when
he issued the cheque that the cheque may be dishonoured on presentment for the reasons stated in that
section.
141. Offences by companies.—(1) If the person committing an offence under section 138 is a
company, every person who, at the time the offence was committed, was in charge of, and was
responsible to, the company for the conduct of the business of the company, as well as the company, shall
be deemed to be guilty of the offence and shall be liable to be proceeded against and punished
accordingly:
Provided that nothing contained in this sub-section shall render any person liable to punishment if he
proves that the offence was committed without his knowledge, or that he had exercised all due diligence
to prevent the commission of such offence:
6
[Provided further that where a person is nominated as a Director of a company by virtue of his
holding any office or employment in the Central Government or State Government or a financial
1. The words “or the State of Jammu and Kashmir” omitted by Act 62 of 1956, s. 2 and the Schedule.
2. Subs. by the A.O. 1948, A.O. 1950 and the Act 3 of 1951, s. 3 and the Schedule for “British India”.
3. Ins. by Act 66 of 1988, s, 4 (w.e.f. 1-4-1989).
4. Subs. by Act 55 of 2002, s. 7, for certain words (w.e.f. 6-2-2003).
5. Subs. by s. 7, ibid., for “within fifteen days” (w.e.f. 6-2-2003).
6. Ins. by s. 8, ibid. (w.e.f. 6-2-2003).
29
corporation owned or controlled by the Central Government or the State Government, as the case may be,
he shall not be liable for prosecution under this Chapter.]
(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been
committed by a company and it is proved that the offence has been committed with the consent or
connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other
officer of the company, such director, manager, secretary or other officer shall also be deemed to be
guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.—For the purposes of this section, —
(a) “company” means any body corporate and includes a firm or other association of
individuals; and
(b) “director”, in relation to a firm, means a partner in the firm.
142. Cognizance of offences.—1
[(1)] Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974),—
(a) no court shall take cognizance of any offence punishable under section 138 except upon a
complaint, in writing, made by the payee or, as the case may be, the holder in due course of the
cheque;
(b) such complaint is made within one month of the date on which the cause of action arises
under clause (c) of the proviso to section 138:
2
[Provided that the cognizance of a complaint may be taken by the Court after the prescribed period,
if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such
period;]
(c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class
shall try any offence punishable under section 138.].
3
[(2) The offence under section 138 shall be inquired into and tried only by a court within whose local
jurisdiction,—
(a) if the cheque is delivered for collection through an account, the branch of the bank where the
payee or holder in due course, as the case may be, maintains the account, is situated; or
(b) if the cheque is presented for payment by the payee or holder in due course, otherwise through
an account, the branch of the drawee bank where the drawer maintains the account, is situated.
Explanation.—For the purposes of clause (a), where a cheque is delivered for collection at any
branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been
delivered to the branch of the bank in which the payee or holder in due course, as the case may be,
maintains the account.]
4
[142A. Validation for transfer of pending cases.—(1) Notwithstanding anything contained in the
Code of Criminal Procedure, 1973 (2 of 1974) or any judgment, decree, order or direction of any court,
all cases transferred to the court having jurisdiction under sub-section (2) of section 142, as amended by
the Negotiable Instruments (Amendment) Ordinance, 2015 (Ord. 6 of 2015), shall be deemed to have
been transferred under this Act, as if that sub-section had been in force at all material times.
(2) Notwithstanding anything contained in sub-section (2) of section 142 or sub-section (1), where the
payee or the holder in due course, as the case may be, has filed a complaint against the drawer of a cheque
in the court having jurisdiction under sub-section (2) of section 142 or the case has been transferred to
that court under sub-section (1) and such complaint is pending in that court, all subsequent complaints
arising out of section 138 against the same drawer shall be filed before the same court irrespective of
1. Section 142 numbered as sub-section (1) thereof by Act 26 of 2015, s. 3 (w.e.f. 15-6-2015).
2. Ins. by Act 55 of 2002, s. 9 (w.e.f. 6-2-2003).
3. Ins. Act 26 of 2015, s. 3 (w.e.f. 15-6-2015).
4. Ins. by, s. 4, ibid. (w.e.f.15-6-2015).
30
whether those cheques were delivered for collection or presented for payment within the territorial
jurisdiction of that court.
(3) If, on the date of the commencement of the Negotiable Instruments (Amendment) Act, 2015 (26
of 2015), more than one prosecution filed by the same payee or holder in due course, as the case may be,
against the same drawer of cheques is pending before different courts, upon the said fact having been
brought to the notice of the court, such court shall transfer the case to the court having jurisdiction under
sub-section (2) of section 142, as amended by the Negotiable Instruments (Amendment) Ordinance, 2015
(Ord. 6 of 2015), before which the first case was filed and is pending, as if that sub-section had been in
force at all material times.]
1
[143. Power of Court to try cases summarily.—(1) Notwithstanding anything contained in the
Code of Criminal Procedure, 1973 (2 of 1974) all offences under this Chapter shall be tried by a Judicial
Magistrate of the first class or by a Metropolitan Magistrate and the provisions of sections 262 to 265
(both inclusive) of the said Code shall, as far as may be, apply to such trials:
Provided that in the case of any conviction in a summary trial under this section, it shall be lawful for
the Magistrate to pass a sentence of imprisonment for a term not exceeding one year and an amount of
fine exceeding five thousand rupees:
Provided further that when at the commencement of, or in the course of, a summary trial under this
section, it appears to the Magistrate that the nature of the case is such that a sentence of imprisonment for
a term exceeding one year may have to be passed or that it is, for any other reason, undesirable to try the
case summarily, the Magistrate shall after hearing the parties, record an order to that effect and
thereafter recall any witness who may have been examined and proceed to hear or rehear the case in the
manner provided by the said Code.
(2) The trial of a case under this section shall, so far as practicable, consistently with the interests of
justice, be continued from day to day until its conclusion, unless the Court finds the adjournment of the
trial beyond the following day to be necessary for reasons to be recorded in writing.
(3) Every trial under this section shall be conducted as expeditiously as possible and an endeavour
shall be made to conclude the trial within six months from the date of filing of the complaint.
2
[143A. Power to direct interim compensation.—(1) Notwithstanding anything contained in the
Code of Criminal Procedure, 1973, the Court trying an offence under section 138 may order the drawer of
the cheque to pay interim compensation to the complainant—
(a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the
complaint; and
(b) in any other case, upon framing of charge.
(2) The interim compensation under sub-section (1) shall not exceed twenty per cent. of the amount
of the cheque.
(3) The interim compensation shall be paid within sixty days from the date of the order under subsection (1), or within such further period not exceeding thirty days as may be directed by the Court on
sufficient cause being shown by the drawer of the cheque.
(4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the
drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve
Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of
the order, or within such further period not exceeding thirty days as may be directed by the Court on
sufficient cause being shown by the complainant.
1. Ins. by Act 55 of 2002, s. 10 (w.e.f. 6-2-2003).
2. Ins. by Act 20 of 2018, s. 2 (w.e.f. 1-9-2018).
31
(5) The interim compensation payable under this section may be recovered as if it were a fine under
section 421 of the Code of Criminal Procedure, 1973 (2 of 1974).
(6) The amount of fine imposed under section 138 or the amount of compensation awarded under
section 357 of the Code of Criminal Procedure, 1973 (2 of 1974), shall be reduced by the amount paid or
recovered as interim compensation under this section.]
144. Mode of service of summons.—(1) Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974) and for the purposes of this Chapter, a Magistrate issuing a
summons to an accused or a witness may direct a copy of summons to be served at the place where such
accused or witness ordinarily resides or carries on business or personally works for gain, by speed post or
by such courier services as are approved by a Court of Session.
(2) Where an acknowledgment purporting to be signed by the accused or the witness or an
endorsement purported to be made by any person authorised by the postal department or the courier services
that the accused or the witness refused to take delivery of summons has been received, the Court issuing
the summons may declare that the summons has been duly served.
145. Evidence on affidavit.—(1)Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974), the evidence of the complainant may be given by him on affidavit and may,
subject to all just exceptions be read in evidence in any enquiry, trial or other proceeding under the said
Code.
(2) The Court may, if it thinks fit, and shall, on the application of the prosecution or the accused,
summon and examine any person giving evidence on affidavit as to the facts contained therein.
146. Bank’s slip prima facie evidence of certain facts.—The Court shall, in respect of every
proceeding under this Chapter, on production of Bank's slip or memo having thereon the official mark
denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and
until such fact is disproved.
147. Offences to be compoundable.—Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974),every offence punishable under this Act shall be compoundable].
1
[148. Power of Appellate Court to order payment pending appeal against conviction.—(1)
Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), in an appeal by
the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit
such sum which shall be a minimum of twenty per cent. of the fine or compensation awarded by the trial
Court:
Provided that the amount payable under this sub-section shall be in addition to any interim
compensation paid by the appellant under section 143A.
(2) The amount referred to in sub-section (1) shall be deposited within sixty days from the date of the
order, or within such further period not exceeding thirty days as may be directed by the Court on
sufficient cause being shown by the appellant.
(3) The Appellate Court may direct the release of the amount deposited by the appellant to the
complainant at any time during the pendency of the appeal:
Provided that if the appellant is acquitted, the Court shall direct the complainant to repay to the
appellant the amount so released, with interest at the bank rate as published by the Reserve Bank of India,
prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or
within such further period not exceeding thirty days as may be directed by the Court on sufficient cause
being shown by the complainant.]
1. Ins. by Act 20 of 2018, s. 3 (w.e.f. 1-9-2018).
32
SCHEDULE.—[Enactments repealed].—Rep. by the Repealing and Amending Act, 1891
(12 of 1891), s. 2 and Schedule I.