How Many Times A Cheque Can Be Bounced?


Over the span of business transactions or even regular transaction, it isn’t uncommon for a cheque being returned because of inadequate funds or other such explanation and being introduced again by the payee after at some point, on his own volition or in line with the payer, in desire that the payment would be processed. A Cheque can be presented any number of times in the bank within its validity period. If a cheque bounce occurs due to insufficient funds or signature mismatch, both the drawer and the payee are charged by their respective banks. However, a bounced cheque can be redeposited.

In SL Construction v. Alapati Srinivasa Rao, it was stated by the Hon’ble Supreme court that in the trial of the cheque bounce, it is not relevant that how many times has the cheque been presented or dishonoured meaning that there is no bar on how many times can the same cheque be presented within its validity period.


In India, the provisions governing with Dishonour of cheque are given in Section 138 – 142 of Negotiable Instruments Act, 1881. This chapter was added in 1988 and the intention behind the inclusion of such chapter was to improve trade through means of cheque and to safeguard the rights of the payee. Important thing to remember is that the validity of a cheque is 3 months from the date referred in the cheque. The cheque needs to be presented in the bank within those 3 months.

There are several reasons behind the dishonour of cheque however primary three reasons which make the dishonour a criminal offense are – insufficient balance in the account of the drawer, or the drawer doesn’t have the account in the given bank or had his account closed or that the payer has stopped the payment of the given cheque. Punishment for such offence is either imprisonment for 2 years or the defaulter would have to pay double the amount due to the payee. Though it is to be noted that all the instances of cheque dishonour cannot be the cause of legal action. These instances include wrong date on cheque, no signature of account holder, and such instances where the payee could verify the details of cheque while accepting.

Bank along with the original cheque sends a memo return mentioning the reason of the dishonour to the payee. Payee then has to mandatorily send a notice within 30 days demanding the payment and on the receipt of such notice the payer would have 15 days to process the original payment. If the payer fails to make the payment after 15 days, payee would have cause of action against the payer. The case of dishonour of cheque is filed under Section 138 of the Act and registered with either the Judicial magistrate of first class or the metropolitan magistrate.

For dishonour of one cheque there can be just a single offence and such offence is committed by the payer on his inability to process the payment within 15 days of the receipt of the notice served. When a notification for payment is given, a new cause of action won’t emerge if the cheque is introduced again and it is bounced.


In case of Vinay Devanna Nayak v. Ryot Sewa Sahakari Bank Ltd. the court observed that in a situation where after the case of cheque dishonour has been filed, if the defaulter is ready to process the payment, the payee has the right to accept the payment and withdraw the case. As mentioned earlier all these provisions relating the cheque bounce are for the purpose of processing of the payment towards payee by the defaulting party and not for penalising the defaulter. It means that the cheque bounce is a compoundable offence.

In MSR Leathers v. S. Palaniappan, it was observed that a case constructed on second or progressive dishonour of the cheque is allowed insofar as it fulfils the essentials specified in Section 138 of the Negotiable Instruments Act. In other words, you can introduce your cheque any number of times as you need during the validity of the cheque. After such introduction of cheque, if the cheque is again bounced, payee can send a Legal Notice to the drawer of the cheque within 30 days and if within the following 15 days after the receipt of such notice by the drawer of the cheque, the cheque sum isn’t made accessible to the payee, payee have next 30 days to take legal action as per the provisions of Section 138 of Negotiable Instruments Act, 1881.

Therefore, there is no bar on the filing of a case in the above situation on the off chance that you present the cheque again in the bank within its validity period, regardless of whether no case was filed on a past event of dishonour of one and the same cheque.

Be that as it may, this has not been the circumstance in the past. Preceding 2012, if an individual didn’t file a case within the specified period after the main notice for dishonour of cheque, he was not permitted to file a case on any further introduction and dishonour of the same cheque. This rule of law was set somewhere near the Supreme Court on account of Sadanandan Bhadran v. Madhavan Sunil Kumar which was later overruled in 2012 by the previously mentioned judgment of MSR Leathers.


To safeguard the rights of the payee the Negotiable Instruments (Amendments) Act, 2018 asks the drawer to pay interim compensation (not exceeding 20% of the original amount) to the payee within 60 days of the court order. Even the banks have introduced stricter penalties in case multiple cases of cheque dishonour by one individual. Many times, bad cheques are made unintentionally by individuals who merely are unaware that their bank balance. To prevent bouncing of cheques, some consumers use services provided by their banks like overdraft protection and such.

Now that we have clarified that a cheque can bounced any number of times within its validity period without arising criminal liability (on the instance of the payee), still, a bounced cheque may result in fines, limitations on writing other cheques, and impacts the credit score of the drawer. People can lessen the number of bounced cheques they write by monitoring their bank balances more wisely, using more efficient system of recording all transactions as soon as they occur, or can use other methods of payment such as mobile or online banking.

  1. Crl.A. No. 1761 of 2008 SC
  2. (2008) 2 SCC 305
  3. 2013) 1 SCC 177
  4. (1998) 6 SCC 514

This article is authored by Lakhay Adlakha, 2nd Year, BBA, LL.B(Hons), student of The Northcap University, Gurugram.

Also Read- Differences Between a Cheque and Demand Draft

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