Section 138 NI Act Cheque Dishonour Case in Bangladesh 2026: Notice, Bail & 50% Appeal Deposit Guide

Section 138 of the Negotiable Instruments Act 1881 was legislated to enhance the credibility of banking transactions and commercial paper. Under this statute, dishonour of a cheque issued in discharge of any legally enforceable debt or liability constitutes a criminal offence punishable by imprisonment for up to 1 year, or a fine up to thrice the amount of the cheque, or both.

Unlike ordinary civil money suits (which often drag on for 5 to 10 years), Section 138 creates swift penal liability, making criminal summons and arrest warrants directly enforceable by trial magistrates.

Courts interpret the limitation periods under Section 138 strictly. The chronology of action is as follows:

• Window 1 (Bank Presentation): The cheque must be presented to the drawee bank within 6 months of its issuance or within the period of its validity, whichever is earlier.
• Window 2 (Statutory Demand Notice): The payee must dispatch a written legal notice to the drawer within 30 days of receiving the bank's return memo.
• Window 3 (Complaint Filing): If the drawer fails to make the payment within 30 days of receiving the demand notice, the payee must file the C.R. Case within the next 30 days.

The legal notice must be drafted with precision. It must state the cheque number, bank account details, date of issue, transaction underlying the debt, date of bank dishonour, and specific reason stated in the return memo.

Modes of Service:

• Registered Post with A/D: Sending the notice via registered post with acknowledgment due (A/D) to the drawer's official business address and permanent address.
• Daily Newspaper Publication: If the drawer evades personal service, publishing the notice in a widely circulated national Bengali daily newspaper satisfies statutory requirements under Section 138(1)(b).

If the debtor fails to clear the dues within 30 days of notice receipt, the complainant files a formal petition of complaint under Section 138 before the Chief Metropolitan Magistrate (CMM) in urban areas or the Chief Judicial Magistrate (CJM) in districts.

The Magistrate examines the complainant under Section 200 CrPC, reviews original documents (Original Cheque, Dishonour Memo, Postal Dispatch Receipt, and A/D card), and takes official cognizance, issuing summons against the accused.

Section 138 offences are categorized as bailable and compoundable. Upon receiving court summons or executing a warrant, the accused can surrender before the trial magistrate and obtain bail upon furnishing a bail bond with local sureties.

Because the offence is compoundable, the parties can compromise at any stage of the proceedings, and the court will record the amicable settlement and discharge the accused upon payment of the compromised sum.

The case is transferred to a Joint Sessions Judge Court for formal trial. The court frames charges under Section 241A CrPC. The complainant testifies as P.W. 1, introducing the original cheque and bank records as exhibits.

Upon conviction, the court sentences the drawer to prison (up to 12 months) and imposes a fine. Notably, the court directs that the fine recovered from the convict shall be paid over to the complainant as statutory compensation under Section 545 CrPC.

To curb dilatory appellate tactics by defaulting debtors, the legislature introduced Section 138A. If a convicted drawer intends to appeal the conviction order before the Sessions Judge Court, an upfront deposit of 50% of the awarded cheque amount into the government treasury is mandatory.

No Sessions Court can admit an appeal or suspend execution of a conviction sentence without the certified Treasury Chalan proving this 50% deposit.

Payees frequently debate whether to file under Section 138 NI Act or Section 420 (Cheating) of the Penal Code 1860:

• Section 138 NI Act: Faster trial; no need to prove dishonest intent at inception; mandatory 50% deposit on appeal; compensation paid directly to complainant.
• Section 420 Penal Code: Requires proof of fraudulent intent from the beginning; non-bailable; no 50% appeal deposit requirement; useful when statutory 30-day notice limitation for Section 138 has accidentally expired.

Yes. The Appellate Division of the Supreme Court has consistently held that security cheques issued against enforceable debts fall squarely within the scope of Section 138.

A legal notice must be issued within 30 days of the dishonour memo. If unpaid after 30 days, the case must be filed within the subsequent 30 days.

Yes, Section 138 NI Act offences are bailable upon furnishing a judicial bail bond before the magistrate court.