Section 138 NI Act Bangladesh – Penalties, Process & How to Win a Cheque Bounce Case

Section 138 of the Negotiable Instruments Act 1881 (as applicable in Bangladesh) creates a criminal offence for the dishonour of a cheque drawn on a bank account when the cheque is returned unpaid due to:

• Insufficient funds in the account
• Arrangement exceeding the amount arranged with the bank
• Account closed after the cheque was issued
• Payment stopped by the drawer (stop payment instruction)

The purpose of Section 138 is to protect the commercial reliability of cheques — to ensure that a cheque functions as a reliable payment instrument. If you have received a bounced cheque, contact a criminal lawyer in Dhaka to assess your case immediately.

Section 138 applies when ALL of the following conditions are met:

1. The cheque was issued in discharge of an existing debt or liability — not as a gift or security for a future obligation (though courts broadly interpret this)
2. The cheque was presented to the bank within its validity period (typically 6 months)
3. The cheque was returned unpaid due to insufficient funds or similar reason
4. The payee sent a written demand notice to the drawer within 30 days of receiving the dishonour intimation from the bank
5. The drawer failed to pay within 30 days of receiving the demand notice

All five conditions must be satisfied for the offence to be complete.

Before you can file a case in court, you MUST complete these steps in order:

1. Present the cheque to the bank and obtain the bank return memo (the official bank document confirming dishonour, stating the reason)
2. Send a legal demand notice to the cheque drawer within 30 days of receiving the bank return memo. The notice must:
   • Be in writing (preferably by registered post with acknowledgement due)
   • Specify the cheque number, date, amount, and bank dishonour reason
   • Demand payment of the full cheque amount within 30 days
   • State that failure to pay will result in criminal prosecution
3. If the drawer fails to pay within 30 days of receiving the notice, the offence is complete
4. File the complaint in court within 30 days of the expiry of the notice period

⚠️ Missing any of these deadlines (30 days for notice + 30 days for filing) can make your case inadmissible. Always engage a cheque bounce lawyer in Dhaka at the FIRST sign of dishonour to protect your timeframes.

Filing a cheque dishonour case in Bangladesh:

1. Draft the complaint petition with the help of a lawyer
2. Attach: original dishonoured cheque + bank return memo + copy of legal demand notice + proof of delivery (postal receipt/courier tracking)
3. File the complaint at the Chief Metropolitan Magistrate (CMM) court (for Dhaka Metropolitan) or Chief Judicial Magistrate (CJM) court (for other districts)
4. Pay the court fee (nominal) and obtain a case number
5. The court issues summons to the drawer (accused)
6. Hearing — prosecution presents evidence; defence cross-examines
7. Judgment — if convicted, the court imposes imprisonment, fine, or both

The penalties under Section 138 NI Act upon conviction are significant:

• Imprisonment: Up to 1 year (simple or rigorous)
• Fine: Up to 3 times the amount of the cheque
• Or BOTH imprisonment and fine

In practice, Bangladesh courts often impose fines equivalent to the cheque amount (with compensation to the victim) rather than imprisonment for first-time offenders with no prior record. However, repeat offenders or those who show no remorse can face imprisonment.

If you are the accused in a Section 138 case, here are the strongest legal defences:

• No existing debt or liability: The cheque was issued as security for a future obligation, not in payment of an existing debt
• Notice not properly served: The demand notice was not received, was sent to the wrong address, or was outside the 30-day window
• Case filed after limitation: The complaint was not filed within 30 days of the expiry of the notice period
• Cheque was stolen or forged: The cheque presented is not a genuine instrument drawn by the accused
• Payment was made: The accused paid after notice but before conviction, which typically leads to lesser punishment or settlement
• Cheque issued under duress: The accused was coerced into signing the cheque

Contact a criminal defence lawyer in Dhaka immediately upon receiving summons — early intervention is the most effective defence strategy.

Section 138 cases are compoundable — meaning the parties can settle the case out of court with the court's permission. In practice, many Section 138 cases settle when:

• The accused pays the full cheque amount plus agreed compensation
• The complainant files a withdrawal/compromise petition in court
• The court accepts the settlement and acquits the accused (ending the criminal record threat)

Settlement negotiations are common. Your lawyer can negotiate terms that are favorable — the complainant typically seeks the cheque amount plus interest and legal costs, while the accused seeks a full acquittal and no criminal record.

Realistic expectations for a Section 138 case in Bangladesh:

• Filing to first hearing: 1–4 weeks (summons service can take time)
• Total case duration (contested): 1–3 years in Magistrate Court
• Case duration (settled): 2–8 months if parties agree to compromise

Lawyer fees for a Section 138 case in Dhaka typically range from BDT 15,000–50,000 for straightforward cases, and higher for complex multi-cheque or high-value cases. Court fees are minimal.

No. In Bangladesh, the 30-day demand notice is a mandatory statutory requirement. If you miss it, the case is not maintainable. However, consult a lawyer — in some situations the timeline may be arguable if the exact date of receiving the dishonour memo is disputed.

This is one of the strongest defences. If the cheque was issued as security for a future debt or guarantee (not in payment of an existing liability), Section 138 may not apply. Courts examine the underlying transaction carefully.

Yes. Each dishonoured cheque is a separate offence and generates a separate case. Multiple cheque dishonour cases from the same transaction are filed and decided together or in sequence.

The complaint is typically filed in the court within whose jurisdiction the bank account was held, the cheque was presented, or the offence was committed. Your lawyer will advise on the correct jurisdictional court.

Initially, the accused is summoned (not arrested) — Section 138 is a summons case by default. However, if the accused fails to appear despite repeated summons, the court can issue a warrant of arrest.

If the settlement leads to an acquittal (the case is formally withdrawn with court permission), there is no criminal conviction and no criminal record. An out-of-court payment without formal court acquittal does not clear the pending case.