By Advocate Md. Shah Alam · 2026-08-22 · 12 minutes
When a bank cheque is dishonoured due to insufficient funds, the payee is legally empowered to initiate criminal proceedings under <strong>Section 138 of the Negotiable Instruments Act 1881 (NI Act)</strong>. With penalties extending up to 1 year imprisonment and fines up to triple the cheque amount, understanding statutory timelines and bail provisions is crucial. Authored by <a href="/advocate-md-shah-alam" style="color:var(--gold);font-weight:bold;text-decoration:underline;">Advocate Md. Shah Alam</a>, Supreme Court Advocate. Call our chamber at <a href="tel:01712655546" style="color:var(--gold);font-weight:bold;">01712655546</a>.
Section 138 penalizes any person who draws a cheque on a bank account maintained by them for the discharge of debt or liability, and such cheque returns unpaid due to insufficiency of funds or exceeding agreed overdraft limits.
Yes, offences under Section 138 NI Act are bailable by law. Upon issuance of summons or arrest warrants, an accused represented by an advocate can surrender before the Sessions Judge / Joint Metropolitan Sessions Court and obtain regular bail upon furnishing bail bonds.
The legal procedure is time-barred by strict limitation rules: (1) Cheque must be deposited within 6 months of validity; (2) Legal notice served within 30 days of dishonour memo; (3) 30-day grace period for payment; (4) Formal petition filed within 30 days after expiration of grace period.
Under Section 138A of the NI Act, if a convicted debtor intends to appeal against a conviction judgment, they must deposit at least 50% of the awarded cheque sum with the trial court before the appeal is admitted.
Courts examine whether a legally enforceable debt existed when the cheque was issued. Undated security cheques retained after loan liquidation or signed blank cheques obtained under coercion can be successfully defended through documentary proof and bank statements.
While Section 420 of the Penal Code 1860 deals with general cheating and fraud, Section 138 NI Act is a specialized commercial recovery mechanism providing direct monetary compensation to the victim alongside penal deterrence.
For drafting statutory legal notices or representing cheque bounce litigation in Dhaka courts, contact Advocate Md. Shah Alam directly at 01712655546.