Cheque Bounce: Supreme Court's New 2025 Section 138 Guidelines

Your customer paid you with a cheque, the bank returned it for want of funds, and now you are bracing for years of court dates, adjournments and no money.

The Supreme Court has issued binding nationwide guidelines to make cheque bounce trials under Section 138 of the Negotiable Instruments Act faster and to cut the huge pendency of these cases. The guidelines come from Sanjabij Tari v. Kishore S. Borcar and Anr, 2025 INSC 1158, decided on 25 September 2025. Every High Court and District Court had to put them in place by 1 November 2025. In practice this means tighter timelines, evidence on affidavit, an early push to settle, and fewer needless adjournments.

Short on time? Jump to the numbered list below to see exactly what changes for you as a complainant.

Deadline that matters: The Court directed that all High Courts and District Courts implement these guidelines not later than 1 November 2025 (judgment paragraph 40). So the faster regime is already live across India.

If your cheque has bounced and you are filing, or already fighting, a Section 138 case, here is what the 2025 guidelines change in practical terms.

1. File a complete complaint. Bring all your documents with the complaint at the very start. Half-ready filings are what stall these cases for years.
2. The court asks the paying question early. At the outset the court will try to find out whether the accused is willing to pay. This is meant to settle genuine cases fast.
3. Fixed timelines for summons. There are now structured timelines for serving summons on the accused, so the case does not die waiting for service.
4. Fixed timelines for evidence. Recording of evidence follows a set schedule instead of drifting from date to date.
5. Evidence on affidavit. Evidence can be given on affidavit, which cuts down on repeated court appearances just to record routine testimony.
6. Settlement is encouraged early. The court will push for compounding (a legal settlement) at an early stage, and early settlement now costs you less (see the cost table below).
7. No easy adjournments. Courts are told to avoid unnecessary adjournments, the single biggest reason these cases drag.

The aim is simple: get you to your money or to a verdict in months, not years.

When both sides settle a Section 138 case, the court can compound it under Section 147 of the Negotiable Instruments Act. The 2025 judgment revised the earlier 2010 cost scale downward, so settling early is now cheaper. The cost is a percentage of the cheque amount and rises the longer you wait to settle.

The takeaway: the sooner you settle, the less you pay. Dragging your feet now has a clear price.

Section 138 of the Negotiable Instruments Act makes it a criminal offence when a cheque is dishonoured, that is, bounced, because there were not enough funds in the account, or because it crossed the amount arranged with the bank.

Punishment can be imprisonment of up to 2 years, or a fine of up to twice the cheque amount, or both.

But you cannot rush straight to court. The law sets two clocks you must respect first:

1. 30 days to send notice. After the bank returns the cheque, you must send the drawer a written demand notice within 30 days of getting the bank return memo.
2. 15 days for the drawer to pay. Once the notice is served, the drawer gets 15 days to pay. Only if the money does not come within those 15 days can you file a complaint.

Get either clock wrong and your case can be thrown out before it begins. Our detailed walkthrough on the cheque bounce notice and complaint process covers each step.

Separately, the law also allows interim compensation. Under Section 143A a court may, at its discretion, order the drawer to pay the complainant up to 20 percent of the cheque amount while the case is going on. Note: this is general background and the 2025 judgment did not change this provision.

Follow these steps in order. The 2025 guidelines reward complainants who come prepared.

1. Step 1: Confirm the bounce. Get the cheque return memo from your bank. It states why the cheque was dishonoured. Keep the original.
2. Step 2: Send the demand notice within 30 days. Send a written notice to the drawer demanding the cheque amount, within 30 days of the return memo. Send it by registered post and keep proof of dispatch and delivery.
3. Step 3: Wait 15 days. Give the drawer the 15 days the law requires to pay. Do not file before this window closes.
4. Step 4: Prepare a complete complaint. Draft your complaint and gather every document now: the cheque, the return memo, the notice, the postal receipts, and your ledger or agreement showing the debt. The new guidelines expect a complete filing at the start.
5. Step 5: File before the right court. File the complaint within 1 month of the date the cause of action arose, that is, after the 15-day pay window ends. Submit all documents together.
6. Step 6: Be ready to answer the paying question. Expect the court to ask early whether settlement is possible. Decide your minimum acceptable figure in advance.
7. Step 7: Give evidence on affidavit. Use the affidavit route the guidelines allow, so you do not have to appear repeatedly for routine evidence.

For a ready-to-use checklist of every form and document, see our guide on how to file a cheque bounce case. If you are on the receiving end, read the defences available to an accused in a cheque bounce case.

Yes. The guidelines are binding on all High Courts and District Courts and had to be in place by 1 November 2025. They govern how Section 138 trials are run, so a case already pending is heard under the faster timelines, the affidavit-evidence route and the early-settlement push.

That is the goal. The guidelines set timelines for summons and evidence, allow evidence on affidavit, and tell courts to avoid needless adjournments. Cases will not finish overnight, but the worst delays, like waiting endlessly for service or facing date after date, are squarely targeted.

The court can compound the case under Section 147. The 2025 judgment set a graded scale of 0, 5, 7.5 or 10 percent of the cheque amount, lower the earlier you settle. So a settlement at the first stage can cost nothing, while one at a late stage costs 10 percent.

Possibly. Under Section 143A a court may, at its discretion, order interim compensation of up to 20 percent of the cheque amount while the case runs. This is a general feature of the law and is separate from the 2025 guidelines. Ask your lawyer whether to seek it in your case.

A person convicted under Section 138 can be sentenced to imprisonment for up to 2 years, or a fine of up to twice the cheque amount, or both. In practice, courts often steer these cases toward a settlement that puts the cheque amount, and any compensation, back in your hands.

• Pull out the original cheque and the bank return memo and check the date on the memo.
• Count 30 days from the memo date. If you are inside that window, draft your demand notice today.
• Gather your supporting papers: the cheque, the memo, any agreement or invoice, and your ledger.
• If a notice already went out and 15 days have passed with no payment, prepare a complete complaint to file at once.
• Read how to file a cheque bounce case and keep The RTI Playbook handy for follow-up steps.

• Sanjabij Tari v. Kishore S. Borcar and Anr, 2025 INSC 1158, Supreme Court of India, decided 25 September 2025: https://indiankanoon.org/doc/198100584/
• Negotiable Instruments Act, 1881, Sections 138, 143A and 147 (bare Act).