What counts as a "bounced" cheque
A cheque is treated as dishonoured when a bank returns it unpaid — most commonly for insufficient funds, but also for a signature mismatch, a stopped payment, or an account that's been closed. Under Section 138 of the Negotiable Instruments Act, 1881, this is a criminal offence, not just a civil debt, provided the cheque was issued to discharge a legally enforceable debt or liability.
The three deadlines that decide everything
The law gives both sides a fixed sequence of windows, and missing any of them can end the case regardless of the underlying facts. First, the payee must send a written demand notice to the drawer within 30 days of receiving the bank's return memo. Second, the drawer then has 15 days from receiving that notice to pay. Third, if payment still hasn't come, the payee must file a criminal complaint before the Judicial Magistrate within one month after that 15-day window closes.
Courts have some discretion to condone a delay in genuine cases, but it isn't guaranteed, so treating these as hard deadlines is the safer approach on either side of the dispute.
What happens after the complaint is filed
The Magistrate can summon the accused, who then has the chance to plead guilty, contest the case, or — very commonly — settle. A conviction can bring up to two years' imprisonment, a fine of up to twice the cheque amount, or both, and courts frequently order interim compensation of up to 20% of the cheque amount while the case is still pending. Because the offence is compoundable, the parties can settle at any stage, including after conviction, which is how a large share of these cases actually end.