Proceedings Under Section 138, Negotiable Instruments Act, 1881
Stage1: Filing Of The Complaint
A complaint under Section 138 NI Act is filed by the payee/holder in due course before the JMFC/MM within 30 days of the cause of action, which arises after expiry of 15 days from receipt of the notice by the drawer.
Latest Landmark Judgement:-
Supreme Court in Sumit Bansal v. MGI Developers & Promoters, 2026 SCC OnLine SC 49, decided on 08-01-2026, held that the mere multiplicity of complaints under S. 138 NI Act does not constitute abuse of process when statutory requirements are fulfilled.
In the case at hand, cheques were dishonoured, statutory notices were served, and summons were issued.
The Court, hence, held that “the complaint prima facie stands ****hence confirms we can File Multiple Complaints under S. 138 NI Act for the Same Transaction
Key Highlights Of Judgement
- Multiplicity of complaints under Section 138 NI Act is not abuse of process.
- Statutory compliance remains the key determining factor.
- Dishonour of cheques, service of notice, and issuance of summons validate proceedings.
- Multiple complaints for the same transaction are permissible under law.
Stage2: Verification Of The Complaint
Under Section 200 CrPC, the Magistrate examines the complainant on oath, records the statement, and if satisfied that there is sufficient ground to proceed, registers the complaint.
Quick Overview Of Stages
| Stage | Description |
|---|---|
| Stage1 | Filing of complaint within prescribed limitation period |
| Stage2 | Verification of complaint by Magistrate under Section 200 CrPC |
Latest Landmark Judgement: Cheque Bounce Cases Under NI Act
Supreme Court in Sanjabij Tari V. Kishore S. Borcar & Anr 2025 INSC 1158, ruled that in cheque bounce cases under Section 138 of the Negotiable Instruments Act, the accused does not need to be heard at the pre-cognizance stage. The Hon’ble Court clarified that since the Negotiable Instruments Act is a special law, there is no requirement for a Magistrate to issue a summons to the accused before taking cognizance under Section 223 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), as this will help reduce unnecessary delays in initiating proceedings.
Stage 3: Issuance Of Summons
Under Section 204 CrPC, the court issues summons to the accused directing appearance on a specified date, to be served personally or by registered post, with a bailable warrant possible if evaded.
Latest Landmark Judgement: Strict Statutory Compliance
Supreme Court in Kaveri Plastics v. Mahdoom Bawa Bahrudeen Noorul, (2025) 259 Comp Cas 658 reaffirmed that strict compliance with the statutory wording of Section 138 of the NI Act is mandatory, stating that where the cheque amount and the demand made in the notice do not perfectly align, the notice cannot be considered valid, proceedings are grounded on precise statutory adherence any deviation, however small, could nullify the prosecution
Guidelines For Service Of Summons In Section 138 NI Act Cases
Supreme Court in the Sanjabij Tari V. Kishore S. Borcar & Anr 2025 INSC 1158, issued several directions/guidelines pointing out the service of summons on the accused in a complaint filed under Section 138 of the NI Act, as follows:-
- In all Section 138 NI Act cases, summons must be served not only by the usual modes but also through dasti (personal service by the complainant).
- Trial Courts must also serve summons electronically (via email, mobile, or WhatsApp/messaging apps) where permitted under the BNSS and High Court rules.
- At filing, the complainant must provide verified contact details (email, mobile, messagingapp) of the accused by affidavit.
- Complainant must file an affidavit of service; if false, the Court may take action against the complainant.
- Each District Court must set up online payment facilities (QR/UPI links) for immediate settlement of chequebounce cases.
- Summons must mention that the accused may pay the cheque amount online at the threshold through the Court’s link.
- On such payment, the Court may order release of funds and compounding/closure under Section 147 NI Act and/or Section 255 CrPC/278 BNSS.
- Every Section 138 complaint must contain a prescribed synopsis placed immediately after the index and before the formal complaint.
Summary Of Key Guidelines
| Aspect | Requirement |
|---|---|
| Mode Of Service | Physical + Dasti + Electronic Modes |
| Contact Details | Mandatory Verified Details By Affidavit |
| Affidavit Of Service | Compulsory; False Filing May Attract Action |
| Online Payment | QR/UPI Facility For Quick Settlement |
| Closure Of Case | Possible Upon Payment Under Relevant Sections |
| Synopsis Requirement | Mandatory In Every Complaint |
Stage 4: Appearance Of The Accused
Under Section 251 CrPC, the accused appears before the court, and the Magistrate reads and explains the substance of the accusation to them.
Latest Landmark Judgement
Supreme Court in Meenakshi v. State of Haryana, 2026 SCC OnLine SC 94, while considering an appeal concerning suspension of sentence under Section 138 of the NI Act, held that once a sentence is suspended and bail is granted, the appellate or revisional Court cannot insist on the personal appearance of the accused on every date of hearing. The Court observed that cancellation of bail and issuance of a Non-Bailable Warrant solely for non-appearance, without justifiable reasons, is unwarranted
Stage 5: Recording Of Plea
Under Section 252 CrPC, the accused pleads guilty or claims to be tried, and if pleading guilty, the court may convict, the case proceeds to trial.
Latest Landmark Judgement
Supreme Court in Re: Expeditious Trial of Cases Under Section 138 of N.I. Act 1881 (2021), held that under Section 202 Cr.P.C., inquiries for summoning accused residing outside the court’s jurisdiction can be done using evidence on affidavit, and magistrates should limit inquiries to documents rather than witness examinations
Stage 6: Pretrial Stage
Under Section 436 CrPC, the court may grant bail on furnishing a bond, and parties may file procedural applications for summoning documents or witnesses in the pretrial stage.
Latest Landmark Judgement
Supreme Court in M/S Sri Om Sales vs Abhay Kumar @ Abhay Patel 2025, held that at the pre-trial stage, the Court is only required to examine whether the material placed on record makes out a prima facie case. It cannot carry out a detailed inquiry into the nature of debt or liability. Further, the Court stated that the Patna High Court exceeded its jurisdiction under Section 482 by conducting an inquiry at the pre-trial stage. ***held that a cheque bounce case under Section 138 of the Negotiable Instruments Act, 1881, cannot be quashed at the pre-trial stage by carrying out an enquiry on the disputed question of fact.
Stage 7: Evidence Of The Complainant
- Bounced cheque
- Dishonour memo
- Notice
- Proof of debt
Under Sections 137 and 138 IEA and Section 242(3) CrPC, the complainant presents evidence (bounced cheque, dishonour memo, notice, proof of debt) and is crossexamined by the accused.
Latest Landmark Judgement
Supreme Court in Tedhi Singh vs Narayan Dass Mahant, 2022, held that the complainant is not expected to initially give evidence of financial capacity unless the accused disputes it in reply notice
Stage 8: Evidence Of The Accused
- Documents
- Witnesses
Under Section 315 CrPC, the accused, as a competent witness, presents defence evidence (documents and witnesses), who are then crossexamined by the complainant under Sections 137 and 138 IEA.
Latest Landmark Judgement
Supreme Court in Raj Reddy Kallem v. State of Haryana & Anr. 2024, held that courts can, under Article 142, close cases where the debt is cleared, even if the complainant does not formally consent to compounding.
Stage 9: Arguments
| Provision | Details |
|---|---|
| Section 314 CrPC | Both parties present oral arguments and may file written arguments/memorandum before the court. |
Latest Landmark Judgement
Ashok Singh versus State of Uttar Pradesh & Anr (2025)
Supreme Court in ASHOK SINGH versus STATE OF UTTAR PRADESH & ANR 2025 re-establishes that the initial burden in a cheque dishonour case lies on the accused to rebut the statutory presumption, not on the complainant to prove their financial capacity from day one.
Stage 10: Judgment
Under Section 353 CrPC, the court pronounces judgment after hearing arguments and considering evidence, convicting the accused with fine or imprisonment up to 2 years or both under Section 138 NI Act, or acquitting if not guilty.
| Provision | Description |
|---|---|
| Section 353 CrPC | Pronouncement of judgment after hearing arguments |
| Section 138 NI Act | Punishment includes fine or imprisonment up to 2 years or both |
Latest Landmark Judgement
Sumeti Vij vs Paramount Tech Fab Industries (2021)
Sumeti Vij vs Paramount Tech Fab Industries (2021) (1) TVT 445 SC, Hon’ble Supreme Court ruled that when someone presents a cheque issued by another person for consideration, a presumption of consideration applies under section 138 of the Negotiable Instrument Act, 1881. Accordingly, the prosecution must prove that a cheque was dishonored, showing an unpaid debt cleared by cheque payment.
- Presumption of consideration applies
- Cheque must be proven dishonored
- Existence of legally enforceable debt is required
Stage 11: Post Judgment Proceedings
Under Section 374 CrPC, either party may file an appeal against the judgment in the Sessions Court/High Court within the prescribed period, where the appellate court may confirm, reverse, or modify the judgment.
| Section | Provision | Outcome |
|---|---|---|
| Section 374 CrPC | Right to appeal | Confirm / Reverse / Modify judgment |
Latest Landmark Judgement
M/s. Celestium Financial vs. A. Gnanasekaran (2025 INSC 804)
Supreme Court in M/s. Celestium Financial vs. A. Gnanasekaran (2025 INSC 804) held that a complainant in a Section 138 Negotiable Instruments Act (cheque bounce) case is a “victim” under Section 2(wa) CrPC. Consequently, the complainant can file an appeal against an acquittal under the proviso to Section 372 CrPC, without needing special leave under Section 378(4).
- Complainant recognized as “victim”
- Right to appeal against acquittal
- No need for special leave under Section 378(4)
Latest Landmark Judgement
S. Oberoi Buildtech Pvt. Ltd. & Ors. v. MSN Woodtech (2025)
Supreme Court in S. Oberoi Buildtech Pvt. Ltd. & Ors. v. MSN Woodtech (2025), held that the 30-day limitation period for filing a cheque bounce complaint under Section 138 of the Negotiable Instruments Act is mandatory. A complaint filed after this period, without a written application for condonation of delay under Section 142(b), is not maintainable, hence quashing the complaint setting aside the lower court orders.
- 30-day limitation period is mandatory
- Delay requires condonation under Section 142(b)
- Non-compliance leads to dismissal of complaint
