The timeline from dishonour to complaint
A cheque must be presented within three months of the date on it. Once it is returned unpaid, the payee has 30 days from the date of receiving information of the dishonour from the bank to send a written demand notice to the drawer. The drawer then has 15 days from receiving that notice to make the payment. Only if payment is not made within those 15 days does a cause of action for a criminal complaint arise, and the complaint must be filed in court within one month of that 15-day period expiring. Missing any one of these steps, particularly filing the notice late or filing the complaint too early, before the 15 days have run, is a common way these cases fail before they are even heard on merits.
The presumption in the payee’s favour
Section 139 of the Act presumes, once the drawer’s signature on the cheque is admitted, that the cheque was issued for a legally enforceable debt or liability. This shifts the practical burden onto the drawer to show, on a preponderance of probability rather than beyond reasonable doubt, that no such debt existed, that the cheque was given as security only and the underlying condition was not met, or that it was issued for some other purpose entirely, such as a blank cheque obtained and misused. A bare denial rarely succeeds; the drawer generally needs some documentary or circumstantial basis for the defence.
Where the complaint is filed
Section 142(2) fixes jurisdiction at the place where the payee’s bank branch is situated, that is, the branch where the cheque was presented for collection or, if presented through an account, the branch of that account. This resolved years of uncertainty where drawers and payees were in different cities and complaints were filed in whichever location suited the payee. Getting the branch right at the outset avoids an early jurisdictional challenge that can otherwise stall a complaint for months.
Interim compensation and the appeal deposit
Section 143A allows the trial court to direct the accused to pay interim compensation of up to 20 per cent of the cheque amount during the trial itself, before any finding of guilt, which is meant to ease the burden on payees facing a long trial. If the drawer is convicted and appeals, Section 148 requires the appellate court to direct a minimum deposit, again generally up to 20 per cent of the amount awarded by the trial court, before the sentence is suspended pending appeal. Both provisions were introduced to reduce the incentive to use appeals and trial delay as a substitute for payment.
