Cheque Dishonour

What this covers

Where a cheque is dishonoured for insufficient funds or a stopped payment, section 138 of the Negotiable Instruments Act 1881 provides a criminal remedy alongside the civil claim for the money. We handle both, for payees pursuing and for drawers defending.

The deadlines

This claim is governed by time limits that are unforgiving: the cheque must be presented within its validity, the demand notice must be served within the prescribed period of the dishonour, the drawer has a period in which to pay, and the case must be filed within the window that follows. Miss any of them and the section 138 remedy is lost, even on a perfectly good debt.

Defending a cheque case

Not every dishonoured cheque is an offence. Cheques given as security, blank cheques later filled in, cheques where the underlying debt does not exist, and defects in the notice are all real defences. We take them on the documents.

What we need

• The cheque and the bank’s dishonour memo, with dates
• The underlying transaction documents
• Any notice already sent and proof of its service
• Correspondence with the drawer since the dishonour

Where it is heard, and how long it takes

The section 138 case goes before the Magistrate, and the civil claim for the money can be pursued separately. The criminal case commonly runs several months to over a year. The deadlines at the start, however, are measured in days.