Section 138: when cheque dishonour becomes an offence

Section 138 connects a returned cheque to a specific legal sequence. The drawer must have issued the cheque on an account maintained by that person for discharge, wholly or partly, of a legally enforceable debt or other liability. A return memo records dishonour; it does not by itself establish every ingredient of the offence. The amount owed, the reason for the cheque, the return information and the subsequent notice/payment events are distinct questions.

The proviso requires timely presentation, a written demand from the payee or holder in due course within 30 days of receiving the bank's dishonour information, and failure to pay within 15 days of receiving that notice. Section 142 then regulates the complaint. Keep the notice period separate from the payment opportunity and complaint limitation; a demand letter is not a court complaint. The notice guide explains the trigger for each period.

The printed punishment is imprisonment up to two years, or a fine up to twice the cheque amount, or both. These are statutory limits, not an automatic sentence or an assurance that the complainant will receive twice the cheque amount. The court must decide the case. Section 147 separately makes offences under the Act compoundable; settlement and its procedural effect should be considered within the actual proceeding.