Q.Mr. Ravi issued a cheque for ₹50,000 to Mr. Suresh in discharge of a business debt. When Mr. Suresh presented the cheque to the bank, it was returned unpaid with the remark 'insufficient funds'. Advise Mr. Suresh on the legal remedy available to him under the Negotiable Instruments Act, 1881, and state the procedure he must follow, including the time limits prescribed.

A cheque dishonoured for insufficiency of funds gives the payee a real remedy, but only if a strict, time-bound procedure is followed exactly before any criminal complaint can be filed.

The remedy available. Since Mr. Ravi's cheque for ₹50,000 was returned unpaid because of insufficient funds in his account, this squarely falls within Section 138 of the Negotiable Instruments Act, 1881. Section 138 deems the drawer of such a cheque to have committed an offence, punishable on conviction with imprisonment that may extend to two years, or a fine that may extend to twice the amount of the cheque (here, up to ₹1,00,000), or both.

The procedure Mr. Suresh must follow, step by step, with the prescribed time limits:

1. Presentment within validity. Mr. Suresh must have presented the cheque to the bank within its normal period of validity (as a matter of standard banking practice, usually three months from the date on the cheque) — the facts state he did present it and it was returned, so this condition is met.
2. Written notice of demand within 30 days. Mr. Suresh must issue Mr. Ravi a notice in writing, demanding payment of the ₹50,000, within 30 days of receiving information from the bank that the cheque was dishonoured. A verbal demand, or a notice sent after the 30-day window, will not satisfy this requirement.
3. 15 days for the drawer to pay. Once Mr. Ravi receives this notice, he has 15 days to make the payment. If he pays the full amount within these 15 days, no offence is made out and no complaint can be filed.
4. Filing the complaint. Only if Mr. Ravi fails to pay within that 15-day period can Mr. Suresh proceed to file a criminal complaint against him for the Section 138 offence. Filing the complaint any earlier — before the 15 days have run out — would be premature. …

A frequent mistake is assuming Mr. Suresh can file a criminal complaint immediately upon the cheque being dishonoured — he cannot; the written notice and the drawer's 15-day opportunity to pay are mandatory prerequisites, and skipping either step (or filing t …