Cheque bounce case timeline in the Ghaziabad court: from complaint to judgment

Court

Judicial Magistrate, District Court, RDC Ghaziabad, where the payee's bank branch is.

Evidence

The complainant's case goes in on affidavit under Section 145; cross-examination follows if the drawer asks.

Money on the way

Interim compensation of up to 20% at the plea; the balance on conviction or settlement.

Exit at any stage

Compounding under Section 147, from the first date to the appeal.

A Section 138 case has a shape that does not change much from file to file, and knowing the shape in advance is most of what keeps a client calm. The cheque bounce page covers the notice, the deadlines and the defences; this article walks through the court stages in the order they happen at RDC.

Before filing: the dates and the court

The complaint can be filed only after the cheque has been presented within three months of its date, returned unpaid, a written notice sent within 30 days of the return memo, and 15 days have passed from the drawer receiving it without payment. The Section 138 deadline calculator gives every date from the return memo. The complaint then has to be filed within one month.

Where to file was settled by Parliament in 2015 after the Supreme Court in Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129, had held that the case lay where the drawer's bank was. The amendment to Section 142 reversed that: where the cheque was deposited for collection through an account, the complaint lies where the branch of the payee's bank is. A cheque deposited in a Ghaziabad branch is tried in Ghaziabad. The court guide shows where the Magistrate courts sit and how to read the cause list.

Stage 1: the complaint and the affidavit

The complaint is a written pleading naming the drawer, setting out the debt, the cheque, the dishonour, the notice and its service, and the failure to pay. With it goes the complainant's evidence on affidavit under Section 145, which the Act allows in place of oral examination at the pre-summoning stage, and the documents: the original cheque, the return memo, the notice, the postal receipts and tracking record, and the proof of the debt. The documents checklist lists what the complainant brings. Where the drawer is a company, the complaint names the company and the persons in charge of its business under Section 141.

Stage 2: cognizance and summons

The Magistrate reads the complaint and the affidavit and, if the ingredients of Section 138 appear on the papers, takes cognizance and issues summons to the drawer. Summons are sent by post, and the courts now also send them by electronic means. The summoning order is the first order a drawer can challenge, in the Sessions Court by revision or at the Allahabad High Court, but such challenges succeed only where a legal ingredient is missing on the face of the complaint, such as a notice sent out of time.

Stage 3: appearance and bail

On the date in the summons the drawer appears with counsel. Section 138 is bailable; the Magistrate takes a personal bond, usually with a surety, and the drawer is free to go. A drawer who does not appear invites bailable warrants, then non-bailable warrants, and eventually proclamation. Nearly every arrest in a Ghaziabad cheque bounce case is an arrest for not appearing. A drawer who cannot attend every date applies for exemption from personal appearance, which Magistrates grant as a matter of course when counsel undertakes to appear.

The drawer also receives a copy of the complaint and the documents at this stage, which is when the defence is read against the record for the first time. The reply to the notice, if one was sent, is already part of that record.

Stage 4: the plea and interim compensation

The Magistrate puts the substance of the accusation to the drawer. A plea of guilty leads to sentence and compensation at once; almost every drawer pleads not guilty. That plea is the trigger for Section 143A: the complainant applies for interim compensation of up to 20% of the cheque amount, the drawer is heard, and the court passes a reasoned order. The amount is payable within 60 days, extendable by 30, and is recoverable as a fine. The Section 143A article explains how the figure is argued on both sides.

Stage 5: evidence

The complainant's affidavit stands as examination-in-chief. If the drawer wants to cross-examine, an application is made and the complainant is called; cross-examination in a Section 138 case concentrates on the debt, the circumstances in which the cheque was given, and the service of the notice, because Section 139 presumes the cheque was for a legally enforceable debt and the drawer has to dislodge that presumption. The complainant's other witnesses, if any, follow, usually a bank officer where the return memo is disputed.

After the complainant's evidence the drawer is examined by the court on the incriminating material, the statement of the accused that every criminal trial contains, and then leads defence evidence if he chooses: his own testimony, the agreement, the account statements, the person who can say the cheque was security. The defence case in Ghaziabad courts is won on documents far more often than on witnesses.

Stage 6: arguments and judgment

Both sides argue on the record and the Magistrate delivers judgment. On conviction the sentence can be imprisonment of up to two years, or a fine of up to twice the cheque amount, or both, and the court ordinarily directs that the fine, or compensation under the Code, be paid to the complainant, with interim compensation already paid deducted. On acquittal the interim compensation is repaid with interest. Either side can appeal to the Sessions Court, and a convicted drawer who appeals can be ordered under Section 148 to deposit at least 20% of the fine or compensation during the appeal.

The exit at every stage: compounding

Section 147 makes the offence compoundable, and the courts at RDC encourage settlement from the first date onward, including through the mediation centre at the court complex. A settlement is recorded, the drawer pays, and the Magistrate acquits. The compounding guidelines allow the court to require costs as a percentage of the cheque amount when the settlement comes late in the trial or in appeal, so the cost of the same settlement rises with every stage passed. For a drawer who owes the money, the first date is the cheapest date to settle; for a complainant, a reasonable offer at that stage is usually worth more than a conviction two years later.

What to bring, and when

The complainant brings the cheque, the return memo, the notice and the postal record to the first meeting, and the proof of the debt before evidence. The drawer brings the summons, the complaint and whatever shows the cheque was security or the debt was paid, before the first date and not after the plea. The documents checklist has both lists, and the notice stage that comes before all of this is on the cheque bounce page.

Read next

• Section 143A interim compensation: the 20% order
• Missed the cheque bounce deadline: what happens to the payee and the drawer
• Received a cheque bounce notice in Ghaziabad: the 15-day reply

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