Important points regarding s.138, NI Act

To constitute an offence under s. 138 of NI Act, following ingredients must be fulfilled :

1. cheque should have been issued to discharge any debt or liability
2. cheque should have been presented within 6 months or its validity whichever is earlier
3. the payee should have issued a notice in writing to the drawer within 30 days of dishonor of cheque
4. after receipt of the said notice the drawer has failed to pay the cheque amount within 15 days of receipt of notice. offence is not committed if payment is made within 15 days but even if payment is made on 16^th day one can not escape from rigors of s. 138.
5. commission of offence is governed by s. 138 and prosecution is governed by s. 142. under criminal law commission of offence is one thing and prosecution is other
6. notice is not necessary when drawer can not after due search be found
7. limitation for filing a complaint before magistrate is 30 days from the date of expiry of 15 days after receipt of notice by drawer.

Compounding:  the offence under the NI Act is compoundable.

            Trial: trial for this offence will be conducted in summary manner.

Law commission’s recommendation: the law commission has recommended for establishment of fast track courts for trial of offences u/s 138 of NI Act.