138 n.i.act

Sec 138 of N.I.act attracts when a cheque returned unpaid by bank.In your case no any cheque return unpaid so sec 138 of N.I.Act does not attract  apart from this sec is in regards to penalties for bouncing of cheques.Your MD wants to recover interest on due amount for that file civil suit for recovery of money.

Sec 138 of N.I.Act :-

Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for ²["a term which may extend to two year"], or with fine which may extend to twice the amount of the cheque, or with both:

Dear Sir, Thanks for your reply.since the cheque was bounced and we sent notice under sec.138. pls suggest abt the interest query.is interest is in N.I Act or any other . pl suggest