March 19, 2025 - The Supreme Court has ruled that if a cheque bounces then it cannot be immediately considered a crime. Action against the defaulter can be taken only after the lapse of 15 days following the issuance of a notice, as per Section 138 of the Negotiable Instruments (NI) Act, 1981.

A Bench of Justices Sudhanshu Dhulia and Ahsanuddin Amanullah was hearing a petition filed by a former director of a company seeking the dismissal of a criminal case filed against him owing to a bounced cheque.

The former director of the company argued that the company was undergoing insolvency proceedings. As a result, suspension orders had been issued under the Insolvency and Bankruptcy Code, which led to the bounced cheque.

The Court ordered the case to be dismissed.

Source: Media Reports