Cheque Bounce Complaint Against a Company under Sections 138 and 141 of the Negotiable Instruments Act
Updated: 3 September 2026
Where a dishonoured cheque is drawn on the account of a company, the complaint is governed principally by Sections 138, 141 and 142 of the Negotiable Instruments Act, 1881. The company is ordinarily the principal accused, while directors, managers, secretaries or other officers can be proceeded against only when the statutory requirements for vicarious liability are satisfied.
When Section 141 applies to a company
Section 141 extends liability for an offence committed by a company to persons who, at the time the offence was committed, were in charge of and responsible to the company for the conduct of its business. It also covers a director, manager, secretary or other officer where the offence is proved to have been committed with that person's consent or connivance, or is attributable to that person's neglect.
The Supreme Court has repeatedly clarified that merely holding the office of director is not, by itself, sufficient. A complaint against an ordinary director should contain the essential factual assertion that the person was in charge of and responsible for the conduct of the company's business at the relevant time. The position is different for a Managing Director or Joint Managing Director and for a person who actually signed the dishonoured cheque on behalf of the company.
Documents and information to keep ready
- Copy of the dishonoured cheque or cheques.
- Bank return memo or other bank record showing the reason for dishonour.
- Copy of the statutory demand notice issued under Section 138.
- Postal receipt, courier receipt, tracking report, acknowledgment or other material showing dispatch and service or attempted service of the notice.
- Reply to the statutory notice, if any.
- Documents showing the legally enforceable debt or liability, such as invoices, agreements, account statements, purchase orders, acknowledgments or correspondence, as applicable.
- Company identification particulars, including correct legal name and CIN where available.
- MCA master data and relevant public documents showing the directors or officers connected with the company during the material period.
- DIR-12 or other available MCA filing/history relevant to appointment, resignation or cessation of a director, where the identity and tenure of a person sought to be prosecuted is in issue.
- Material identifying the authorised signatory of the cheque and the capacity in which the cheque was signed.
- Board resolution, authority letter or other corporate authorisation of the complainant's representative, where the complainant itself is a company or other juristic person.
Information about the accused company and persons sought to be made liable
The Delhi High Court's 2013 directions required a structured set of information to give the Magistrate a clear picture of the company and the persons against whom vicarious liability was alleged. The following updated checklist preserves that useful structure while reflecting current company-law records.
| Particular | Information to provide |
|---|---|
| Accused company | Full legal name of the company, registered office and CIN, if available. |
| Dishonoured cheque | Payee, drawer, cheque number, cheque date, amount, drawer bank and branch, collecting/payee bank and branch, and the signatory. |
| Dishonour | Date of presentation, date of return and the exact reason stated in the bank return memo. |
| Persons sought to be made vicariously liable | Name, designation, relevant tenure and clear factual averments explaining why each person was in charge of and responsible for the conduct of the company's business at the relevant time, or the facts supporting consent, connivance or neglect under Section 141(2). |
| Statutory notice | Date of notice, date and mode of dispatch, address used, service/tracking particulars and date of receipt or deemed service relied upon. |
| Reply | Date and material contents of any reply to the statutory notice. |
| Corporate records | Relevant MCA master data, DIR-12/public documents or other authentic records showing the director/officer status during the material period. |
Section 138 time limits
For practical compliance, the cheque should be presented within its validity period. Although Section 138 refers to six months or the cheque's validity, whichever is earlier, Reserve Bank of India directions provide that cheques, drafts, pay orders and banker's cheques are not to be paid when presented beyond three months from their date. After receiving information from the bank regarding dishonour, the payee or holder in due course must issue the statutory demand notice within 30 days. The drawer then has 15 days from receipt of the notice to make payment. If payment is not made, the complaint is ordinarily to be filed within one month from the date on which the cause of action arises, subject to the court's statutory power to condone delay for sufficient cause.
Territorial jurisdiction
Section 142(2) contains special jurisdiction rules for Section 138 cases. Where the cheque is delivered for collection through an account, jurisdiction is linked to the branch where the payee or holder in due course maintains the account. Where the cheque is presented otherwise than through an account, jurisdiction is linked to the branch of the drawee bank where the drawer maintains the account.
Key legal position on directors and cheque signatories
A person should not be prosecuted merely because his or her name appears as a director. For an ordinary director or officer who did not sign the cheque, the complaint must satisfy the pleading requirements of Section 141. The Supreme Court has reaffirmed that a Managing Director or Joint Managing Director is treated differently because of the office held, and that the signatory of a dishonoured cheque is directly connected with the incriminating act.
Delhi High Court direction in Sudeep Jain v. ECE Industries Ltd.
In its order dated 6 May 2013 in Crl.M.C. Nos. 1821/2013 and 1822/2013, the Delhi High Court directed Metropolitan Magistrates in Delhi to seek company-director information and a separate information sheet in complaints under Sections 138 and 141. The order referred to copies of Form 32 and required particulars concerning the company, dishonoured cheque, persons sought to be made vicariously liable, statutory notice and reply. The direction took effect from 1 July 2013.
Because the corporate filing framework has since changed, practitioners should not treat old Form 32 as the current MCA filing form. The present equivalent filing for appointment or cessation of directors and changes among directors/key managerial personnel is DIR-12, supplemented where appropriate by MCA master data and public documents.
Official legal and regulatory resources
India Code - Negotiable Instruments Act, 1881 Ministry of Corporate Affairs MCA - DIR-12 Instruction Kit RBI - Three-Month Cheque Validity Direction Supreme Court - Section 141 principles (2025)
Frequently asked questions
Can all directors of the company be made accused?
No. The complaint must satisfy Section 141 for each person sought to be prosecuted. Mere directorship is not enough for an ordinary director who did not sign the cheque.
Is Form 32 still required?
The 2013 Delhi High Court order referred to Form 32 as it existed at that time. Under the present MCA framework, DIR-12 and current/historical MCA records are the relevant sources for appointment, cessation and changes involving directors and key managerial personnel.
Should the company itself be named as an accused?
Where the cheque is drawn on the account of a company and liability is sought to be imposed on its officers under Section 141, the statutory scheme treats the company as the principal offender. Complaints should therefore be drafted with care to correctly array the company and the individuals against whom vicarious liability is specifically alleged.