Cheque dishonor, commonly referred to as “bounced cheque”, is a widespread financial offense in Bangladesh. Whether it’s due to insufficient funds, signature mismatch, or a closed account, dishonoring a cheque is a serious legal matter that can lead to criminal prosecution, civil litigation, or both.
In this guide, we explore the complete legal process for cheque dishonor in Bangladesh, including the laws involved, steps to file a case, timeline, penalties, and how businesses and individuals can protect themselves.
Table of Contents
What is Cheque Dishonor?
A cheque dishonor occurs when a bank refuses to process payment due to:
- Insufficient funds in the drawer’s account
- Mismatched signature
- Account closed or frozen
- Post-dated or stale cheque
- Stop payment instructions
The dishonor is recorded by the bank on a Cheque Return Memo, which serves as official proof.
In Bangladesh, dishonor of a cheque issued for repayment of a legally enforceable debt is a punishable criminal offense under Section 138 of the Negotiable Instruments Act, 1881, as amended.
Legal Grounds for Filing a Cheque Dishonor Case
To proceed with a criminal case under Section 138, the following conditions must be met:
- The cheque was issued for repayment of a debt or liability
- The cheque was presented within 6 months from the date of issue
- The cheque was dishonored by the bank
- The payee (you) issued a legal notice within 30 days of dishonor
- The drawer (issuer) failed to make payment within 30 days of receiving the notice
If all of these elements are fulfilled, a criminal case can be filed.
Step-by-Step: Cheque Dishonor Legal Process in Bangladesh
Step 1: Collect the Return Memo from the Bank
After a cheque is dishonored, the bank will provide:
- The original cheque
- The Cheque Return Memo stating the reason for dishonor
This memo is crucial for initiating legal action.
Step 2: Serve a Legal Notice
Within 30 days of receiving the return memo:
- A legal notice must be sent to the cheque issuer (drawer)
- The notice must demand payment of the cheque amount within 30 days of receipt
- The notice should be sent via registered post or courier, with acknowledgement
The notice should include:
- Cheque details (number, date, amount)
- Reason for dishonor
- Demand for payment within 30 days
- Intention to initiate legal proceedings if unpaid
Hiring a lawyer to draft the notice is strongly recommended for legal precision.
Step 3: Wait for 30 Days
If the drawer fails to repay within 30 days of receiving the notice, the payee becomes eligible to initiate criminal proceedings.
If the amount is paid within this window, the matter is settled and the case cannot be filed.
Step 4: File a Case in Criminal Court
After the 30-day period expires (and within 1 month thereafter), you may file a criminal complaint under Section 138 before the Magistrate’s Court having jurisdiction (usually where the cheque was presented or dishonored).
Required Documents for Filing:
- Copy of the dishonored cheque
- Cheque Return Memo
- Copy of the legal notice
- Proof of delivery of the notice
- A complaint petition stating the full facts
- Government court fee (Tk. 300–500 usually)
The case must be filed within 1 month from the date when the 30-day notice period expires.
Step 5: Court Proceedings & Summons
Once the case is filed:
- The magistrate will review the petition and issue summons to the accused
- The accused will be asked to appear in court and respond
- If found guilty, the court may issue a warrant of arrest, impose a fine, or even order imprisonment
Penalty for Cheque Dishonor in Bangladesh
Under Section 138 of the Negotiable Instruments Act:
- Imprisonment of up to 1 year
- Or a fine up to twice the amount of the dishonored cheque, or both
- Compensation may also be awarded to the complainant
Note: The court typically encourages settlement before awarding strict punishment.
Civil Suit for Cheque Recovery (Optional)
In addition to criminal prosecution, the complainant can file a civil money suit under:
- The Code of Civil Procedure, 1908
- Or under The Artha Rin Adalat Ain, 2003 if the issuer is a borrower from a financial institution
Civil suits are used to recover the cheque amount with interest, especially if criminal cases are delayed.
Defenses Available to the Accused
An accused person may argue:
- The cheque was not issued for a legally enforceable debt
- The cheque was for security purposes only
- There was forgery or signature mismatch
- The notice was not properly delivered
- Payment was already made before the case filing
Burden of proof lies on both parties. Documented evidence plays a vital role in outcome.
Timeframe for Resolution
Cheque dishonor cases are summary in nature, but in practice may take:
- 6 to 12 months (in uncontested or straightforward matters)
- 1 to 2 years or more in case of adjournments, appeals, or absconding accused
Court backlog and availability of parties can impact resolution time.
How to Prevent Cheque Dishonor Disputes
- Always verify sufficient balance before issuing cheques
- Maintain a record of issued and cleared cheques
- Avoid issuing post-dated cheques unless fully authorized
- If a cheque is issued as security, document the terms in writing
- If you receive a cheque, present it within 6 months
Frequently Asked Questions (FAQs)
Is bouncing a cheque a criminal offense in Bangladesh?
Yes. Under Section 138 of the Negotiable Instruments Act, bouncing a cheque for repayment of a legal debt is a punishable criminal offense.
Can I file a case if the cheque was issued for a loan given informally?
Yes, as long as you can prove that the cheque was issued in discharge of a legally enforceable debt.
What happens if the accused doesn’t attend court?
The court may issue a warrant of arrest and proceed ex parte (in absence).
Can both civil and criminal cases be filed together?
Yes. You may pursue criminal punishment under Section 138 and civil recovery through a money suit simultaneously.
How Chattogram Law Office Can Help
At Chattogram Law Office, we handle:
- Legal notice drafting and service
- Cheque dishonor case filing and follow-up
- Criminal defense for wrongly accused persons
- Civil money suits for debt recovery
- Negotiation and out-of-court settlements
Whether you’re a business owner, contractor, or individual—our experienced team ensures your legal and financial rights are enforced efficiently.