Learn to file a complaint u/s 138 of the NI Act

Editor’s Note: This blog has been written with the intention to help young advocates make informed decisions while preparing and filing a case u/s 138 NI Act, 1881. We have made every attempt to make it as comprehensive as possible.

A vast number of new advocates take up S.138 NI cases as their first cases. Therefore, we intend to assist them in every manner possible.

Table of Contents

1. Procedure to be followed in matters with regard to Section 138 of the Act
2. How to seek interim compensation?
3. Depositing of 20% amount by Appellant (Drawer) in High Court
4. Checklist of details and documents required while filing
5. How to calculate court fees?

Procedure to be followed in matters with regard to Section 138 of the Act

1. The cheque needs to be presented to the bank within a period of three months from the date on which it was drawn, whichever is earlier.
2. A legal notice shall be issued to the drawer within 30 days of dishonor of the cheque by Registered Post with all the relevant facts. The drawer is provided a period of not more than 15 days to make the payment if the payment is made then the matter is resolved and the issue is settled. If the payment is not made then the Complainant can file a criminal case under Section 138 of the NI Act, against the drawer within 30 days from the date of expiry of 15 days specified in the notice, with the concerned Magistrate of competent jurisdiction.
3. If the court is satisfied with the Complainant, Summons is then issued to the Accused to appear before the Court.
4. If the accused abstains from appearing before the Court after the Summons is served to him, then the court may issue a Bailable Warrant, if the accused further defaults the appearance then Non-bailable warrant may be issued.
5. Upon the appearance of the accused, he may furnish a Bail Bond to ensure his appearance during the trial.
6. If Accused pleads guilty, the court will post the matter for punishment. If the accused denies the charges then he will be served with a copy of the complaint.
7. The Complainant may present his evidence by way of affidavit and produce all documents including the original cheque in support of his complaint. The Complainant will be cross-examined by the accused or his counsel.
8. The Accused will be given an opportunity to produce his evidence and to submit his documents in support of his case, as well as witnesses in his support.
9. The last stage of the proceeding is that of the arguments after which the court will pass judgment. If the accused is acquitted then the matter ends, but the Complainant can go on further appeal in the High Court, similarly, if the accused is convicted he can file an appeal in the Sessions Court.

How to seek interim compensation?

The Complainant may file an application under Section 143A and submit it either along with the original complaint or separately file it during the pendency of the complaint.

This provision empowers the Court to order the drawer of the cheque to pay interim compensation max 20% of the amount of the impugned cheque to the Complainant. The amount is to be deposited within sixty days from the date of the order of payment.

A further extension of the maximum thirty days can be granted if the Accused shows sufficient cause. There is no specified mode of recovery. It is just an interim compensation which is mandatory. The said amount of interim compensation may be recovered in the manner provided under Section 421 of Cr. P. C – by way of attachment and sale of any movable property of the drawer or a warrant to the Collector of the concerned district to recover the same as arrears of land revenue from the movable or immovable property of the drawer.

If the drawer of the cheque is acquitted, the Court shall direct the Complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant year.

Depositing of 20% amount by Appellant (Drawer) in High Court

Section 148 mandates that wherein an appeal by the drawer against conviction under Section 138 the Appellate Court may order the appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial Court. However, if the appellant is acquitted, then the Court shall direct the Complainant to repay to the appellant the amount so released, with interest.

Along with Form No. 32, the Magistrate also needs to seek information as given below, which is to be annexed in a separate sheet along with the Complaint. It was implemented as per the order of the Hon’ble High Court of Delhi against CRL. M.C. 1821/2013 and CRL MC 1822/2013 with a view to ensuring that the Metropolitan Magistrates dealing with the Complaint cases filed under section 138 read with Section 141 of the Negotiable Instruments Act.

Checklist of details and documents required while filing

1. Original cheque
2. Name of the accused company/party.
3. Particulars of the dishonored cheque/cheques
4. Person/company in whose favor the cheque/cheques have been issued.
5. Drawer of the cheque/cheques
6. Date of issuance of the cheque/cheques
7. Name of the drawer bank and its location
8. Name of the drawee bank and its location
9. Cheque no.(s)
10. Name of the signatory of the cheque/cheques
11. Cheque return memo provided by the bank (reason due to which cheque was dishonored)
12. Name and designation of the person liable for the commission of the offence by the accused company and their exact role as to how and in what manner they were responsible for the alleged offence (in case the accused is a Company)
13. Particulars of the legal notice and status of its service (this notice must be served within 30 days of dishonor of the cheque/cheques)
14. Verification and Affidavit of the Complainant
15. Particulars of the reply to legal notice (if any).
16. Vakalatnama (along with court fee)

How to calculate court fees?

Court fees for recovery suits vary from State to State. Fee for Delhi District courts (mentioned under Court Fee Act, 1870 “as per amended Court Fee Act, 2010”) have categories listed under which increasing amount of recovery money has more amount to be paid as court fee. The minimum court fee is of Rs. 250.