Question

Mr. Rajesh issued a cheque of ₹2,50,000 to his supplier, Mr. Sharma, for the payment of goods purchased. When Mr. Sharma deposited the cheque, it was returned by the bank with the remark “Insufficient Funds.” On the basis of the above problem, select the correct option:

• A. A complaint in writing is to be made by Mr. Sharma in the court within five months for the dishonour of the cheque
• B. A complaint in writing is to be made by Mr. Sharma in the court within two months for the dishonour of the cheque
• C. A complaint in writing is to be made by Mr. Sharma in the court within three months for the dishonour of the cheque
• D. A complaint in writing is to be made by Mr. Sharma in the court within one month for the dishonour of the cheque

Hint:

Under Section 138 of the Negotiable Instruments Act, a dishonoured cheque due to insufficient funds can lead to criminal prosecution if the complaint is filed within three months.

Answer 1

The Correct Option is D

Step 1: Relevant provision under the Negotiable Instruments Act, 1881.
As per Section 138 of the Negotiable Instruments Act, 1881, when a cheque is dishonoured due to insufficient funds, the payee must file a written complaint within a specific time period to initiate legal action.
Step 2: Legal procedure and time limit.
The payee (Mr. Sharma) must issue a notice to the drawer (Mr. Rajesh) within 30 days of receiving the bank memo regarding dishonour. The drawer then has 15 days to make the payment. If payment is not made within this period, the payee may file a complaint in court within 30 days (approximately one month). However, the overall time frame permitted by law is **three months** from the date of cause of action.
Step 3: Conclusion.
Hence, Mr. Sharma must file a written complaint in the court within one month from the date of dishonour of the cheque.