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Section 138 of the Negotiable Instruments Act, 1881
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About — Section 138 of the Negotiable Instruments Act, 1881
Section 138 of the Negotiable Instruments Act, 1881 makes the dishonour of a cheque—when it is returned unpaid after a demand notice—a criminal offence. It gives creditors a quick remedy; for instance, a Rs 5 lakh cheque that bounces after a 15‑day notice can lead to up to two years’ imprisonment or a fine.