Section 138 NI Act Legal Notice Format 2026 — Complete Template & BNS Impact

What Section 138 NI Act Covers

Section 138 of the Negotiable Instruments Act 1881 is the most-litigated provision in Indian commercial law. It creates a criminal remedy for a payee when a cheque issued for the discharge of a debt or liability is dishonoured by the drawee bank for insufficiency of funds or because the amount exceeds the arrangement with the bank.

The offence is punishable with imprisonment up to two years, or a fine up to twice the cheque amount, or both. Crucially, the proceedings are quasi-criminal: the payee must follow a strict pre-complaint notice procedure. Failure at any step bars the complaint entirely.

Section 138 sits in the NI Act 1881 — a central legislation separate from the IPC. When the Bharatiya Nyaya Sanhita (BNS) 2023 replaced the IPC on 1 July 2024, it had zero effect on Section 138. Your existing Section 138 notice templates and practice remain valid.

Step-by-Step Process: Dishonour to Complaint

Jurisdiction: Post the 2018 amendment, the complaint is filed in the court within whose local jurisdiction the cheque was presented (not where it was drawn or the payee's address). Confirm this before filing.

Delivery and Presumption of Service

Send the notice by registered post with acknowledgement due or speed post. Under Section 27 of the General Clauses Act, service by registered post to the correct address creates a rebuttable presumption of delivery even if the drawer refuses to accept it or the envelope is returned undelivered. Email is acceptable only if the parties had previously agreed to it in writing.

Section 138 NI Act Legal Notice — Full Template (2026)

The template below incorporates the 2025 Supreme Court requirement that the demand amount exactly match the cheque amount. Every variable is marked in square brackets — replace each one before sending. Do not alter the demand paragraph structure.

The 2025 Supreme Court Ruling You Cannot Ignore

In Kaveri Plastics v Mahdoom Bawa (2025), the Supreme Court of India settled a longstanding question on the demand requirement under Section 138(b): the amount claimed in the notice must exactly match the face value of the dishonoured cheque.

Before this ruling, some High Courts tolerated minor discrepancies or allowed a notice that demanded the cheque amount "plus interest". The Supreme Court has now categorically held that:

• The demand in the notice is a statutory pre-condition, not a mere formality.
• Demanding a figure different from the cheque amount — even if higher due to interest, or lower due to a typing error — invalidates the notice.
• An invalid notice means no valid cause of action arises, and any complaint filed on that basis is liable to be dismissed at the threshold.

Practical implication: Never add interest, legal costs, or any other amount to the demand figure. If you need to recover interest, do so through a separate civil suit. The Section 138 notice must demand one number and one number only — the exact cheque amount.

The template above already reflects this requirement: Clauses 4 and 5 explicitly state the demand amount and confirm it is identical to the cheque face value.

Impact of BNS / BNSS / BSA on Section 138 Notices

What Did NOT Change

Section 138, along with all of Chapter XVII of the Negotiable Instruments Act 1881, is completely unaffected by BNS, BNSS, or BSA. The NI Act is a separate central statute. Cheque-bounce proceedings, the notice procedure, the 30-day timeline, the 15-day demand window, jurisdiction rules — everything remains identical.

What Changed for Companion Criminal Complaints

In some cheque-bounce matters, particularly where a large transaction is involved, lawyers also file a companion complaint for cheating. Here, the BNS change matters:

Key rule: The applicable law is determined by the date the offence was committed, not the date the complaint is filed. For transactions before 1 July 2024, IPC sections still apply. For transactions after 1 July 2024, cite BNS sections.

7 Errors That Invalidate a Section 138 Notice

Courts regularly dismiss Section 138 complaints on procedural grounds. These are the seven most common defects — avoid all of them:

1. Notice sent after 30 days: The 30-day clock starts from the date the payee receives the dishonour memo from their bank (not the dishonour date itself). Missing this deadline is fatal and non-condonable.
2. Amount in notice differs from cheque amount: Post the 2025 Kaveri Plastics SC ruling, even a ₹1 discrepancy voids the notice. This includes adding interest, legal fees, or bank charges to the demanded sum.
3. Wrong address for the drawer: Notice must be sent to the drawer's correct and current address. If you know the address has changed, send to both the old and new address. Failure to send to the correct address defeats the presumption of service.
4. Notice sent by ordinary post only: Ordinary post does not carry the presumption of delivery under Section 27, General Clauses Act. Always use registered post with AD or speed post. Keep the postal receipt.
5. No mention of 15-day demand period: The notice must explicitly give the drawer 15 days to pay. A notice that demands immediate payment or sets a different timeline is technically defective.
6. Complaint filed before 15-day period expires: Filing even one day early makes the complaint premature. Count carefully — the 15 days begin from the date of receipt of the notice, not the date of sending.
7. Notice served by the payee personally, not through advocate: While not legally required, a notice served through an advocate is treated as more credible and is the standard practice. If a notice is later disputed, a registered advocate's covering letter and Bar Council number add evidentiary weight.

How Glomiq Automates Section 138 Notices

A standard cheque-bounce matter can involve multiple dishonoured cheques from the same drawer. Each requires a separate notice with correctly matched amounts. Lawyers handling commercial litigation often process 15–30 such notices in a week — each one requiring careful entry of cheque numbers, amounts, dates, and dishonour reasons.

With Glomiq, you upload your Section 138 notice template once. Glomiq detects all 19 variable fields automatically — cheque number, amount in figures, amount in words, dishonour date, memo number, and more. Then:

• Fill a structured form for each client matter (no Word hunting or copy-paste)
• Amount fields are validated to match before generation (the Kaveri Plastics check, built in)
• Download a perfectly formatted .docx or PDF in under 2 minutes
• Reuse the same template for every new matter — no reformatting, no version drift

Lawyers using Glomiq for Section 138 matters report going from 45 minutes per notice to under 2 minutes — including the time to fill the form and download the file.

FAQ — Section 138 NI Act Notices in 2026

Is Section 138 NI Act replaced by BNS 2023?

No. Section 138 of the Negotiable Instruments Act 1881 is completely unchanged. BNS replaced the IPC, not the NI Act. Cheque-dishonour proceedings continue exactly as before under Section 138.

What exactly did the 2025 Supreme Court ruling change?

In Kaveri Plastics v Mahdoom Bawa (2025), the Supreme Court held that the demand amount in a Section 138 notice must exactly match the cheque amount. Any discrepancy — even a typographical one — invalidates the notice and therefore the complaint. This overrides earlier High Court decisions that had tolerated minor variations.

Can a Section 138 notice be sent by email?

Yes, but only if email was agreed upon as a communication mode between the parties. The safest approach is registered post or speed post, which creates a statutory presumption of delivery even if the drawer refuses to accept the letter.

What if the drawer is a company — who do I sue?

Under Section 141 NI Act, when the drawer is a company, both the company and the individuals responsible for the company's conduct of business at the time are deemed guilty. Name the company as the primary accused and the director / authorised signatory as additional accused. Ensure the notice is addressed to both.