In short. For a bounced cheque you can file a Section 138 criminal complaint, an Order 37 summary suit for recovery, or both at the same time. The criminal case has strict deadlines, a low court fee and personal pressure on the drawer. The summary suit needs ad valorem court fee but gives a decree with interest. For larger amounts, filing both is common.
The choice is usually made in a hurry. A cheque bounces, the 30-day notice period starts running, and the payee wants to know which case to file. Most people know about the criminal case, because it is cheap to start and frightening to receive. Fewer know that the same cheque can found a civil suit with a fast-track procedure, and that for a business with a large unpaid bill, the civil route may be what actually gets the money back.
This post compares the two routes for the payee and explains when each fits, when both fit, and when neither is the right tool. The criminal case in detail is on our cheque bounce practice page; the civil procedure is explained in our post on recovering money through an Order 37 summary suit.
- Criminal route
- Section 138, NI Act; complaint before a magistrate
- Civil route
- Order 37, CPC; summary suit for recovery
- Criminal deadline
- Notice within 30 days of the memo; complaint within a month after 15 days
- Civil deadline
- Generally 3 years
- Interest
- Civil suit: contract rate, or 18% under s.80 NI Act if none stated
- Both at once
- Allowed; amounts paid in one are taken into account in the other
Can I file both a cheque bounce case and a civil suit for the same cheque?
Yes. The criminal complaint and the civil suit protect different interests. The complaint under Section 138 punishes the drawer for issuing a cheque that was not honoured; the civil suit recovers the debt. Courts have consistently held that the two can run side by side, and that a pending civil suit is no ground to stay the criminal case, or the other way round.
What you cannot do is recover the same money twice. If the drawer pays compensation in the criminal case, that amount is taken into account in the civil suit or in execution of the decree, and money recovered under the decree is taken into account by the criminal court when it fixes compensation. In practice, the case that pays first reduces the claim in the other.
Running both costs more in fees and time, and it means two sets of hearings. For a cheque of ₹50,000 that is rarely worth it. For a business owed several lakh across a few cheques, by a drawer with assets, it often is.
Section 138 complaint and Order 37 summary suit compared
| Point | Section 138 complaint | Order 37 summary suit |
|---|---|---|
| What it is | Criminal prosecution of the drawer | Civil claim for recovery of money |
| Deadline | Notice within 30 days of receiving the memo; complaint within one month after the 15-day payment period | Generally 3 years from when the claim arose |
| Where filed | Court where the payee's bank branch is (s.142(2)) | Where the defendant lives or works, or where the cause of action arose (CPC s.20) |
| Court fee | Usually small | Ad valorem, on the amount claimed |
| Who must attend | Accused must appear personally, at least at key stages | Parties appear through advocates; personal presence rarely needed |
| What you get | Conviction; fine up to twice the cheque amount; compensation | Decree for the amount, interest and costs |
| Interest | Not as such, though compensation can reflect delay | Contract rate, or 18% a year under s.80 NI Act if none stated, plus interest under s.34 CPC |
| Money during the case | Interim compensation up to 20% (s.143A) | Conditional leave to defend may require the defendant to deposit an amount |
| Defendant's defence | Rebut the s.139 presumption at trial | Must get leave to defend by showing a substantial defence |
| Against a company | Company plus directors in charge (s.141) | Company only, unless someone gave a personal guarantee |
| Enforcement | Recovered as a fine; default imprisonment if unpaid | Execution of the decree: attachment and sale of assets, garnishee orders |
| Ends by settlement | Compounding under s.147 | Compromise decree under Order 23 Rule 3 |
What does the criminal case do well?
It is cheap to start and hard to ignore. The court fee on a complaint is small, and the accused must come to court in person, sign a bail bond and keep coming until exempted. For many drawers, that personal inconvenience, and the risk of a conviction on their record, does more than any civil demand. A large share of cheque cases settle at the first or second hearing for that reason.
The law also gives the complainant money during the case. Under section 143A the court can order the accused to pay interim compensation of up to 20 percent of the cheque amount, and under section 148 an accused who appeals a conviction can be required to deposit at least 20 percent of the fine or compensation. Our posts on interim compensation and the 20 percent deposit in appeal explain both. At the end, the court can impose a fine of up to twice the cheque amount and direct that it be paid to the complainant as compensation.
Directors and partners can also be made accused under section 141, if they were in charge of the business when the offence was committed. That personal exposure is often what brings a company to the table.
Where does the criminal case fall short?
The deadlines are strict and unforgiving. Miss the 30-day notice window, file the complaint a day early, or present the cheque after its three-month validity, and the criminal route is closed for that cheque. Condonation of delay is possible for the complaint, but not for a missed notice.
The criminal case also recovers only the cheque amount, and only through compensation. If the underlying debt is larger than the cheques, or includes interest or other charges, the criminal court will not decide that. Compensation that is not paid is recovered as a fine, by attachment of property, or the accused serves a default sentence. A drawer who would rather sit out the default sentence than pay leaves the complainant with a conviction but no money, and recovery then still requires a civil claim.
Trials take time. In Delhi's NI Act courts, a contested case commonly runs for a couple of years or more, with appeals after that. The complainant, or a representative with knowledge of the transaction, has to attend for evidence. If the drawer has left India or cannot be served, the criminal case stalls, while a civil suit can proceed ex parte once service is complete.
How does an Order 37 summary suit work for a cheque?
Order 37 of the Code of Civil Procedure provides a faster procedure for suits on bills of exchange, hundis and promissory notes, and for debts payable under a written contract. A cheque is a bill of exchange, so a suit on a dishonoured cheque fits squarely. The plaint must state that it is filed under Order 37 and that no relief outside its scope is claimed.
The defendant gets ten days from service to enter appearance. The plaintiff then serves a summons for judgment, and the defendant has ten days to apply for leave to defend, with an affidavit setting out the defence. Under the principles laid down by the Supreme Court in IDBI Trusteeship Services v Hubtown (2017), leave is refused where the defence is frivolous or vexatious, granted unconditionally where it is substantial, and granted on conditions, often a deposit of the amount or part of it, where it is plausible but doubtful. If leave is refused or the condition is not met, the plaintiff gets a decree without a full trial.
Interest is the other advantage. Where the cheque or the contract states a rate, the suit claims it. Where no rate is stated, section 80 of the NI Act provides interest at 18 percent a year from the date the amount ought to have been paid. The court can also award interest during the suit and until payment under section 34 of the CPC, and costs.
Where is a summary suit for a cheque filed in Delhi?
The territorial rule is different from the criminal case. A civil suit is filed where the defendant resides or carries on business, or where the cause of action arose in whole or part, under section 20 of the CPC. The payee's bank branch is not the deciding factor as it is under section 142(2) of the NI Act. So a Delhi creditor suing a Noida debtor may have a choice of forums, depending on where the contract was made and where payment was due.
If the cheque arises from a commercial transaction, such as supply of goods, services, construction or a business loan, and the amount is ₹3 lakh or more, the suit is a commercial suit under the Commercial Courts Act 2015 and goes to the commercial court. In Delhi, claims up to ₹2 crore go to the commercial courts at the district level and larger ones to the Commercial Division of the Delhi High Court. Courts have generally required pre-institution mediation under section 12A before such a suit is filed, unless urgent interim relief is sought, following Patil Automation v Rakheja Engineers (2022). Our page on the commercial courts in Delhi explains that process.
A friendly loan or a non-commercial debt goes to the ordinary civil court, the court of the Civil Judge or District Judge depending on value. Our civil law practice page covers recovery suits more generally.
The civil suit has a longer window, which matters when the criminal one closes
A summary suit on a cheque can generally be filed within three years. That makes it the main remedy when the criminal route has been lost: the notice went out on day 34, the complaint was filed late without a condonation application, or the cheque was presented after its validity. The debt survives those mistakes even though the prosecution does not.
The longer window also helps when the debt behind the cheque is older or disputed, though the limitation questions there need care. Our post on cheques for time-barred debts explains how acknowledgments and the cheque itself affect limitation.
Do not treat three years as a comfortable margin. Pre-institution mediation in commercial matters is meant to finish within three months, extendable by two with consent, and that time is excluded from limitation, but a debtor who sees no suit coming for two years has had two years to move assets.
Court fee and costs: the practical difference
The biggest practical difference is the court fee. In Delhi, a Section 138 complaint usually carries only a small court fee. A civil suit carries ad valorem court fee on the amount claimed, worked out under the court fee law that applies in Delhi or Uttar Pradesh, and for claims of several lakh that is a real sum paid up front. This is why many individuals with a single cheque go only to the criminal court.
The fee is recoverable as part of the costs if the suit succeeds, and a decree carries interest, which the criminal case does not. For a business with a documented claim and a solvent debtor, the arithmetic often favours filing the suit too. For a small cheque from a person with no visible assets, it rarely does.
Advocates' fees for each case are separate and are discussed at the first meeting; we agree them in writing, stage by stage. Court fees and other out-of-pocket costs are in addition. Be wary of anyone who tells you the civil suit costs nothing extra because it is 'only paperwork'; a contested application for leave to defend is real work.
Getting the money: attachment before judgment and execution
A civil suit gives tools that a criminal case does not. If the defendant is about to sell or remove property to defeat a decree, the court can order attachment before judgment under Order 38 Rule 5, or ask the defendant to furnish security. That needs specific evidence of intent, such as a property listed for sale or a business being wound down, but where it is available it is powerful.
After the decree, execution under Order 21 allows attachment of bank accounts, attachment and sale of movable and immovable property, attachment of a share of salary, and garnishee orders against people who owe money to the defendant. A decree can generally be executed for twelve years. A criminal compensation order, by contrast, is recovered as a fine, and its main pressure is the default sentence.
If the drawer is a company that may be heading for insolvency, consider the timing carefully. Once a moratorium starts under section 14 of the Insolvency and Bankruptcy Code, both the suit and execution against the company stop, and the criminal case against the company stops too, though the case against its directors continues.
How to decide: five questions
We usually work through these with a client in the first meeting, in this order.
Is the criminal route still open?
Check the cheque date, the return memo date and whether a notice has gone. If the 30-day window has passed with no notice and the cheque cannot be presented again within validity, only the civil route remains.
How large is the amount compared with the court fee?
For small amounts, the criminal case alone is usually proportionate. For larger amounts, especially in business, the suit's interest and enforcement tools justify the fee.
Does the drawer have reachable assets?
A decree is worth only what you can execute it against. Property, a running business, bank accounts or salary in India make the civil route more attractive.
What proof do you have beyond the cheque?
Invoices, a loan agreement, ledgers and acknowledgments make leave to defend harder to get. If the cheque is the only document, expect the defendant to raise a defence and the suit to go to trial.
Is the drawer a company, an MSME buyer or near insolvency?
Company cheques bring in directors on the criminal side. Unpaid MSME suppliers have the Facilitation Council. Large operational debts may justify an insolvency petition. Each changes the plan.
When Advocate B.K. Singh advises a business on a stack of bounced cheques, the question he asks first is not which case is stronger but which one the debtor will feel. For some debtors that is the courtroom; for others it is the attachment of a bank account.
Running both together: how it works in practice
One legal notice can serve both purposes. It demands the cheque amount within 15 days under Section 138, and it can also demand interest and the balance of the account, giving notice of a civil claim. Keep the Section 138 demand clear and limited to the cheque amount; mixing in larger demands without separating them gives the drawer an argument that the notice was defective.
File the criminal complaint within its deadline first, because that deadline is the tight one. The suit, after mediation if it is a commercial matter, can follow. Keep both pleadings telling the same story, with the same dates and the same amount. What a witness says in cross-examination in one case can be used to contradict them in the other, and inconsistencies between a complaint and a plaint are a gift to the other side.
Settlement should cover both. A single written settlement can provide for compounding the criminal case under section 147 and a compromise decree or withdrawal in the suit, with the payment schedule and what happens on default. Our post on settling a cheque bounce case explains the stages; the point here is not to settle one case and leave the other hanging.
Company cheques, MSME dues and arbitration clauses
When a company's cheque bounces, the criminal complaint can name the company and the directors who were in charge of its business, which our post on director liability covers. The civil suit lies only against the company, unless a director gave a personal guarantee. For a debtor company with few assets, the criminal case against directors may be the only real lever.
If you are a registered micro or small enterprise and the cheque was for goods or services supplied, the MSMED Act gives another route: a reference to the Micro and Small Enterprises Facilitation Council, with compound interest at a statutory rate. Our post on MSME delayed payment claims explains it. For large operational debts against a company, a petition under section 9 of the Insolvency and Bankruptcy Code may be possible where the default is ₹1 crore or more.
If the contract behind the cheque has an arbitration clause, the defendant can ask the civil court to refer the dispute to arbitration under section 8 of the Arbitration and Conciliation Act. The criminal complaint is not arbitrable and continues. In such cases the combination is usually the Section 138 complaint plus an arbitration claim for the full debt, with interim relief from the court under section 9 if assets are at risk.
A made-up example: a contractor's four cheques
Here's a made-up example. A steel trader in Ghaziabad supplies material to a Delhi building contractor and receives four post-dated cheques totalling ₹18 lakh against invoices of ₹21 lakh. All four bounce 'Funds insufficient'. The trader sends a legal notice within 30 days demanding ₹18 lakh within 15 days, and separately states that the further ₹3 lakh on the invoices and interest are also due. Nothing is paid.
The trader files a Section 138 complaint for the ₹18 lakh in the court where his bank branch is, naming the contractor's company and its two working directors. At the same time, his advocate starts pre-institution mediation under section 12A for the full ₹21 lakh with interest. Mediation fails, and a commercial summary suit is filed against the company. The trader has learned that the company owns a plot in Greater Noida that it has listed for sale, and the suit includes an application for attachment before judgment.
In the criminal case, the directors appear and the court considers interim compensation. In the suit, the company applies for leave to defend, saying some material was substandard, but has no contemporaneous complaint to show. The court grants leave on condition that the company deposits a substantial part of the claim. Faced with a deposit order in one court and personal appearances in the other, the company proposes a settlement covering both cases. The terms are recorded in both courts. This is an illustration, not a prediction: different facts, or a debtor with nothing to lose, would play out differently.
Before you file either case
- Cheque presented within three months of its date
- Date of receiving the return memo noted
- Legal notice sent within 30 days, to every correct address
- Proof of dispatch and delivery of the notice kept
- Invoices, agreement, ledger or loan proof collected
- Interest rate, if any, found in the cheque or contract
- Drawer's assets in India identified, if a suit is planned
- Whether the dispute is commercial and needs section 12A mediation checked
- Arbitration clause in the contract checked
- Drawer company's insolvency status checked on the NCLT and MCA records
Mistakes when choosing a route
- Filing only the criminal case for a large business debt. The criminal court decides the cheque amount, not the account. Interest and the balance need a civil claim.
- Filing only the civil suit and missing the 30 days. The notice window is short. Even if you plan to rely on the suit, send the Section 138 notice in time and keep the criminal option alive.
- Telling different stories in the two cases. Amounts, dates and the nature of the transaction must match in the complaint and the plaint.
- Ignoring the commercial court rules. A commercial summary suit filed without mediation, where no urgent relief is sought, can be rejected.
- Settling one case and forgetting the other. Draft one settlement that deals with both.
- Suing a company with nothing in it. A decree against an empty company is paper. Check assets before paying ad valorem court fee.
What we usually suggest
For a single cheque of modest value from an individual, the criminal case alone is usually enough, and most such cases settle. For business debts of several lakh, documented by invoices or a contract, against a debtor with assets, we usually suggest both: the complaint for pressure and the summary suit for interest, security and enforcement. Where the criminal route has been lost, the summary suit is the remedy, and it should be filed before the debtor has time to rearrange its affairs.
If you want an advocate to look at your cheques and tell you which route fits, the team of Advocate B.K. Singh at B.K. Singh & Associates can review the papers and the deadlines with you; write to us through the online enquiry form. For settlement through mediation or Lok Adalat, see our page on alternate dispute resolution.
Frequently asked questions
Can I file a civil suit and a cheque bounce case at the same time?
Yes. A Section 138 complaint and a civil suit for recovery are independent and can run together. Courts take into account money recovered in one when deciding the other, so you cannot be paid twice.
Which is faster, a cheque bounce case or a summary suit?
It depends on the defence. A summary suit can end quickly in a decree if the defendant fails to get leave to defend. A contested cheque case commonly takes a couple of years, though many settle early because the accused must attend court.
What is the time limit for a civil suit on a bounced cheque?
Generally three years. That is much longer than the criminal route, where the notice must go within 30 days of the return memo. Take advice on the exact starting date for your claim.
Can I claim interest in a cheque bounce case?
Not as interest in the criminal case, though compensation can reflect the delay. In a civil suit you can claim the agreed rate or, if no rate is stated, 18 percent a year under section 80 of the NI Act, plus interest during the suit.
I missed the 30-day notice deadline. Can I still recover the money?
Yes, through a civil suit, including an Order 37 summary suit, within the limitation period. If the cheque is still within its three-month validity, you may also present it again and send a fresh notice after the next return.
Is pre-institution mediation required before a summary suit on a cheque?
If the claim is a commercial dispute of ₹3 lakh or more, courts have generally required mediation under section 12A of the Commercial Courts Act first, unless urgent interim relief is sought. Non-commercial suits do not need it.
What court fee is payable on a summary suit in Delhi?
Ad valorem court fee on the amount claimed, calculated under the applicable court fee law. It is paid when the suit is filed and is recoverable as costs if you succeed. A Section 138 complaint usually carries only a small court fee.
Can directors be sued in a civil suit for a company's cheque?
Generally no; the civil suit lies against the company. Directors can be made accused in the criminal case under section 141 of the NI Act if they were in charge of the business, and in a civil suit only if they gave a personal guarantee.
What if the contract has an arbitration clause?
The civil claim may be referred to arbitration under section 8 of the Arbitration and Conciliation Act. The Section 138 complaint is criminal and continues regardless.
Will the civil court wait for the criminal case to finish?
No. The two proceed independently, and neither court is bound by the other's findings. Keep your evidence consistent across both.
What happens if the accused does not pay the compensation ordered?
It is recovered as a fine, including by attachment of property, and the accused may have to serve a default sentence. A civil decree, by contrast, is executed against assets through the civil court.
Can both cases be settled together?
Yes, and they should be. One written settlement can provide for compounding the criminal case under section 147 and a compromise decree or withdrawal of the suit, with a payment schedule and default terms.
Written and reviewed at B.K. Singh & Associates
Advocate B.K. Singh
Founder of B.K. Singh & Associates. MCA, LL.B., LL.M., with more than twenty years of practice before the Supreme Court, the Delhi High Court, district courts and tribunals across Delhi NCR. This article explains the general law as of 24 October 2026; it is not legal advice on your facts.