A Section 138 complaint under the Negotiable Instruments Act, 1881 requires a validly issued cheque, presentation within its validity period, dishonour, a statutory demand notice within 30 days of receiving the bank's return memo, and a complaint filed within one month of the cause of action arising if the demand is not met within 15 days of the notice — each of these limitation points is where a large share of complaints are dismissed on technical grounds.
Once cognizance is taken, courts increasingly encourage compounding at the pre-trial stage, and the Supreme Court has repeatedly directed that compounding should be permitted even at the appellate or revisional stage, subject to costs, since the object of Section 138 is compensatory rather than purely punitive.
On proof, Section 139 raises a presumption in the complainant's favour that the cheque was issued for a debt or liability, and it is for the accused to rebut this by a preponderance of probability — not by proof beyond reasonable doubt — typically through the cross-examination of the complainant rather than by leading fresh evidence.
Compensation on conviction can extend up to twice the cheque amount under Section 143A (interim compensation, pending trial) and Section 148 (pending appeal), both inserted by the 2018 amendment specifically to address delay being used as a defence strategy.