3 Answers
Dear Client, as per your query, In India, a bounced cheque for your final settlement is a criminal offense under Section 138 of the Negotiable Instruments Act of 1881. To recover your money from your former employer, you need to follow these steps: first, obtain a "Cheque Return Memo" from your bank; second, send a Legal Notice to your former employer within 30 days of the bounce of the cheque, demanding money within 15 days; and third, if your former employer does not respond by making the payment within the stipulated period, file a criminal case against the former employer in court within 30 days and obtain a punishment of a maximum of two years’ imprisonment or a fine of twice the amount of the cheque. I hope this answer is helpful. In case of further queries, please do not hesitate to contact us.
Thank You.
Dear Sir,
When an employer issues a cheque towards final settlement / salary dues and it bounces, it is treated as:
Non-payment of legally recoverable debt
Criminal offence + civil wrong
This is not a mere HR issue.
Send Legal Demand Notice
Must be sent within 30 days of cheque bounce
Demand payment within 15 days
Sent via RPAD / Speed Post
This step is mandatory for criminal prosecution.
If No Payment in 15 Days
You may file:
Cheque Bounce Complaint before Magistrate
Labour complaint before Labour Commissioner
Civil recovery suit (optional but powerful)
Employer saying “finance issue” is NOT a defence
Salary cheque is presumed legally enforceable debt
Even private companies & startups are liable
Directors / authorised signatory can be personally summoned.
If satisfied give rating.
Dear Sir, as per your query,
1. Cheque bounce: A bounced cheque issued towards your full-and-final clearance attracts Section 138 of the Negotiable Instruments Act.
2. Mandatory legal notice (within 30 days): You must send a written legal demand notice within 30 days from the date you received the bank return memo, demanding payment within 15 days. This step is compulsory.
3. Next step if amount remains unpaid: If the company fails to pay within 15 days of notice, you can file a Section 138 complaint before the Magistrate, seeking fine (up to twice the cheque amount), compensation.
For further details, feel free to contact our OLQ Team for a detailed discussion.