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A cheque is often treated as a promise to pay. But what happens when that promise reaches the bank and the bank sends it back unpaid? For a business that is already waiting for payment, a bounced cheque can turn a simple receivable into a legal recovery issue. The good news is that Section 138 of the Negotiable Instruments Act, 1881 (NI Act) provides a statutory remedy in cases where a cheque issued towards a legally enforceable debt or liability is dishonoured, subject to ce

"A cheque in hand is not funds realized; until the amount clears through the banking channel, operational capital remains locked." For any creditor, receiving a cheque does not necessarily mean securing payment. A business or individual may fulfill contractual obligations, deliver goods, render services, and receive a formal negotiable instrument to settle an account. Yet, if that instrument is dishonoured by the bank, the underlying cash remains unrealized. When a cheque is