How MSMEs in Chhattisgarh can recover delayed payments under the MSMED Act
A guide for micro and small suppliers in Raipur and Chhattisgarh — the 45-day rule, statutory interest and the Facilitation Council process.
Read article ↗A dishonoured cheque gives the payee a powerful remedy under Section 138 of the Negotiable Instruments Act, 1881. That remedy depends on following a strict timeline, and a missed deadline can cost you the case.
Step 1: Present the cheque in time
A cheque must be presented to the bank within three months of the date written on it.
Step 2: Send the legal notice within 30 days
Once the bank returns the cheque unpaid (for example, “funds insufficient”), you have 30 days from receiving the return memo to send a written demand notice to the drawer.
Step 3: The drawer gets 15 days
The drawer has 15 days from receiving the notice to pay the cheque amount. If they pay, the matter ends there.
Step 4: File the complaint within one month
If the drawer does not pay within those 15 days, the complaint must be filed within one month after the 15-day period ends. Courts can condone delay for sufficient cause, but you should not rely on it.
Where can you file?
Under Section 142(2), a complaint for an account-payee cheque lies with the court where the payee’s bank branch is located. If you deposited the cheque in your account at a Raipur branch, the court in Raipur will usually have jurisdiction, even if the drawer lives in another state.
What the court can order
- Imprisonment of up to two years, a fine of up to twice the cheque amount, or both.
- Interim compensation of up to 20% of the cheque amount during the trial (Section 143A).
- If the accused appeals a conviction, the appellate court can require a deposit of at least 20% of the fine or compensation (Section 148).
Settlement is always possible
The offence is compoundable, so the parties can settle at any stage. In practice, many cases end in a settlement once the complaint is filed.
Checklist for payees
- Original cheque and bank return memo
- Copy of the notice with postal and delivery proof
- Invoice, agreement or other proof of the underlying debt
This article is general information, not legal advice. For advice on your situation, please contact us.