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The Negotiable Instruments Act, 1881

( ACT NO. XXVI OF 1881 )

[ 9th December, 1881 ]

1Chapter XVII

ON PENALTIES IN CASE OF DISHONOUR OF CERTAIN CHEQUES FOR INSUFFICIENCY OF FUNDS IN THE ACCOUNT

Dishonour of cheque for insufficiency, etc. of funds in the account

138. 2[(1)] Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account 3[* * *] is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to 4[thrice] the amount of the cheque, or with both:

 
 

Provided that nothing contained in this section shall apply unless-

 
 
 
 

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

 
 
 
 

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within 5[thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and

 
 
 
 

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within 6[thirty days] of the receipt of the said notice.

 
 
 
 

7[* * *]

 
 
 
 

8[(1A) The notice required to be served under clasue (b) of sub-section (1) shall be served in the following manner-

 
 
 
 

(a) by delivering it to the person on whom it is to be served; or

 
 
 
 

(b) by sending it by registered post with acknowledgement due to that person at his usual or last known place of abode or business in Bangladesh; or

 
 
 
 

(c) by publication in a daily Bangla national newspaper having wide circulation.]

 
 
 
 

9[(2) Where any fine is realized under sub-section (1), any amount up to the face value of the cheque as far as is covered by the fine realized shall be paid to the holder.

 
 
 
 

(3) Notwithstanding anything contained in sub- section (1) and (2), the holder of the cheque shall retain his right to establish his claim through civil court if whole or any part of the value of the cheque remains unrealized.]

  • 1
    The “CHAPTER XVII” including sections 138 to 141 were substituted, for “CHAPTER XVII” including sections 138 and 139” by section 2 of the Negotiable Instruments (Amendment) Act, 1994 (Act No. XIX of 1994).
  • 2
    The existing section was re-numbered as sub-section (1) by section 2 of the Negotiable Instruments (Amendment) Act, 2000 (Act No. XVII of 2000)
  • 3
    The words and commas “for the discharge, in whole or in part, of any debt or other liability,” were omitted by section 2 of the Negotiable Instruments (Amendment) Act, 2000 (Act No. XVII of 2000)
  • 4
    The word “thrice” was substituted, for the word “twice” by section 2 of the Negotiable Instruments (Amendment) Act, 2000 (Act No. XVII of 2000)
  • 5
    The words "thirty days" were substituted for the words "fifteen days" by section 2 of the Negotiable Instruments (Amendment) Act, 2006 (Act No. III of 2006)
  • 6
    The words "thirty days" were substituted, for the words "fifteen days" by section 2 of the Negotiable Instruments (Amendment) Act, 2006 (Act No. III of 2006)
  • 7
    The Explanation of sub-section (1) of section 138 was omitted by section 2 of the Negotiable Instruments (Amendment) Act, 2000 (Act No. XVII of 2000)
  • 8
    Sub-section (1A) was inserted by section 2 of the Negotiable Instruments (Amendment) Act, 2006 (Act No. III of 2006)
  • 9
    Sub-sections (2) and (3) were added by section 2 of the Negotiable Instruments (Amendment) Act, 2000 (Act No. XVII of 2000)
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