The Negotiable Instruments Act, 1881
Defines and regulates negotiable instruments, with the famous Section 138 making cheque dishonour a criminal offence.
- Sections
- 147
- Chapters
- 17
- Tier
- Tier 2
In one line
What this Act says
The law on cheques, promissory notes and bills of exchange — including the famous Section 138 that makes a bounced cheque a criminal offence.
Penalties
What happens if you break it
Cheque dishonour for insufficient funds (Section 138)
§138Imprisonment up to 2 years and/or fine up to twice the cheque amount.
Offences by companies
§141Person in charge at the time deemed guilty unless due diligence proven.
Dishonour of electronic fund transfer for insufficient funds
§138 (extended)Same as §138 — up to 2 years' imprisonment + fine up to twice the amount.
Headline offences only — not exhaustive. For the full text and every section, open the source PDF or the official link below.
Key Sections & Penalties
Negotiable Instruments Act at a Glance
| Section | Type | Provision | Applicability | Details / Penalty |
|---|---|---|---|---|
| §4 | definition | Promissory note defined | - | Administrative / Structural |
| §5 | definition | Bill of exchange defined | - | Administrative / Structural |
| §6 | definition | Cheque defined | - | Administrative / Structural |
| §15 | structural | Indorsement | - | Administrative / Structural |
| §138 | criminal | Cheque dishonour for insufficient funds (Section 138) | - | Imprisonment up to 2 years and/or fine up to twice the cheque amount high RISK |
Maximum punishments as prescribed by the Act. Actual sentencing depends on facts, prior convictions and judicial discretion.
Sources
Read the Act yourself
We always show you the local source PDF and at least one verifiable online reference, so you can check anything we say.
Source PDF
Negotiable Instruments Act, 1881.pdf
Full text · opens in new tab
Reference
Wikipedia
en.wikipedia.org · opens in new tab
About this Act
Quick facts
- Year
- 1881
- Sections
- 147
- Chapters
- 17
- Tier
- Tier 2