In case of a cheque bounce under Section 138 of the Negotiable Instruments Act, 1881, the payee (the person to whom the cheque is issued) can claim compensation for the dishonor of the cheque. The compensation and the remedies available are governed by the provisions of the Act and related sections. Here’s a breakdown of the compensation that can be claimed: 1. Criminal Liability: Imprisonment: The drawer of the bounced cheque can face imprisonment for up to 2 years or a fine that can be up to twice the amount of the cheque, or both. The payee can file a complaint in court for the dishonor of the cheque, and the court can initiate proceedings for criminal prosecution. The purpose of this penalty is to deter the dishonor of cheques and ensure payment. 2. Civil Liability: Recovery of the cheque amount: The payee can claim the full amount of the cheque (the amount for which the cheque was issued) if it is dishonored due to insufficient funds or other reasons. Interest on the amount: In addition to the principal amount, the payee can also claim interest on the outstanding amount, which is typically calculated at 18% per annum or as agreed upon in the contractual arrangement between the parties. 3. Compensation for Damages: Damages for mental harassment: If the dishonor of the cheque has caused mental harassment, the payee may seek compensation for damages. This is typically pursued through civil suits for breach of contract or under general tort laws for causing harm. The amount of compensation varies based on the severity of the situation, the inconvenience caused, and the financial loss suffered by the payee due to the dishonor. 4. Legal Expenses: The payee can also claim legal costs incurred during the process of filing the complaint or pursuing the case in court. The payee may seek reimbursement of the legal fees and other expenses related to the case. 5. Time Frame for Compensation: After receiving a notice of the cheque bounce, the drawer has 15 days to pay the due amount. If the drawer fails to make the payment within this period, the payee has the right to file a case in court. Once the case is filed and the drawer is convicted, the court can impose a fine that may be up to twice the cheque amount or imprisonment for up to 2 years, as mentioned earlier. 6. Cheque Bounce under 138 NI Act – Additional Considerations: If the drawer issues a cheque without sufficient funds or without authority, it is treated as an offense under the Negotiable Instruments Act. The payee can initiate legal proceedings by first sending a demand notice to the drawer, and if the drawer fails to pay within 15 days, legal action can be pursued. Conclusion: The payee in a cheque bounce case can claim several types of compensation, including the cheque amount, interest, damages for mental harassment, and legal expenses. If criminal proceedings are initiated, the drawer may face imprisonment, a fine, or both. The payee can pursue these remedies by filing a complaint under Section 138 of the Negotiable Instruments Act.

Complaint case under 138 NI Act is not meant for recovery. As per law the maximum punishment is penalty which can be double of cheque amount with cost snd expenses and also two years imprisonment. For recovery, complainant can file seperate suit.