Section 138 (NI Act)

Section 138 (NI Act) Definition: Section 138 of the Negotiable Instruments (NI) Act deals with the dishonour of cheques (and by extension electronic clearing/NACH mandates) due to insufficient funds, classifying it as a criminal offense.

Why it matters in Debt Collection

• A legal notice must strictly be sent within 30 days of receiving the 'cheque return memo' from the bank.
• The borrower gets 15 days to pay the amount; failure allows the lender to file a criminal complaint.
• Automated debt collection software like CarmaOne mass-generates these notices flawlessly.