Part Payment After Cheque Bounce: Effect on Section 138

Your buyer's cheque came back unpaid, and three weeks later a smaller sum lands in your account with a WhatsApp message saying “part payment, balance soon”. You are now unsure whether accepting that money has weakened the case you were about to file. It has not, by itself. Part payment after cheque bounce does not wipe out the offence under Section 138 of the Negotiable Instruments Act, 1881. What it does change is the arithmetic, the wording of your demand notice and the way a magistrate reads your complaint. Each of those has a practical fix, and the deadline pressure is the part most payees misjudge.

Does accepting part payment waive the offence?

Section 138 does not stop at the bank's return memo. The offence is complete only when the drawer fails to pay within fifteen days of receiving a written demand notice. So the date of the part payment decides which of three situations you are in.

Paid before notice, balance cleared in time. If the drawer clears the entire cheque amount within fifteen days of receiving your notice, no offence survives to prosecute. Accepting the part payment was not a waiver; the full payment inside the statutory window is what ends the matter.

Paid after the fifteen-day window. By then the offence is already complete. Money arriving later does not cancel it. It becomes a mitigating fact relevant to sentencing or compounding, and it reduces what you can realistically recover.

Paid and accepted as “full and final”. This is the only situation where the money genuinely damages you. If your receipt, email or WhatsApp reply accepts the sum in full and final settlement of all claims, you have created an accord and satisfaction over the balance. The danger is the sentence you write on the receipt, not the bank transfer.

One point sits in your favour. The presumption under Section 139 that the cheque was issued for a legally enforceable debt still operates, and a debtor who has already paid part of the amount will struggle to argue there was no debt behind the cheque at all.

How part payment after cheque bounce affects the 30-day notice period

The thirty days under proviso (b) to Section 138 run from the date you receive intimation of dishonour from your bank. They do not pause while you negotiate, and they do not restart when a part payment arrives. A supplier holding an ₹8,00,000 cheque often spends three weeks bargaining over a ₹50,000 transfer and then finds the window has closed. That part payment has cost more than it was worth.

Once the notice is received, the fifteen-day payment window under proviso (c) begins. If the drawer pays the disclosed balance inside that window, the cause of action never matures. If he does not, it arises the day after the window closes, and the complaint must be filed within one month of that date under Section 142(1)(b). The proviso to Section 142 allows a delayed complaint, but a condonation application is an argument you can lose.

The working rule: negotiate and issue notice at the same time. One does not wait for the other.

Wording the demand notice

State the cheque number, date and full amount. Then record the part payment with its date, mode and reference, and call upon the drawer to pay the balance. A workable sentence: “You issued cheque no. ___ for ₹4,50,000, returned unpaid on ___. You have since paid ₹1,50,000 by RTGS on ___. The balance of ₹3,00,000 remains due under the said cheque.” Some practitioners instead demand the full cheque amount and adjust the credit only in the complaint. Both routes are used; the disclosed-balance route survives cross-examination better, because the drawer cannot accuse you of suppressing a payment you actually banked.

Do not rely on a second notice

Payees sometimes issue a fresh notice after a part payment and try to run a new fifteen-day period from it. Assume the safer position: a second notice does not revive a period that has already expired. Keep the original notice inside the thirty-day window and treat it as the one that matters.

What you can claim in the complaint

The complaint is about the cheque, so the cheque amount anchors everything. Keep three figures visible throughout the complaint, the affidavit and the chief examination: the cheque amount, the part payment received, and the balance claimed. Attach the bank statement or UTR advice showing the credit. A complaint claiming the full cheque amount without mentioning ₹1,50,000 already received hands the defence its first, and sometimes only, useful line of attack.

What you ask for and what a court gives differ. You may seek compensation on conviction, where the statutory cap under Section 143(3) is twice the cheque amount. You may also seek interim compensation under Section 143A, inserted by the Negotiable Instruments (Amendment) Act, 2018, capped at 20% of the cheque amount and payable within sixty days of the order. Where a third of the cheque has already come in, expect the court to ask why further interim compensation is needed, and expect a reduced figure or a refusal. That is a discretionary call, not a right.

A worked example

A Coimbatore textile supplier invoices a Surat buyer ₹4,50,000 on 14 December 2025. The buyer issues a cheque dated 12 January 2026. The supplier presents it on 5 February; it returns on 7 February with the remark “funds insufficient”, and the memo reaches the supplier the same day. The thirty-day notice window closes on 9 March 2026.

On 20 February the buyer transfers ₹1,50,000 by RTGS marked “part payment against invoice”. No settlement is signed. On 5 March, within time, the supplier issues a notice recording the cheque amount of ₹4,50,000, the ₹1,50,000 received and the balance of ₹3,00,000 demanded within fifteen days. The notice is delivered on 8 March. Fifteen days end on 23 March, nothing further is paid, and the cause of action arises on 24 March.

The complaint is filed on 10 April 2026 before the magistrate where the supplier's bank branch is located, which Section 142(2) permits, inside the one-month window ending 23 April. It seeks conviction, compensation of ₹3,00,000 and interim compensation under Section 143A. On that last request the court is told about the ₹1,50,000 credit; the 20% ceiling would be ₹90,000, but the supplier asks for a token amount instead and presses for an early trial date.

Using part payment as acknowledgment of debt

The criminal case and the money claim are separate tracks. Section 138 punishes dishonour; it does not by itself give you a decree for the balance, though compensation can be ordered on conviction. For the balance, a civil suit for recovery is the cleaner route, and money due carries a three-year limitation period.

Section 18 of the Limitation Act, 1963 gives a fresh period of limitation from the date of a written acknowledgment of liability signed by the debtor, provided it is made before the period expires. Two conditions matter: it must be in writing, and it must be signed. A bank credit is neither, though it is strong evidence when the accompanying message identifies the invoice or the cheque. A letter or email from the buyer saying “balance ₹3,00,000 will be cleared by June” is worth far more than the transfer alone. Electronic acknowledgments have been accepted where the sender's identity is established, so preserve the message, the sender's number and the original device.

If the three-year period has already run, Section 25(3) of the Indian Contract Act, 1872 makes a written and signed promise to pay a time-barred debt enforceable. That is why a signed settlement letter or balance confirmation is worth asking for even on an old debt. Do not let either document say “full and final”.

Settling after the complaint is filed

The offence is compoundable under Section 147 with the court's consent, at any stage. A private settlement signed between the parties does not close the case by itself. File a joint application, place the terms on record and get an order. Payees who shake hands in the corridor and go home often find the matter listed again six months later.

Three money risks follow a late settlement. Under Section 143A(3), if the drawer is acquitted, the payee must return any interim compensation with interest at the RBI's prevailing deposit rate, so a settlement funded by that money may have to be unwound. Under Section 148, an appeal by a convicted drawer requires a statutory minimum deposit of the fine or compensation awarded, and money already lying with the court must be factored into the arithmetic. And a receipt worded “full and final” at this stage will be produced by the defence at the next hearing.

If you must accept a part payment after filing, put it in writing: the sum is received without prejudice to the pending complaint, and the balance, interest and costs remain payable. Keep the complaint alive until the money actually clears.

Documents to keep and mistakes to avoid

Keep the cheque copy front and back, the bank return memo, your statement showing the part credit with the UTR, the debtor's message identifying the invoice, a ledger extract for that party, the demand notice with postal or courier proof and tracking, and every settlement or compounding document. Scan them into one folder the day they arrive.

The recurring mistakes are predictable. Missing the thirty-day window while chasing a part payment. Claiming the full cheque amount without disclosing the credit. Endorsing a receipt “in full and final settlement” to close an awkward conversation. Treating a criminal complaint as if it were a recovery suit. And assuming that because some money came in, the offence is over.

• Note the date the bank's return memo reached you and count out 30 days for the notice and 15 days for payment.

• Issue the demand notice within those 30 days even while settlement talks continue.

• Record every part payment by date, mode, UTR and the debtor's own message identifying the invoice.

• In the complaint, state the cheque amount, the sum received and the balance claimed, with the bank statement attached.

• Ask for a signed acknowledgment of the balance and keep “full and final” out of every receipt.

• If you settle after filing, move a joint compounding application and get a court order, not a handshake.

Open your bank statement today, mark the date the return memo reached you, and draft a notice that records the cheque amount, the part payment and the balance. If the thirty-day window is already close, send it tonight by courier with tracking and file the complaint within a month of the cause of action.

This article is for general information only and is not legal advice. Consult a qualified professional for your specific facts.