Cheque Bounce for Advertisement Dues: Media Firm's Case

Your client ran a campaign worth ₹18 lakh, paid part of it, and handed over a cheque for the balance that came back marked "insufficient funds". The brand's marketing head has stopped taking calls, and the agency that placed the order says the invoice was never approved. That is the usual shape of a cheque bounce for advertisement dues, and it is also the case where the quality of your paperwork, not the merits of your campaign, decides whether you see the money.

Cheque bounce for advertisement dues: what Section 138 asks you to prove

Section 138 of the Negotiable Instruments Act, 1881 makes dishonour an offence, but only when the essentials are met. The cheque must have been drawn by a person on an account maintained by that person, for payment of money to another, in discharge of a legally enforceable debt or liability. It must have been presented within its validity, which in banking practice means within three months of the date written on it. It must have come back unpaid because funds were insufficient or because the amount exceeded the arrangement with the bank. And your notice must go within 30 days of receiving the bank's dishonour memo, with the drawer getting 15 days from receipt to pay before a complaint can be filed.

Two provisions work in the media house's favour. Section 139 presumes that the cheque was issued for consideration, so the burden of explaining why it was issued starts with the client, not with you. Section 140 removes a standard excuse: the drawer cannot argue that he had no reason to believe, when he signed, that the cheque would bounce.

A client's "stop payment" instruction also attracts Section 138, as the Supreme Court held in Modi Cements Ltd. v. Kuchil Kumar Nandi. A cheque returned because the account was closed sits in the same position in substance.

Proving the advertisement service behind the cheque

The debt has to exist independently of the cheque, so build the file from the commercial relationship outward. Start with the insertion order or release order, signed by the client or approved on email with the campaign dates, the inventory and the rate. Keep the rate card, and keep the specific discount or package recorded somewhere the client agreed to it. A verbal "we will work out a package" is where most disputes begin.

Next comes proof of running: telecast certificates, publication certificates, dated links and screenshots, ad-server reports or third-party measurement data. Then the tax invoices with GST details, and a statement of account for the running ledger. If the client has ever signed a balance confirmation, that single document is often worth more at trial than six emails. Chase payment in writing at least twice before presenting the cheque, because a paper trail of reminders makes it hard for the client to claim the amount was never due.

Common mistakes with the paperwork

• Booking campaigns on WhatsApp with no signed insertion order.

• Rate renegotiation done on the phone, with nothing on record.

• No proof of running, leaving the client free to claim the spots never aired.

• One consolidated notice covering six invoices and one cheque, which blurs the cheque amount.

• Filing the complaint in a district where neither party's bank branch sits.

Notice to the agency or the brand owner

The statutory notice goes to the drawer of the cheque, not to whoever you have a commercial relationship with. If the agency placed the order and the agency's cheque bounced, the agency is your drawer even if the brand reimburses it later. If the brand signed the cheque, notice to the agency alone achieves nothing. Where the drawer is a company, serve the company and the persons responsible for its business. Section 141 makes a director liable only if he was in charge of and responsible for the conduct of the business at the time of the offence (S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89), and a complaint against directors without impleading the company is not maintainable (Aneeta Hada v. Godfather Travels & Tours, (2012) 5 SCC 661).

A worked scenario

Konark Media Pvt Ltd, a Mumbai publisher, booked a six-week schedule for Adspire Communications, the agency handling an ayurveda brand. The insertion order, signed on 5 November 2025 by Adspire's director, valued the campaign at ₹18,40,000. Adspire paid ₹6,00,000 in December, leaving ₹12,40,000. Against that, it issued a cheque for ₹10,00,000 dated 10 March 2026 on its company account.

Konark presented the cheque at its own bank branch in Mumbai on 18 March. It was returned on 20 March 2026 with the remark "funds insufficient". Konark issued notice on 15 April 2026, the 26th day after the memo, addressed to Adspire and its two directors, demanding ₹10,00,000 within 15 days and attaching the statement of account. Adspire replied on 28 April offering ₹9,00,000 and citing lower impressions. Konark filed the complaint on 25 May 2026 before the Magistrate where its bank branch is located, as Section 142(2) requires, and applied under Section 143A for interim compensation of 20%, that is ₹2,00,000. A separate summary suit was filed for the ₹2,40,000 the cheque did not cover.

When a director signs a personal cheque

If the cheque is drawn on the director's own account, he is the drawer and Section 138 liability attaches to him personally. The company does not automatically become an accused in that offence, and the words "for and on behalf of" printed above his signature do not change whose account was debited. Your notice should therefore name him in his individual capacity and demand payment from him. The reverse is equally important: where the cheque belongs to the company and the director merely signed as authorised signatory, the cheque is still the company's, and you must follow the Section 141 route and implead the company.

When the client says the invoice is disputed

A genuine dispute about whether the debt exists at all can defeat a complaint, and courts are alert to invoices quietly raised after the relationship soured. But there is a difference between a dispute recorded before the cheque was issued and one manufactured after the notice. A make-good claim that appears for the first time in the reply, an allegation that some spots ran at 2 a.m., or a complaint about a ratings shortfall will not by itself displace the Section 139 presumption. The drawer has to lead evidence to rebut it, and that is a matter for trial.

If you received a part payment after dishonour, disclose it and quantify it. The complaint proceeds on the cheque amount, but the balance belongs in the civil suit; mixing the two in the criminal complaint invites an argument that the cheque was not for a settled sum.

Recovering the money and stopping the campaign

Section 138 is a criminal remedy, not a collection agency. On conviction the punishment is imprisonment up to two years, or a fine up to twice the cheque amount, or both, and the court may order compensation. Two provisions shorten the wait. Section 143A lets the Magistrate direct interim compensation of up to 20% of the cheque amount during trial, payable within 30 days. Section 148 requires an appellate court to consider a deposit of at least 20% of the fine or compensation before hearing an appeal. Compounding is permitted under Section 147, which is why most of these cases end in a settlement rather than a judgment.

For dues the cheque does not cover, interest, and any make-good liability, use the civil route. Where the claim rests on written contracts, invoices and a dishonoured cheque, an Order XXXVII summary suit under the Code of Civil Procedure, 1908 usually produces a decree faster unless the client is granted leave to defend. If your media house is registered as a micro or small enterprise on Udyam, the MSMED Act, 2006 gives you a 45-day payment rule under Section 15, compound interest under Section 16, and a reference to the MSE Facilitation Council under Section 18.

On the business side, check the contract for a right to suspend credit, and stop the campaign in writing rather than by silence. Confirm which insertion orders are on hold and what will be released on payment. Continuing to run the spots weakens both the debt and any argument that the client's conduct caused the loss.

• Send the Section 138 notice within 30 days of the dishonour memo, by registered post and email, and preserve the receipt and tracking record.

• Address the notice to the drawer of the cheque, and to the company plus its responsible directors where the drawer is a company.

• Demand the exact cheque amount, not the entire ledger, and attach the statement of account.

• File the complaint within one month of the cause of action arising, in the court where your bank branch is situated.

• Apply for interim compensation under Section 143A at the earliest hearing.

• File an Order XXXVII suit for the dues the cheque does not cover.

• Suspend further advertising in writing and keep a dated record of the suspension.

If a cheque has already bounced, do one thing today: pull the bank's dishonour memo and count the days. If you are inside the 30-day window, issue the statutory notice now. Everything else, including proof of running, the ledger reconciliation and the civil suit, can be built while that clock is running.

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