Cheque Bounce for Freight Dues: Transporter's Recovery

Your truck delivered the load, the consignee signed the proof of delivery, and the customer’s cheque for freight dues has come back unpaid. The bank return memo is in your hand, but the customer is not answering calls. For a transporter, a cheque bounce freight dues claim is only one piece of the recovery file. Under the Negotiable Instruments Act, 1881, a Section 138 complaint can be filed for a cheque dishonoured for want of funds, but the case stands or falls on whether you can show a legally enforceable freight debt. The lorry receipt, invoice, e-way bill and delivery proof do most of that work.

Freight Dues and the Transport Contract

A transporter’s claim begins with the contract of carriage. That contract may be a signed rate agreement, a standing order, a series of emails, or the terms printed on the lorry receipt. The customer books the truck, the transporter issues a lorry receipt or consignment note, the goods move under an e-way bill where GST rules require one, and the consignee signs a proof of delivery. The freight invoice ties these documents to a sum due.

Section 138 of the Negotiable Instruments Act, 1881 applies when a cheque is drawn for the discharge, in whole or in part, of any debt or other liability. Freight earned under a transport contract is a debt if the service was performed and the amount is admitted or proved. The cheque must be presented within its validity period, currently three months for most banks, and in any case before the statutory outer limit. The bank must return it unpaid, and the transporter must hold the original cheque and the return memo.

Two points decide most transporter cases. First, the cheque must relate to the freight debt, not to an advance for a future load or a security deposit. Second, the debt must be legally enforceable. If the customer has a genuine set-off for shortage, damage or late delivery, the cheque amount may not be the enforceable debt. Keep the claim clean before you reach the magistrate’s court.

Notice to the Customer and Consignee

The statutory clock starts on the day the transporter receives the bank’s dishonour memo. A written demand notice must be sent to the drawer within 30 days of that receipt. The notice should identify the cheque, the amount, the bank, the date of dishonour and the freight invoice. It should demand payment within 15 days of receipt and state that failure will lead to a Section 138 complaint.

Send the notice by registered post with acknowledgement due and by email to the customer’s known address. If the customer is a company, address the notice to the company and mark a copy to the directors you may arraign under Section 141. A copy to the consignee is useful commercial pressure, but the statutory notice must go to the drawer. If the consignee is a different entity, a copy does not substitute for notice to the customer.

The drawer gets 15 days from receipt of notice to pay. If the money arrives, the Section 138 cause of action does not arise. If it does not, the complaint must be filed within one month of the day the 15-day period expires. Under Section 142(2), the complaint is filed before the magistrate within whose local jurisdiction the payee’s bank branch is situated. That is usually the transporter’s own bank branch, not the customer’s office.

Evidence in a Cheque Bounce Freight Dues Case

Section 139 gives the court a presumption that the cheque was received for the discharge of a debt or liability. The presumption helps, but it is rebuttable. The transporter should build a file that answers the customer’s likely defence before the complaint is drafted.

The lorry receipt is the first document. It shows the consignor, consignee, goods, route, freight and date of booking. The e-way bill, where applicable, links the movement to GST records; it is a tax document, not a substitute for proof of delivery. The freight invoice states the amount due. The proof of delivery, signed by the consignee or the warehouse gate staff, shows that the service was performed. A weighment slip, unloading certificate, gate entry or driver’s trip sheet can fill gaps.

Keep the original cheque, the bank return memo, the notice, the postal receipt and the acknowledgement. If the customer paid part of the freight, the ledger and bank statement should show it. Under Section 143A, the court may order interim compensation of up to 20% of the cheque amount during a summary trial. That is a discretion, not an automatic payment, and it does not replace the final trial.

Documents to keep

• Original cheque and bank return memo.

• Lorry receipt or consignment note, signed by the driver and, where possible, the consignee.

• E-way bill, invoice, weighment slip and proof of delivery.

• Transport contract, rate agreement, booking emails or standing order.

• Demand notice with postal receipt, acknowledgement and email delivery record.

• Ledger extract and bank statement showing the freight due and any part payment.

Worked scenario

Ravi Transport, a Gurugram transporter, carried auto components to Pune for Anand Auto Parts. The lorry receipt dated 12 January 2026 showed freight of ₹1,45,000. The e-way bill matched the invoice. The consignee signed the proof of delivery on 15 January. Anand Auto Parts gave a cheque dated 10 February 2026 for ₹1,45,000. Ravi deposited it on 12 February; the bank returned it on 16 February with “funds insufficient”. Ravi sent a Section 138 notice on 20 February by registered post and email. Anand received it on 24 February. The 15-day period ended on 11 March. Ravi filed the complaint on 8 April before the magistrate at Gurugram, where its bank branch is located. It also filed a civil suit for interest and costs. The file had the LR, e-way bill, invoice, POD, cheque, return memo and postal proof.

When the Customer Disputes Delivery or Shortage

Freight disputes often come with a counter-allegation: the consignment was short, damaged, delayed or delivered to the wrong place. If the customer raises a genuine dispute before the cheque was issued, the cheque may not be for an admitted debt. If the dispute is invented after the cheque bounces, the transporter’s documents become decisive.

Suppose the customer says 200 kg of an 18-tonne load was short. The transporter should check the weighment slip at loading, the e-way bill quantity, the consignee’s unloading record and any shortage certificate. If the shortage is real, the enforceable freight may be reduced. A Section 138 complaint for the full cheque amount can fail if the court finds the cheque included a disputed sum. It is better to adjust the admitted shortage before the cheque is issued. If the cheque was already issued for the gross amount, the customer may argue that the debt was not crystallised to that extent.

Delivery to a third party without the consignee’s authority is a harder problem. The transporter then needs the customer’s written instruction, the consignee’s gate entry, or a subsequent acknowledgement of the delivery. Without that, the customer can argue that the freight was not earned. The same applies where the goods were returned or the consignment was refused. A returned consignment may still attract freight under the contract, but the transporter must show the contract term that makes it payable.

Civil Suit for the Balance and Section 138

Section 138 is a criminal remedy. It can end in a conviction, a fine or both, and it can pressure a customer to pay. It is not a decree for the freight. The transporter can also file a civil suit for recovery of the freight, interest and costs. The criminal complaint and the civil suit can run together; Section 138 does not bar a civil claim. In practice, the civil suit is where the money is recovered, while the Section 138 complaint supplies the leverage.

A civil suit needs the same documents, but the standard of proof is the balance of probabilities, not proof beyond reasonable doubt. The transporter can claim contractual interest if the rate agreement or invoice terms provide for it. If there is no written interest term, the court may award interest under Section 34 of the Code of Civil Procedure, 1908. Keep the invoices and ledger consistent. A suit that contradicts the cheque amount gives the customer an easy defence.

If the customer is a company, the complaint can arraign the company and the persons in charge of its business at the time of the offence under Section 141. The notice should name them or at least put them on guard. A director who was not in charge at the relevant time may get the complaint quashed, so the transporter should check the company’s master data and the correspondence before naming individuals.

Common mistakes

• Sending the notice before the bank’s return memo is received.
• Sending notice only to the consignee when the drawer is a different customer.
• Filing the complaint in the customer’s city instead of the payee’s bank branch jurisdiction.
• Claiming a disputed shortage amount without adjusting it in the ledger.
• Losing the original cheque or the proof of delivery.

Action checklist

• Keep the original cheque, return memo and bank statement together.

• Match the invoice with the lorry receipt, e-way bill and signed proof of delivery.

• Send the Section 138 notice within 30 days of the return memo by registered post and email.

• Diary the 15-day payment window and file the complaint within one month after it ends.

• File before the magistrate where your bank branch is located.

• Consider a civil suit for the freight balance, interest and costs.

• If the customer is a company, check the directors in charge before arraigning them.

The next time a freight cheque bounces, do not wait for the customer to call back. Diary the 30-day notice date and the one-month complaint date, and assemble the lorry receipt, e-way bill, invoice and proof of delivery before you draft the notice.

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