Your loan becomes an NPA with a bank. Notices start coming for recovery. Now if a cheque against the same loan gets bounced and you receive a notice for that as well. Can Bank go for both the things? Yes. A case where cheque bounce is filed for an NPA loan can run simultaneously with the recovery proceedings. This is because the Debt Recovery Tribunal will look into its recovery/SARFAESI jurisdiction and the Court of Criminal Jurisdiction will decide on whether the cheque falls under Section 138 of Negotiable Instrument Act 1881. This will impact a debtor when they receive both notices. If they respond to banks recovery they cannot rely on it for defending themselves in the Cheque Bounce case. Same goes for defending a mortgage property in cheque bounce case. If you are a businessman based out of Noida and your loan is made irregular by the bank. The bank starts proceedings for recovery and presents a cheque which was issued at the time of availing the loan. You say that the cheque was for security purposes and Bank says that you have defaulted in your payment. There is no straight answer to this question. One would have to analyse all the circumstances surrounding the loan, liability, presentation of cheque and notices etc. When money is tight people tend to take quick decisions. Be it ignoring one of the notices or agreeing to an ambiguous agreement or filing a petition before the DRT and assuming that nothing else will happen. Knowing about these aspects can help you make better decisions. Many borrowers in Delhi NCR Mumbai Bengaluru and other commercial hubs will find themselves with multiple claims out of one credit facility. With varying case numbers and hearing dates it can become confusing. Perhaps they have a house to think about. Perhaps a Director has himself to think about or perhaps its a company who needs time to recover monies owed. It would be ideal if all notices could be sent to BK Singh Advocate at the same time to allow proper advice. There may be different dates to comply with whilst negotiating settlements. Being able to advise correctly and keep an account of proceedings and know what you stand to gain is the aim. When the cheque issued towards an NPA loan bounces and the bank files a case under section 138. Then it becomes an NPA loan cheque bounce case. Whether the loan is classified as NPA is another question which depends upon its current position. If the debt is enforceable and the NI act requirements are complied with the person is liable to pay. BK Singh Advocate will look into if the cheque was for installment or recalled amount or something else. He will find out how much is payable towards the loan as per agreement and payment history. Yes. Usually the lender can file for debt recovery if its eligible and also file a 138 complaint. As these remedies are meant to solve different issues there is nothing wrong in filing both. Each proceeding would have its own set of requisites which the borrower should look into. Jurisdiction and available defences should be looked at individually for each proceeding. In a recent decision the Delhi High Court allowed both SARFAESI and NI Act to co-exist. Quashing cannot be granted just because the other proceeding exists. BK Singh Advocate may be able to differentiate between an objection to the computation of recovery and the objection to a cheque complaint. There may be certain documents that will aid you in both instances but the remedy you are asking for is different. You have a jurisdiction to recover your debts from a DRT under RDDBA 1993. Whether you are eligible or fall under its jurisdiction is another matter. Not all lenders can approach a DRT. indiacode. Section 138 relates to a dishonoured cheque that was given in discharge of any legally enforceable debt or other liability. There are certain requirements that have to be fulfilled by the lender. Simply returning a bank memo will not amount to commission of offence. The demand notice normally has to be sent within 30 days from the date the drawer comes to know about the dishonor. From there on he has a span of 15 days to make the payment. As per section 142 the complaint can be filed within one month of the date on which the cause of action accrues provided condonation is allowed. BK Singh Advocate would need to look at the actual dates on which the service took place and the complaint filed. It cannot be based on what the borrower tells you. In case this applies. There is a notice of demand as per section 13(2) for a span of 60 days. From there the person aggrieved can approach the DRT under section 17 within 45 days from the action taken as per section 13(4). There is a difference between sending a notice of demand and taking action to take possession. The cause of action has to be properly identified when approaching the tribunal. BK Singh Advocate will be able to tell you which document to act upon. Just because you call a cheque as security it does not put an end to your section 138 complaint. Security cheque could have been issued which would be honoured on due date of the money to be repaid. So what becomes important here is to see what liability existed at the point of presentation and what was the agreement between the two parties and if any amount was paid towards the said liability. In Sunav Steel Private Limited v. State of NCT of Delhi the Delhi High Court discussed about security cheques. Where there was a parallel proceeding under SARFAESI Act. Which again will throw light on the agreement made between the parties while taking the loan. BK Singh Advocate can help you find out if the cheque was dishonoured as per the lending agreement. You can't just mention it as blank cheque or security cheque and be left with that question. When part payment happens prior to presentation it may change the debt for which cheque is payable. This has been considered in case of Dashrath bhai Trikam bhai Patel v. Hitesh Mahendra bhai Patel. What is recorded under section 56 becomes very important here. The dates and amount become crucial. Once payment happens after dishonor you have to make sure BK Singh Advocate gets confirmation of transfer and how much has been allocated towards the cheque. These scenarios are different and need to be separated from one another. Payment against recovery should be matched with each other as well. One cannot collect for the same dues twice when you have parallel proceedings going on. Have one file with following in sequence order. You can use BK Singh Advocate to help you verify what the bank is claiming in various forums. Screenshot will show that payment was made. But when was it made? To whom was it paid and how did they adjust against loan amount. Originals should be kept with you. Provide entire documents instead of few pages which may hide important terms/annexures. Talk to a lawyer once you receive a cheques demand notice. Or if you receive a notice of a complaint, summons for possession or the bank offers a settlement in the pendency of your case. If you think the cheque is more than your dues. There has been non payment or you company official has been impleaded you should consult with a lawyer. You can get BK Singh Advocate to look into these issues. So you don't give contradictory statements in various proceedings. Do not take a verbal promise from your recovery person as a extension of time in court. One can take help of BK Singh Advocate from Cheque Bounce Lawyer for cheque complaint related documentation and further assistance with linked case. One should ensure the important dates and debts are matched accordingly. Each forum will have different reliefs that one can seek. Settlement should be treated with similar importance. Ensure that settlement contains all information such as amount to be paid, tenure of payment, what happens to securities and what steps are required in ongoing case. No internal links could be found which were verified on same domain. So no internal links were added. Not necessarily. Its related to the loan being classified as NPA. You have to establish a liability that is payable, a cheque dishonoured and fulfil all the conditions mentioned under section 138 to file a complaint. Mostly yes. Both the proceedings can co-exist subject to payment and recovery done in due course. No there is no automatic suspension of proceedings. BK Singh Advocate would look into the order and see if there is any impact on other proceedings and what does it apply to. Not every cheque dishonour leads to an offence. It just so happens that the word security was used. We need to see the liability created, enforceable amount and if the statutory conditions are fulfilled. Do not come to that conclusion. There needs to be an adjustment of amount received from auction and you will need to look at the status of your complaint at that point of time. You cannot choose not to follow court orders because you are discussing with the bank. Take advice if you can get an exemption or attend in some other capacity. Its possible that there are conditions to payment which you need to be aware of. Also make sure that the process is done correctly before court. Yes BK Singh Advocate will need to look into both the recovery and the cheque case file. Keep record of payments and offers made. No there are certain requirements that you need to satisfy before you can write off your loan. Depends on what you were acquitted of. It's always better to have records. Make sure that they are submitted in the proceeding where it can help you out. If you have a cheque bounce case related to NPA loan you must deal with both the loan and cheque bounce case. They cannot be interchanged with each other. You can reach BK Singh Advocate with full records of your loan, NGT Lawyers notices and papers. It would be beneficial to go through the file at an earlier stage so you can understand the timeline and if there is any accounting discrepancy. Also will help you take a stand whether to fight the case or compromise. NPA Loan Cheque Bounce Case DRT and NI Act Overlap Explained?
Why This Issue Matters Across India in 2026
Quick Facts
What Is an NPA Loan Cheque Bounce Case?
Can DRT Recovery and a Cheque Bounce Case Continue Together?
Proceeding Purpose Forum Bank recovery application that you are eligible for To adjudicate on and recover your debt DRT If you want to object to steps taken under SARFAESI To scrutinise if measures are legal DRT Filing a 138 complaint To determine if the accused committed offence of cheque bouncing Appropriate criminal court Which Legal Provisions Control the Dispute?
Section 138: liability and notice
SARFAESI: enforcement of security
Does Calling It a Security Cheque Provide a Defence?
What If the Bank Has Already Received Part Payment?
Documents and Evidence Checklist
When Should You Consult a Lawyer?
How Cheque Bounce Lawyer Can Help
Frequently Asked Questions
1. If an account is declared NPA will there be an offence for dishonour of cheque?
2. Can Bank initiate recovery as well as cheque proceedings against same loan?
3. Will the cheque case be suspended once you file your application before DRT?
4. All cheques issued as security will be punished?
5. Once property is auctioned the case is over?
6. I am under discussions with bank can I not respond to summons?
7. I have given an offer to settle the dues will my case be withdrawn?
8. Do I need to give both file copies?
9. Once acquitted from criminal proceedings my loan is written off?
10. Can the bank not consider my payments in two different proceedings?
Final Thoughts
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