Matters we handle
- Advice for borrowers who cannot repay a loan: options, notices and next steps
- Complaints about harassment by recovery agents
- Cheque bounce complaints under section 138 of the NI Act, for payees and accused
- Replies and objections to SARFAESI notices
- Securitisation applications before the Debts Recovery Tribunal
- Recovery applications and defence before the DRT
- Loan and guarantee disputes
- Complaints to the RBI Ombudsman
Where these matters are heard
- Magistrate Courts in Hyderabad and surrounding districts, for cheque cases
- Debts Recovery Tribunal, Hyderabad
- Debts Recovery Appellate Tribunal
- RBI Integrated Ombudsman, for complaints against banks and NBFCs
- Telangana High Court
The law that applies
Cheque dishonour is an offence under section 138 of the Negotiable Instruments Act, 1881. The payee must send a written demand within 30 days of learning of the dishonour; the drawer then has 15 days to pay; and the complaint must be filed within one month after those 15 days end, in the court where the payee's bank branch is located.
Secured lenders act under the SARFAESI Act, 2002: a borrower who receives a section 13(2) notice has 60 days to pay and may object under section 13(3A). Measures taken under section 13(4) can be challenged before the DRT under section 17 within 45 days. The DRT hears bank recovery claims of ₹20 lakh and above under the Recovery of Debts and Bankruptcy Act, 1993.
How the process generally works
Check the dates
Cheque date, return memo, notice and service dates, or the date of the bank's notice.
Notice or reply
Statutory demand notice, or a reply and objection to the bank.
File or defend
Complaint before the Magistrate, or application before the DRT.
Hearing
Evidence, interim compensation or stay, and arguments.
Settle or conclude
Compounding, settlement or final order.
Documents to keep ready
- The cheque and bank return memo
- Copy of the demand notice with postal or courier proof
- Loan agreement and sanction letter
- All notices received from the bank
Terms you may hear
- NPA
- Non-performing asset: a loan on which payments are usually overdue for more than 90 days.
- OTS
- One-time settlement: an agreement with the lender to close a loan by paying a reduced lump sum.
- 13(2) notice
- The SARFAESI demand notice giving a borrower 60 days to repay a secured loan.
- 13(4) / possession notice
- The notice by which a secured lender takes possession of the secured property.
- OA in DRT
- An original application filed by a bank before the Debts Recovery Tribunal to recover dues.
- Cheque return memo
- The bank's slip explaining why a cheque was dishonoured; it starts the cheque bounce timeline.
Questions people ask
I cannot repay my loan. Is that a crime?
Being unable to repay a loan is ordinarily a civil matter, not a criminal offence. Criminal liability can arise in specific situations: a cheque given for repayment is dishonoured (section 138 of the NI Act), an auto-debit (NACH/ECS) mandate is dishonoured for insufficient funds (section 25 of the Payment and Settlement Systems Act, 2007), or the loan was obtained by fraud. Take advice early, before notices pile up.
What options do I have if I cannot pay my EMIs?
Write to the lender before the account is overdue for 90 days, when it is usually classified as a non-performing asset. Depending on the lender's policies, options may include rescheduling, restructuring or a one-time settlement. Any settlement should be recorded in writing, and a settled account can affect your credit report.
Recovery agents are harassing me. What can I do?
RBI directions prohibit recovery agents from intimidation and harassment, including threats, humiliating calls to your family or contacts, and calls outside 8 a.m. to 7 p.m. Keep a record of calls and messages and complain in writing to the lender. If the lender does not resolve it within 30 days, you can complain to the RBI Ombudsman at cms.rbi.org.in. Threats or abuse can also be reported to the police.
I received an arbitration notice or award for a personal loan. What does it mean?
Many loan agreements, especially with NBFCs, contain an arbitration clause. An award passed against you can be enforced like a court decree, and it can be challenged under section 34 of the Arbitration and Conciliation Act only within three months of receiving it, extendable by 30 days. Do not ignore arbitration notices.
What is the time limit for a cheque bounce case?
The demand notice must go within 30 days of receiving the return memo. After the drawer's 15 days to pay expire, the complaint must be filed within one month. Missing any of these dates can defeat the case.
Where do I file a cheque bounce complaint?
In the court with jurisdiction over the branch of the bank where the payee presented the cheque for collection, under section 142(2) of the NI Act.
Can a cheque bounce case be settled?
Yes. The offence is compoundable under section 147, and courts encourage settlement at any stage. The court can also order the accused to pay interim compensation of up to 20% of the cheque amount under section 143A.
I received a SARFAESI notice. What should I do?
Read it carefully and note the date. You have 60 days to pay or respond, and you can raise objections under section 13(3A), which the bank must answer within 15 days. Take advice before the period runs out.
Can I stop the bank from taking possession?
If the bank takes measures under section 13(4), you can file a securitisation application before the DRT within 45 days. The tribunal can grant interim relief depending on the facts and any deposit ordered.
This page gives general information about the law as it stands and is not legal advice. The right course in any matter depends on its facts.
Last updated: September 2026.