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Cheque Bounce Notice

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What is Cheque Bounce?

Section 138 of the Negotiable Instruments Act, 1881 governs cases of returned cheques. A cheque bounces when the bank refuses payment. When a cheque is rejected by the bank, it’s deemed dishonored or bounced. Common reasons include incorrect signatures, discrepancies in written figures (words and numerals), and alterations, which can often be resolved without legal intervention. A significant concern arises when a cheque bounces due to insufficient funds.

Upon receiving a bounced cheque, you have two choices. First, you can issue a demand notice to the issuer. If there’s no response within 15 days, you can proceed to file a complaint in court.

Moreover, failing to take action against the defaulter within the stipulated time can result in a lack of recourse for the cheque recipient, as the statute of limitations applies to cheque bounce cases. Therefore, prompt addressing of cheque bounce cases is crucial to mitigate potential repercussions.

Procedure for a Cheque Bounce Case

Step 1: Initiate the process by sending a Demand Notice to the individual responsible for the bounced cheque.

Step 2: The notice should comprehensively detail the cheque’s particulars, including issuance date and an annexed copy of the dishonored memo.

Step 3: Provide a 15-day window from the notice’s receipt for the defaulter to effect payment.

Step 4: In the event of non-compliance, proceed to file a meticulously prepared complaint adhering to the prescribed format within the court.

Step 5: Concurrently, furnish an affidavit, the dispatched notice’s copy with acknowledgment, a memo photocopy, the received bounced cheque, along with the filed complaint.

Step 6: The judicial authority reviews and validates the submitted documents upon receiving your complaint.

Step 7: Upon satisfying the requisites of your cheque return case, the complainant or their legal representatives complete the requisite “bhatta” or cheque bounce case process form. The accused is subsequently summoned to attend court.

Step 8: Failure of the accused to appear in court empowers the judge to issue a bailable warrant against the implicated party.

Legal Action for Cheque Bounce Case

Cheque bounce is classified as a criminal offense in India, falling within the purview of Section 138 of the Negotiable Instruments Act, 1881. Upon lodging a complaint and subsequent conviction, the defaulter can be subjected to imprisonment for up to two years and/or a fine, potentially amounting to double the value of the bounced cheque.

In certain instances, the court might impose punitive measures for cheque bounce cases, particularly when the court deems the transgression to be particularly egregious.

Documents Needed for Cheque Bounce case

When initiating a complaint against a party involved in a cheque return case, it’s imperative to furnish an application form accompanied by the subsequent documents:

  1. The authentic original cheque.
  2. A memo elucidating the cheque’s return, delineating the grounds for the bank’s non-payment.
  3. A replica of the issued demand notice along with the original receipts.
  4. A sworn affidavit that substantiates the presented evidence.

Cheque Bounce Rules

When initiating a cheque bounce case, adherence to specific rules is paramount:

1. Commence by dispatching a demand notice to the defaulter.
2. Subsequent to notice receipt, the defaulter is granted a 15-day window to fulfill the outstanding payment.
3. As stipulated by Section 138 of the Negotiable Instruments Act, 1881, the payee must serve the drawer with a notice within 30 days of obtaining the cheque return memo.
4. Non-compliance by the drawer mandates the aggrieved party to file a complaint in court. This involves submitting a written complaint accompanied by substantiating documentation.
5. Of paramount significance is the bank’s cheque return memo—a pivotal document without which the court’s proceedings cannot proceed.
6. It is noteworthy that the provisions of the cheque bounce law do not hold the defaulter liable if the bounced cheque was either gifted or extended as a loan payment.

How to Issue Cheque Bounce Notice?

In the event of receiving a bounced cheque, you possess the right to initiate legal measures against the cheque’s originator. The initial step in this process involves transmitting an official notice regarding the bounced cheque to the issuer, stipulating the demand for payment of the outstanding sum. Here is a guideline on sending a notice pertaining to a bounced cheque:

  1. Draft a Demand Notice: Initiate the procedure by formulating a demand notice specific to the bounced cheque incident. This notice should encompass key particulars including the cheque’s number, associated amount, rationale behind the dishonor, and an explicit demand for settling the outstanding payment.

  2. Dispatch the Notice: Transmit the duly prepared notice to the cheque issuer, utilizing registered post or personal delivery, while ensuring the procurement of substantial evidence of delivery.

  3. Await Responsiveness: Subsequent to the issuer’s reception of the notice, a stipulated period of 15 days ensues within which they are obligated to effectuate the payment. Non-compliance within this timeframe can furnish grounds for the initiation of legal proceedings.

It is imperative to underscore that the formulation and transmission of cheque bounce notices should be undertaken exclusively by legal professionals or individuals well-acquainted with the intricate legal protocols inherent in the process.

Circumstances of Cheque Bounce

A cheque bounce notice is issued in instances where a presented cheque is dishonored due to inadequate funds. This compels the cheque issuer to settle the outstanding amount. Prior to dispatching a cheque bounce notification, certain prerequisites need to be fulfilled:

1. The cheque must fall within its three-month validity period, encompassing the timeframe within which it should have been presented to the bank.
2. The cheque should have been returned by the bank owing to reasons such as insufficient funds, signature disparity, or similar discrepancies.
3. The issuance of the notice is mandated within the initial 30 days subsequent to receiving notification of the cheque bounce incident.

Upon fulfillment of these criteria, the process of issuing a cheque bounce notice can be initiated.

Cheque Bounce Notice Format

A cheque bounce notice is a legally binding document that necessitates the settlement of the outstanding sum linked to a dishonored cheque. Below is a standardized structure for a cheque bounce notice:

– Your personal details including name and address
– Date of issuance of the notice
– Name and address of the cheque issuer
– Comprehensive particulars of the bounced cheque, encompassing cheque number, issuance date, amount, and the underlying cause for the bounce
– A stipulation of 15 days from the notice’s receipt for the payment demand
– An assertion of potential legal recourse in case of non-compliance within the stipulated timeframe.

It’s noteworthy that the configuration of a cheque bounce notice may exhibit variations contingent upon specific circumstances and prevailing legal prerequisites.

Contents of Cheque Bounce Notice

The cheque bounce notice should encompass the subsequent elements:

  •  Comprehensive details of the cheque, encompassing the cheque number, issuance date, amount, and the bank upon which it was drawn.
  • Explicit elucidation of the bounce’s rationale, which may stem from insufficient funds, incongruent signatures, or analogous grounds.
  • A formal demand for the settlement of the due sum, encompassing the principal amount, interest, and any associated charges.
  •  An unequivocal advisory regarding the imminent initiation of legal proceedings should the payment not be executed within the designated timeframe.
  • Dispatch of the legal notice must be executed through registered post, with due retention of the proof of delivery.

It remains imperative to meticulously draft the cheque bounce notice, ensuring alignment with pertinent legal requisites and comprehensive inclusion of relevant particulars. Seeking guidance from Legal Experts is strongly advocated to address any inquiries concerning the process, enabling the adept drafting of the legal notice.

Frequently Asked Questions (FAQs)

Find answers to common queries about our online complaint help in our Frequently Asked Questions (FAQs) section.

A legal notice of recovery of dues is a formal communication sent by a creditor to a debtor, demanding the repayment of outstanding financial obligations within a specified time frame.

This notice is used when a creditor wants to recover unpaid dues, such as unpaid bills, loans, or invoices. It serves as a preliminary step before considering legal action.

What Information is Typically Included in the Notice?

The notice typically includes details like the names and addresses of both parties, the amount owed, the original agreement terms, the due date, a description of the debt, and a warning of potential legal action.

Sending a legal notice is not always mandatory, but it’s often a recommended initial step to demonstrate intent and give the debtor a chance to settle the matter without going to court.

If the debtor ignores the legal notice and doesn’t respond or comply, the creditor might consider taking further legal action, such as filing a lawsuit to recover the dues.

If you require professional legal assistance, guidance, or representation, Online Complaint Help is here to help. Our Online Complaint Help services are designed to provide you with convenient access to experienced legal experts who can assist you in resolving various legal matters. Whether you’re facing a legal dispute, seeking advice on compliance, or navigating complex regulations, our team is dedicated to supporting you every step of the way.

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