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LEGAL NOTICE TO CHEQUE BOUNCE

When a cheque is returned by the bank unpaid, it is said to be dishonoured or bounced. Cheque bounce could occur due to several reasons such as insufficiency of funds, etc. When the cheque is bounced for the first time, the bank issues a ‘cheque return memo’ along with reasons for non-payment. Cheque bounce or cheque non-payment in a serious offence in India punishable with imprisonment or fine under Section 138 of the Negotiable Instruments Act. In case of cheque bounce, a cheque beneficiary must present the cheque issuer with a cheque bounce notice under section 138 within 30 days of return of the cheque to protect his/her rights under Section 138 of the Negotiable Instruments Act. For more adept legal help or information regarding how to send legal notice for cheque bounce, connect to us for an expert legal consultation through Easydrafting in Noida, Greater Noida and Noida Extension.

When & Why Does Cheque Bounce Happen?

There are 7 reasons why you are susceptible to have a cheque bounce or receive a legal notice for it, such as:

  1. Cheque bounce normally happens due to insufficient funds in the bank account of the person who issued the cheque.
  2. It can also occur if the signatures on the cheque do not match with the original signature of the person who issued the cheque, much happens in the case of minors holding a bank account.
  3. The other reason is that the date on the cheque has expired, meaning the date is more than 3 months old from the current date since the validity of a cheque is up to 3 months.
  4. Post Dated Cheques (PDC) is another contributing factor to having a legal notice against cheque bounce. PDC are cheques issued for a future date that is being deposited earlier than they are due.
  5. If the cheque is not in a good condition and is damaged, torn or disfigured, where some details are not clearly visible or if it has too many stains for whatever reasons, then these types of cheques will bounce.
  6. Any kind of scribbling, overwriting, correction etc on a cheque is not allowed, and if a cheque is found that way, it will be dishonoured. To avoid getting a legal notice for cheque bouncing, always issue a fresh cheque if you make a mistake while writing it.
  7. Overwriting on cheques without authentication and issuance of cheques that have expired validity are also reasons for cheque bounce. However, help from a good lawyer can be taken, only if a clear case of cheating can be proven. The legal route cannot be adopted if the issued cheque is against a donation or gift.

Initiating Legal Action for Cheque Bounce

The following steps must be followed to issue a cheque bounce notice and take legal action:

  • Cheque bounce notice must be issued by the payee to the defaulter, within 30 days of dishonor of cheque, by registered post (or Speed Post) acknowledgement due. The cheque bounce notice must be proper format, with information like nature of transaction, amount, date of cheque deposit, date of cheque bounce, reason for cheque bounce and request to make payment within 15 days.
  • If the cheque defaulter fails to make payment within 15 days of cheque bounce notice, the payee should file a criminal case in a court within 30 days from the expiry of notice period of 15 days. Cheque bounce complaints must be filed in a court in the city where the cheque was presented.
  • Once the case is filed, the court will hear the case and issue summons under Section 138 of the Negotiable Instruments Act.
  • The cheque defaulter would then have to submit surety and appear before the Court for resolution of the matter.

As Easy Drafting act as the client’s legal concierge providing technology solutions for lawyer discovery, price discovery and case updates.

With the use of technological solutions, we match the client’s requirements with the lawyer based on expertise, location etc.

Our dedicated team strives to connect you with the best experts in legal matters. We help you to do everything that it takes to make better-informed decisions.

We through Easy Drafting at Noida, Greater Noida, Noida Extension make you understand about the legal situation and equip you with all case requirements. Such that for any query regarding legal notice India, or any other legal matter, you are well-covered.

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