Cheque Bounce Case In Bangalore

Last Updated at: September 28, 2019
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What do you do when your payment cheque bounces? How do you send a demand notice? What are the requirements for sending it? How much does it cost to file a demand notice? This article on cheque bouncing gives a concise answer to each of these questions.

Cases of cheque bounce are not uncommon. A cheque can be dishonoured for various reasons, the most common being insufficient funds in the account of the person drawing the cheque and a mismatch of signatures with the bank records. In case of a cheque bounce in Bangalore, send a demand notice to the party that issued the cheque. This notice will threaten to initiate proceedings under the Negotiable Instruments Act (NI Act) if the amount due is not paid.

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PROCEDURE FOR SENDING THE DEMAND NOTICE

When a cheque bounces the first time, the bank issues a ‘cheque return memo’, stating the reasons for non-payment. The holder can resubmit the cheque to the bank within three months of the date on it, if he believes it will be honoured the second time. The other option would be to prosecute the defaulter legally. The first step is to send a legal notice to the defaulter within 30 days of receiving the cheque return memo. All the relevant facts of the case, including the nature of transaction, amount, date of depositing the instrument in the bank, and subsequent date of dishonouring, should be clearly mentioned in the notice.

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REQUIREMENT FOR FILING CHEQUE BOUNCE CASE

If the cheque issuer fails to make a fresh payment within 30 days of receiving the notice, the payee has the right to file a criminal complaint under Section 138 of the Negotiable Instruments Act. However, the complaint should be registered in a magistrate’s court within a month of the expiry of the notice period. If you fail to file the complaint within this period, your suit will become time-barred and, hence, not be entertained by the court unless you show sufficient and reasonable cause for the delay. On receiving the complaint, along with an affidavit and relevant paper trail, the court will issue summons and hear the matter. If found guilty, the defaulter can be punished with a prison term of two years and/or a fine, which can be as high as twice the cheque amount. These legal remedies are available only where pending debt or liability can be clearly established. Hence, if a bounced cheque was issued as a donation or as a gift, the holder cannot legally sue the defaulter.

COST OF CHEQUE BOUNCE CASE

The cost of sending the demand notice in Delhi will be around Rs. 750; if you are capable of doing this yourself, you may do so. However, for representing you in court, a lawyer, depending on experience and competence, will charge you anywhere from Rs. 1000 to Rs. 20,000 per hearing.

When your payment is stopped due to a cheque bouncing, you can send a demand notice to the party that issued the cheque. The notice threatens to start proceedings under the Negotiable Instruments Act if the amount due is not credited. A criminal complaint can be lodged if the cheque issuer fails to send a new one.

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