Cheque Bounce in Delhi By Athulya - March 20, 2016 Last Updated at: Oct 30, 2020 0 1002 A recent proposal by the Government of India, to decriminalise ‘cheque bouncing’ cases, has come in for criticism from bankers and lawyers. Section 138 of the Negotiable Instruments Act criminalises cheque bouncing. Way back in 2008, the Law Commission estimated that there were 7.66 lakh pending cases before criminal courts under Section 138 in Delhi alone. If you face the issue of a cheque bounce in Delhi, send a demand notice to the party that wrote the cheque. The notice will threaten to initiate proceedings under the Negotiable Instruments Act (NI Act) if the amount due is not paid. If the drawer is an individual, the proceedings would happen under Section 138 of the NI Act. In case of a company, its managing director can be personally prosecuted under Section 141. Procedure for Sending the Demand Notice The demand notice must be sent within 30 days of receiving the ‘cheque return memo’ from the bank. The purpose of the notice is to demand payment and inform the issuer that he or she will be prosecuted if payment is not made within 15 days. It should contain: a) a statement that you presented the cheque within its period of validity; b) statement of debt or legally enforceable liability; c) information about the reason of dishonour of cheque (check the memo of the bank returning the cheque for this); d) calling upon the drawer to pay the amount due, and e) statement that you are giving the drawer 15 days to pay up or you will initiate legal action. Talk to Our Legal Experts Requirement for Filing Cheque Bounce Case The proof of service of the notice is very important – you can courier it if pressed for time but also send a copy through registered post or speed post. If not pressed for time, just the speed post is enough. If it is the 15th day and no payment has still been received, you have to file a complaint within 30 days before a magistrate in any of the following places: where the cheque was drawn; where the cheque was presented; where the cheque was returned by the bank; and where the demand notice was served by you. If during the validity of the cheque, after the demand notice has been sent, the drawer asks you to present the cheque again and it is yet again dishonoured, the drawer’s time limit under the demand notice does not increase. While the above-mentioned process is helpful in taking a defaulter to task, it may not always result in the recovery of the pending dues. Hence, one can file a separate civil suit for recovery of the cheque amount, along with the cost borne and the lost interest. 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.