A Legal notice is sent to the issuer in case of a cheque bounce due to lack of funds
We'll go over the possibilities, the process, and the timeline for taking action against a bounced check issuer.
We'll put you in touch with lawyers who will prepare and deliver a demand notice.
Our lawyers will draft a complaint if there is no response after 15 days.
Cheque bounce cases are governed by Section 138 of the Negotiable instruments Act, 1881. A cheque bounces when a bank doesn’t honour a payment. When a cheque is returned by the bank unpaid, it is said to be dishonoured or bounced. A few of the reasons are wrong signatures, mismatch of figures written on the cheque (in words and figures), and overwriting. These issues are minor and can be solved without the court’s intervention. A major cause for concern is when a cheque bounces due to lack of funds in the drawer’s account.
If you have received a cheque that has bounced, you have two options. You can send the person a demand notice and then, if there is no response after 15 days, you can eventually follow up by filing a complaint in the court.
To add to this, in case an action is not taken against the defaulter by the receiver within the prescribed time, it can also lead to lack of remedy for the receiver of the cheque as a case for cheque bounce is time-bound. Thus, it is important to address a cheque bounce case as soon as possible in order to avoid all the consequences involved.
Note: It is advisable to hire lawyers to assist you with filing a case. This is because lawyers are familiar with the entire process and how to fill out the form in the appropriate legal format.
Cheque bounce is a criminal offence in India, covered under Section 138 of the Negotiable Instruments Act. So, if a complaint is filed in a court and, 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.
In some cases, the court might grant both punishments, this is usually if the court finds the infraction heinous. Sometimes, the court may grant additional time for the payment of dues.
While filing a complaint against a party in a cheque bounce case, you need to submit an application form along with the following documents:
In case a person is filing cheque bounce case, there are certain rules they have to follow.
We at Vakilsearch are constantly working to make the legal process in India more accessible. We know the best practices and laws. Here are some reasons why you should choose us:
Note: For every issue or concern you may have, our experts will assess your situation and advise you on the best course of action.