Notice for Cheque Bounce

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INTRODUCTION

A cheque bounce is when an unpaid cheque is returned back by the bank, also known as dishonour of cheque. Cheque bounce can eventuate because of a lot of reasons, for instance, due to insufficiency of funds in the account of the ‘drawer’ and many other reasons. The bank always issues a cheque return memo with the necessary reasons for non- payment as soon as the cheque gets bounced. In India a cheque bounce is a criminal offence stipulated under Section- 138 of the Negotiable Instruments Act, 1881. However, in case of a cheque bounce, the aggrieved party can file a criminal as well as a civil suit against the accused. Sending a Legal Notice to the opposite side, is the first step to be taken.

PROCESS

The contents of the Cheque Bounce Notice are as follows:

  • The name and address of the drawer of the cheque and the payee.
  • Information of the cheque presented to the bank for payment including the details of the cheque number, date and
  • Date of return of cheque and Reason for cheque bounce.
  • Request for the immediate arrangement of the payment of the amount.
  • Reference of Section 138 of the Negotiable Instruments Act.

A well drafted legal notice on the letterhead of the advocate, must be sent to the payee using Email or through registered post.

ADVANTAGES / FEATURES

  1. It helps to initiate criminal or civil proceedings against a party who has defaulted you.
  2. It helps to recover money which would have otherwise been lost, from the defaulting party.
  3. After the whole trial process, If found guilty, the accused can be punished with a monetary penalty which may be double of the amount of cheque or imprisonment up to 2 years or both.

DOCUMENTS REQUIRED

  1. Original Cheque
  2. Photocopies of the cheque returned by the bank, memo.
  3. Copy of the legal notice for demand sent to the drawer and the acknowledgment slips/ receipts
  4. Original Postal Receipt and Copy of Acknowledgement of due service
  5. Proof of lawful debt or liability
  6. Authorisation letter / Power of Attorney

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