A legal notice for cheque bounce is an imitation to the issuer of the cheque that legal action can be taken against you if the payment isn’t made on time and it requires the person to put forth details of the cheque and demand the reason of the occurrence. In this blog, you’ll understand the valid areas which can lead to your cheque being bounced and what are the remedies for the same.

When a cheque obtained from the drawer of the cheque is provided to the financial institution for price, and it receives rejected and back with the aid of using the financial institution unpaid, the cheque is stated to be “bounced”.

The drawer of the cheque is the individual that symptoms and symptoms the cheque for price of the quantity to the payee. The payee is the individual that gets the cheque and gives it to the financial institution for receiving the price of the quantity noted in it.

There are numerous motives wherein the cheque can leap, which include

• Incorrect date,

• mismatch of the figures and phrases of the price amount,

• mismatch of signature or broken cheque.

But those are minor motives for cheque leap, and therefore some other cheque may be issued with the aid of using the drawer rectifying the error withinside the cheque and pay the quantity to the payee.

Various other reasons for bouncing of cheque in which you can file a legal notice for cheque bounce are:

• Lack of Funds in the payers account
• Signature isn’t correct and hence the cheque bounces, this can also give rise to fogery
• Overwriting on Cheque such that the figures aren’t properly seen
• Disparity withinside the phrases and figures cited at the cheque like mentioning 1 lakh in number but writing 10 thousand in words.
• Mismatch in Account Number that’s written on the cheque
• Insolvency and insanity of the customer
• Presented at the incorrect branch where the account isn’t made
• Crossing restriction of overdraft (OD)

When the cheque is provided to the financial institution for price, and it bounces, the financial institution will go back the test together with a go back memo pointing out the cause for the go back. Where the financial institution rejects the cheque because of inadequate price range, then observe may be issued to the drawer, and prison movement may be taken towards him.

When the cheque bounces because of inadequate price range and is back with the aid of using the financial institution, the payee have to ship a prison observe to the drawer of the cheque asking to make the price. Cheque leap is an offence below Section 138 of the Negotiable Instruments Act, 1881 in India.

The prison observe acts as an intimation to the drawer of the cheque that the quantity noted withinside the cheque desires to be paid with the aid of using him, otherwise prison movement might be taken towards him below the Negotiable Instruments Act withinside the respective court

Format of Legal Notice for Cheque Bounce

How to draft a Legal Notice for Cheque Bounce and file a case?

• Filing a criticism notice before the Magistrate after the before the expiry of 15 days of receipt of legal notice for cheque bounce observation with the aid of using the drawer.
• The payee/complainant has to seem earlier than the courtroom docket and offer the information of the case. If the Magistrate is happy with the complainant’s statement, he’ll issue summons to the drawer for performing earlier than the courtroom docket.
• The drawer will receive or deny the information said with the aid of using the complainant. If the drawer denies the criticism, then the courtroom docket will continue with the crook trial of the case.
• The drawer/accused will document his statement, proof and arguments of each aspect to be offered to the courtroom docket so as to prove that the legal notice for cheque bounce was true and valid.
• If the courtroom docket unearths the drawer responsible of the offence of cheque bounce, the courtroom docket will by skip a judgement of conviction in opposition to the drawer for the offence of cheque bounce.
• The punishment for cheque bounce is imprisonment for a time period now no longer than years or a maximum which can amplify to two times the quantity of the cheque or each.
• A civil match also can be instituted in opposition to the drawer for a fee of the cheque quantity. In the case of the group of a civil match, the payee can’t problem a cheque bounce observer. The payee can handiest problem criminals observe for recuperation of the quantity.
• The offence of cheque bounce below Section 138 of the Act affords crook punishment for the motive of cheque bounce because of inadequate quantity, while the civil match for recuperation does now no longer punish the drawer and affords for handiest the recuperation of the cheque bounce quantity.

The cheque bounce observer may be issued in opposition to the organization, and a crook match may be initiated in opposition to an organization whilst the organization problems the cheque, and it bounces because of an inadequate quantity below Section 148 of the Act. When a crook match is initiated below Section 148 of the Act, the organization and its administrators can be punished for the offence of cheque bounce.

However, if the drawer will pay the cheque quantity to the payee within 15 days of receipt of the cheque bounce being observed, no workplace is dedicated with the aid of using him, and criminal motion can’t be instituted in opposition to him for cheque bounce below segment 138 of the Act.

What is the Legal Way to get clarification upon your bounced cheque and hence draft a legal notice for cheque bounce?

When the cheque bounces, step one is to ship the legal notice for cheque bounce to the drawer and request him to pay the quantity. If he does now no longer observe the note, then criminal movement may be taken towards him.

For starting up a criminal movement and submitting a form within the courtroom docket towards the drawer, the subsequent situations should be satisfied-

1. The payee must give the cheque within 3 months of the date of its issue. The financial institution must reject the cheque because of inadequate funds.
2. The payee makes a call for for the price of the cheque quantity with the aid of using issuing a cheque leap note in writing to the drawer with the aid of using post.
3. The cheque leap note should be despatched inside thirty days of the receipt of data of go back of cheque with the aid of using the financial institution.
4. The drawer fails to pay the quantity of cheque to the payee inside fifteen days of receipt of the cheque leap note.

If the above situations are satisfied, then criminal court cases may be initiated within the courtroom docket inside thirty days from the expiry of fifteen days term for cheque quantity price after receipt of cheque leap note with the aid of using the drawer. The in shape for cheque leap may be initiated within the courtroom docket of the metropolis in which the cheque becomes provided for price. The case can be filed below Section 138 of the Act.

What is Section 138 of the Negotiable Instrument Act, 1881?

Section 138 of the Negotiable Instruments Act offers that cheque soar for inadequate budget is an offence and punishable with imprisonment. It offers that wherein someone attracts a cheque on an account maintained with the aid of using him for the price of cash to any other individual, and it’s miles again with the aid of using the financial institution unpaid due to inadequate budget to honour the cheque, the drawer of the cheque commits an offence.

The individual should draw the cheque for discharge of any legally enforceable debt or liability. The cheque should be again with the aid of using the financial institution due to the fact the quantity of cash status to the credit score of the drawer’s account is inadequate or exceeds the quantity organized to be paid from the drawer’s account with the aid of a settlement made with the financial institution.

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