Legal Notice For Cheque Bounce

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Legal Notice for Cheque bounce

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According to Section 138 Dishonor of cheque where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment.

Parties to the Cheque

Drawer: The person who issues the cheque i.e., ‘author of the cheque’ is called as Drawee.

Payee: The person to whom the amount mentioned in cheque is payable i.e., the person in whose favor the cheque is drawn is called as Payee. (Payee could be the Creditor)

Drawee: The Bank where the Drawer has an account from which the cheque amount shall be paid i.e., the bank who is directed to pay the amount is called as Drawee.

Payee’s Bank: The Bank where the Payee has a bank account in which the cheque amount shall be deposited/credited (especially in case of crossed cheque) or the bank in which payee deposits the cheque is called as ‘Payee’s Banker’

What is meant by Cheque Bounce or Dishonored Cheque?

The occurrence of the price of the following event step by step to check the jump or embarrassment check:

  1. The Drawer is responsible for paying a certain amount to the Payer and thus issues a Check on behalf of the Payable.
  2. The Taxpayer / Check Owner then deposits this Check into the bank where he or she has an account or otherwise. A check will be made on or after the date specified in the check but will not be deposited within 30 days from the date stated on the check, as it will not be valid.
  3. After installing the Check in the account, if Drawee finds that it is not possible to pay the amount stated in the Check, it sends a ‘Refund Check Check’ to the payer. The paid bank manager then forwarded the ‘Check Refund Memo’ to the Payer informing him or her that the Check has been despised.
  4. Thus, the Drawer’s inability to pay the Payment Check Payment on the due date or upon delivery / deposit, is called a Check Shame.

How do you come to know that the cheque is bounced?

If Drawee Bank finds that it is unable to pay the check amount to the payer for any reason, Drawee Bank immediately issues a ‘Check Return Memo’ to the Payment Bank stating the reason for non-payment. The Paymaster & bank manager then gives the Paymaster an unqualified check and memo.

What is the reasons for Cheque Bounce?

The reason for the bashing bout may be many but this one is listed under section 138 of the Negotiable Instrument Act, where you can send a Notice issued on our website to a non-payable borrower (Drawer) with ‘Insufficient Balance‘ in a Draw account.

Resubmission of the dishonored Cheque

If the payer or person in charge of the check believes that the check, once debited, will be refunded a second time, he or she may resend the check within 3 (three) months of the date stated on the check.

However, if the drawer fails to pay and the check is found to be unethical, the payer has the legal right to lodge a complaint against the drawer and start prosecution for that draw.

Step by Step procedure for prosecution in case of Cheque Bounce

The following is the prosecution in the event of a defamation check:

  1. First, after disrespecting the check, you will be given a chance in the closet in the form of a written notice to immediately pay the amount of the check.
  2. Such Notice will be sent within 30 days of receipt of the ‘Return Check Memo’ from the Payment Bank.
  3. The 15-day notice period will be specified in the notice sent to the Drawer.
  4. No charge is considered for Drawing if the Cabinet pays the full amount within the specified 15-day notice period.
  5. If not, the payer may choose to file a complaint in the appropriate court against the Drawee violation.
  6. Such appeal will be lodged within one month from the end of the 15-day notice period.

Conditions necessary to prosecute the defaulting Drawer

The cabinet can only be sued under the following circumstances:

  1. When a check is drawn the cabinet is in the account kept by him or in the name of Drowse.
  2. If the check is defective and returned due to ‘Insufficient funds’ in the drawer account.
  3. If the amount stated on the check is for the deduction of a specific debt or drawer debt to the Payer.
  4. If the Cabinet fails to pay the non-compliant check within 15 days from the date of receipt of a written notice of this.
  5. Only if there are all of the above circumstances, the drawee may be sued or prosecuted for contempt of check.

Who deals with cheque dishonor complaint/cases (Judicial body)

Check Bounce is governed by section 138 of the Negotiable Instrument Act. Any case facing a check, as defined under section 138 of the Negotiable Instrument Act, is a Criminal Offense and therefore the trial is conducted in accordance with the provisions of the Summary Trial of the Code of Criminal Procedure, 1973 (CrPC).

The case relating to the check is heard by the City Magistrate (in the case of metropolitan areas) or the First-Class Magistrate’s Court (excluding major metropolitan cities). Therefore, a complaint against an inactive drawer should be properly made.

Where can a Cheque Bounce case be filed?

In accordance with the latest changes made in terms of the 2015 Ordinance and applicable time rules, a complaint of non-compliance check is made locally as described below:

  1. In the case of a check where the Payer / Owner is deposited to collect the amount of money through his / her bank account – the place where the bank branch is located where the Paymaster / Owner holds and maintains the account.
  2. In the case of a check where the Payer / Owner is deposited in order to collect the amount otherwise through his or her bank account – the place where the Drawee bank branch is located where Cabinet closes and maintains an account.

Who can file a cheque bounce case?

A complaint or case of non-compliance with a check is lodged at the point where the check was submitted for consideration, thus, the Drawer is responsible for the checking of the check. A case of disrespect for a check cannot be opened by one person but by any organization that defames the Check.

Penalties

There are two remedies for the shame of a check:

In Civil: – The Paymaster / Drawee may initiate a refund process under order 37 of the Citizens’ Procedure Code, 1908 in the local court without criminal proceedings. The payer receives the money by court order.

In Criminal: – Disregard for a check contravenes section 138 of the non-negotiable tools law, 1881 which provides for imprisonment for up to two years or a fine that can be doubled by the value of the check or both. This case is a bailable, integrated and non-discriminatory case.

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Legal Notice For Cheque Bounce

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