Cheque Bounce Notice Format

Cheque bounce or cheque non-payment in an exceedingly serious offence in Republic of India punishable with imprisonment or fine beneath Section 138 of the Negotiable Instruments Act. Just in case of cheque bounce, a cheque beneficiary should gift the cheque institution with a cheque bounce notice beneath section 138 inside thirty days of come back of the cheque to safeguard his/her rights beneath Section 138 of the Negotiable Instruments Act. Cheque bounce notice could be a firm and high intimation to the cheque institution that the cheque beneficiary can precede with legal proceeding if payment for the cheque isn’t created forthwith. For a cheque bounce notice to be valid, it should contain relevance Section 138 of the Negotiable Instruments Act, info concerning once the cheque was conferred, the explanation for non-realization of payment and a call for participation to the cheque institution to rearrange for payment forthwith through alternate means that. a part 138 Notice should be conferred to the cheque institution inside thirty days of comeback of cheque thanks to be valid.

How to Issue Cheque Bounce Notice

Cheque bounce notice or Section 138 notice are often simply created victimization the Ali Tax World Live Edit feature. Once the document is formed, it are often written on a comprehensible written report or stationery of the business and delivered to the cheque institution. The cheque bounce notice should contain the name of the cheque beneficiary, check institution name and address, date of comeback of cheque, reason for comeback of cheque, request to create arrangement for alternate payment immediate and therefore the words that the notice is issued beneath Section 138 of the official document Act. It’s necessary to send the Cheque Bounce notice through mail, so the date of issuance notice is often recorded formally. One copy of the letter is often maintained by the cheque’s beneficiary whereas the opposite copy is delivered to the cheque institution through mail.

When Cheque Bounce Notice Can Be Issued

To issue a cheque bounce notice and find legal recourse, the subsequent conditions should be satisfied:

  • The cheque should are provided towards a liability.
  • The cheque ought to be conferred by the beneficiary inside an amount of half-dozen months of its validity.
  • The cheque should are came back by the bank thanks to too little funds.
  • The recipient makes a requirement for the payment by giving a cheque bounce notice in writing, inside thirty days of the receipt of data by him from the bank that funds square measure too little.
  • The cheque drawer fails to create payment of the same quantity of cash inside fifteen days of the receipt of the cheque bounce notice.
  • Legal action is initiated inside one month of the date on that the cause-of-action arises.

Initiating legal Action for Cheque Bounce

The following steps should be followed to issue a cheque bounce notice and take legal action:

  1. Cheque bounce notice should be issued by the recipient to the defaulter, inside thirty days of dishonor of cheque, by mail (or Speed Post) acknowledgement due. The cheque bounce notice should be correct format, with info like nature of group action, amount, date of cheque deposit, date of cheque bounce, reason for cheque bounce and request to create payment inside fifteen days.
  2. If the cheque defaulter fails to create payment inside fifteen days of cheque bounce notice, the recipient ought to file a criminal case in an exceedingly court inside thirty days from the end of notice amount of fifteen days. Cheque bounce complaints should be filed in an exceedingly court within the town wherever the cheque was conferred.
  3. Once the case is filed, the court can hear the case and issue summons beneath Section 138 of the Negotiable Instruments Act.
  4. The cheque defaulter would then need to submit surety and seem before the Court for resolution of the matter.

Section 138 of Negotiable Instruments Act

  1. Dishonour of cheque for insufficiency, etc., of funds in the account.

Where associate cheque drawn by someone on an account maintained by him with a banker for payment of any quantity of cash to a different person from out of that account for the discharge, in whole or partially, of any debt or different liability, is came back by the bank unpaid. either owing to the number of cash standing to the credit of that account is too little to honour the cheque or that it exceeds the number organized to be paid from that account by associate agreement created thereupon bank, such person shall be deemed to possess committed associate offence and shall, while not prejudice. to the other provision of this Act, be penalized with imprisonment for a term which can be one year, or with fine which can be double the number of the cheque, or with both: only if nothing contained during this section shall apply unless:

  • The cheque has been, conferred to the bank inside a amount of six months from the date on that it’s drawn or inside the amount of its validity, whichever is earlier;
  • The recipient or the holder in due course of the cheque because the case could also be, makes a requirement for the payment of the same quantity of cash by giving a notice, in writing, to the drawer of the cheque, inside fifteen days of the receipt of data by him from the bank concerning the come back of the cheque as unpaid; and
  • The drawer of such cheque fails to create the payment of the same quantity of cash to the recipient or, because the case could also be, to the holder in due course of the cheque, inside fifteen days of the receipt of the same notice. clarification.-For the needs of this section, “debt or different liability” means that a de jure enforceable debt or different liability.

Explanation: For the needs of Section 138 of Negotiable Instruments Act, “debt or different liability” means that a de jure enforceable debt or different liability.

Section 141 of Negotiable Instruments Act – For companies

  1. Offences by firms.

If the person committing associate offence beneath section 138 could be a company, every one UN agency, at the time the offence was committed, was answerable of, and was accountable to, the corporate for the conduct of the business of the corporate, likewise because the company, shall be deemed to be guilty of the offence and shall be susceptible to be proceeded against and penalized accordingly: only if nothing contained during this sub-section shall render any individual susceptible to penalization if he proves that the offence was committed while not his information, or that he had exercised all due diligence to forestall the commission of such offence.

Where any offence beneath this Act has been committed by an organization and it’s established that the offence has been committed with the consent or connivance of, or is thanks to, any neglect on the a part of, any director, manager, secretary or different officer of the corporate, such director, manager, secretary or different officer shall even be deemed to be guilty of that offence and shall be susceptible to be proceeded against and penalized consequently