Cheque Bounce Notice
Learn about the legal process and remedies available under Section 138 of the Negotiable Instruments Act for cheque dishonour.
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Cheque Bounce Notice – An Overview
A cheque bounce notice is a formal legal document issued by the payee when a cheque is dishonoured by the bank due to reasons like insufficient funds, signature mismatch, or account closure. Governed under Section 138 of the Negotiable Instruments Act, 1881, the notice must be issued within 30 days of receiving the Cheque Return Memo from the bank.
Legal Timeline under Section 138
1. Notice Period: Send the notice within 30 days of cheque dishonour. 2. Payment Deadline: Drawer must pay within 15 days of receiving the notice. 3. Filing Complaint: If unpaid, file a criminal complaint within 30 days of expiry of the 15-day period.
Purpose and Consequences
The notice serves as a final opportunity for the drawer to settle the amount before legal proceedings. Consequences include: ● Fine up to twice the cheque amount ● Imprisonment up to 2 years ● Or both
Why Issue a Cheque Bounce Notice
Issuing a legally compliant notice ensures the payee can take proper legal action and improves chances of recovering the amount. It also protects the payee's legal rights and serves as evidence in court.
1. Documents Required to File a Complaint
● Copy of the legal notice sent to the drawer
● Proof of delivery (registered post/courier receipt)
● Original dishonoured cheque
● Cheque return memo from the bank
● Supporting documents for the financial liability
Procedure for Cheque Bounce Case
1. Send a legal notice within 30 days of cheque return.
2. Include cheque number, bank details, amount, and dishonour reason.
3. If unpaid after 15 days, file a criminal complaint within the next 30 days.
4. File in a competent court having territorial and financial jurisdiction.
5. Court may issue summons and hear defence.
Special Cases & Criminal Liability
Under Sections 141 & 144 of the NI Act, company officers (e.g., directors, managers) may be held liable. For false claims (e.g., security cheques), the accused must prove non-liability.
Fees for Filing a Cheque Bounce Case
The legal fee depends on the case complexity, location, and lawyer’s experience.
| Manufacturer (Production Capacity) | License Fees/year (INR) |
|---|---|
| Minimum professional fee | ₹5,000 |
| May vary based on case | ₹5,000+ |
Timeline and Validity
The cheque bounce case must be filed on time for legal validity.
Notice Period
Within 30 days of dishonour
Send legal notice to the drawer
Payment Deadline
15 days from notice receipt
Drawer must make payment within this period
Complaint Filing
Next 30 days after payment deadline
File complaint under Section 138
Case Duration
6 months to 2 years
Varies based on court backlog and cooperation
Why Choose DoStartup?
We help draft legally compliant cheque bounce notices
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