If a cheque is presented for payment to the bank but due to insufficient balance in the account, overwriting, expired validity of the cheque, etc. reason the cheque cannot be cleared and it considered to be dishonored. It invites legal action under section 1387 of the Negotiable Instrument Act, 1881.
In case of bouncing the issuer of the cheque has an opportunity to rectify their error made by intentionally or unintentionally which has caused the cheque bounce and they can ask the payee to resubmit the cheque for clearance. It must be done within time-line.
If the chque bounces second time then the recipient has an option of legal action against the issuer of the cheque, if they wish to do so. Primarily a demand notice issue under section 138 and asks the issuer to transfer the requisite fund within 15 days, but it may be considered a delay by the court if a justifiable reason is provided by the issuer.
Filing a Complaint
The recipient has the option of filing a complaint before the courts within 30 days, if the issuer of the cheque neither reply to the demand notice nor comply with the terms of the same. A complaint can be filed under section 138 to the concerning court situated in the location where the cheque was drawn. It is to be noted that cheques which are issued as a gift are not covered by the section 138 of the Negotiable Instrument Act.
The original documents such as the original cheque, a copy of the notice and acknowledgement receipts are to be verified by the Judicial Magistrates under the complaint being filed and the requisite court fees being deposited. The magistrate would issue a summons after examination of above documents/ proof to the issuer of the cheques for appearing before the court and if found guilty then the issuer would be punished with imprisonment or fine under section 138.
In addition to section 138 the recipient of such cheque can also liable to file a complaint about cheating under section 420 of the India Penal Code against issuer of the cheque.
Since Legal Aid practices law at every forum and so it suits us Trial and investigation, litigation, examinations, arbitrations, pleadings as well as alternate dispute of cheque bouncing. We have a special efficient team having years of experience handling such disputes and we have resolved numerous of such issues successfully.
The need and requirements of our every type of clients provides has distinct experience not only in vast legal researches but also in domestic enquiry, Trial and investigation, litigation, examinations & cross examinations of witnesses, arbitrations, pleadings as well as alternate dispute resolution. Since we practice law. Law from the court of metropolitan magistrate as well as civil judge to the supreme court of India is also an important platform where we practice. Giving relief and satisfaction as per expectation of our client is our first and foremost purpose. Therefore we do not hesitate at all to appear before any forum, commission, cell, tribunal or court for our clients.
Timelines in a Cheque Bounce case
- The legal notice must be sent within 30 days from the date of bouncing of the cheque
- The legal notice provides the cheque issuer 15 days from the date of receipt of notice to make the payment
- In case the drawer fails to pay within 15 days, then a criminal complaint is to be filed in the Court within 30 days from the expiry of the 15 days
- Original postal receipt
- Photocopy of legal notice
- Original bank return memo (communication from bank of bouncing of cheque)
- Original cheque
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