Cheque Bounce Notice under Section 138 by Legal Experts

Q: How many days do I have to send a cheque bounce notice?

The payee (the person who received the bounced cheque) must send the legal demand notice to the drawer within 30 days from the date of receiving the "cheque return memo" from their bank, which signifies the cheque's dishonor.

Q: What happens if the drawer does not pay within 15 days?

Suppose the drawer fails to make the payment within the 15 days stipulated in the notice. In that case, the payee then has the right to file a criminal complaint in the appropriate Magistrate's court under Section 138 of the Negotiable Instruments Act, 1881. This complaint must be filed within 30 days of the expiry of the 15-day notice period.

Q: What documents are needed to file a cheque bounce case?

To file a cheque bounce case, you will typically need the original bounced cheque, the cheque return memo from the bank stating the reason for dishonor, a copy of the legal demand notice sent to the drawer, and proof of delivery of that notice (e.g., RPAD acknowledgment card or courier receipt). Additionally, documents proving the underlying debt or liability (like invoices and loan agreements) are highly beneficial.

Q: Can a cheque bounce case be settled out of court?

Yes, a cheque bounce case can be settled out of court at any stage of the proceedings, even after the complaint has been filed in court. Often, courts encourage mediation or settlement between the parties. If a settlement is reached, the parties can file a compromise petition with the court, and the case will be closed.

Q: Does a bounced cheque affect my CIBIL score?

Yes, a bounced cheque, particularly one due to insufficient funds, can negatively impact your CIBIL score (credit score). Banks report such incidents to credit bureaus, and repeated instances can significantly lower your score, making it harder to obtain loans, credit cards, or other financial services in the future.

Q: Can I re-present a bounced cheque?

Yes, you generally can re-present a bounced cheque for payment, provided it is still within its validity period (usually three months from the date of issue). However, if it bounces again, you will need to send a fresh legal notice for the second dishonor to initiate legal proceedings. It's often advisable to send a notice after the first bounce rather than re-presenting multiple times.

Q: What should I do if I receive a cheque bounce notice?

If you get a cheque bounce notice, don’t ignore it. Check the reason with your bank and try to settle the amount with the party who issued the notice. You have 15 days to make the payment from the date you receive the notice. If you fail to pay, legal action can be taken against you under the Negotiable Instruments Act.

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Frequently Asked Questions (FAQs)

What is the punishment for a bounced cheque?

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Under Section 138 of the Negotiable Instruments Act, 1881, if a drawer is found guilty of a cheque bounce due to insufficient funds, they can face imprisonment for a term that may extend to two years, or a fine which may extend to twice the amount of the cheque, or both. The court may also order the drawer to pay compensation to the payee.

How many days do I have to send a cheque bounce notice?

What happens if the drawer does not pay within 15 days?

What documents are needed to file a cheque bounce case?

Can a cheque bounce case be settled out of court?

Does a bounced cheque affect my CIBIL score?

Can I re-present a bounced cheque?

What should I do if I receive a cheque bounce notice?

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Navigating the complexities of a cheque bounce in India involves a clear legal framework, from understanding why a cheque might be dishonored to the steps involved in seeking legal recourse.

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Why Choose RegisterKaro for the Cheque Bounce Notice Drafting Service?

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