Cheque Bounce Notice
Receiving a notice for a bounced cheque remains a commonplace occurrence even in an era marked by sophisticated financial oversight. Should you find yourself in receipt of such a notice, we urge you to promptly engage the expertise of the RegisterKaro team for best results..
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Understanding the Cheque Bounces
Our everyday use of technology has had a significant impact on how we conduct financial transactions. For many people, executing financial transactions has become more convenient and effective with the introduction of digital payment methods. Digital payments provide a faster way to complete transactions—no more standing in line or fretting about misplacing paper cheques. With just a few smartphone touches, we can now make payments and transfer money, simplifying and speeding up banking operations. But even with the ease of digital payments, many people still prefer to trade financially with cheques. For many years, people have regarded cheques as a secure way to send money and make purchases. However, there is a chance of a “bounce” or “dishonor” when using cheques. A “dishonored cheque” is one that the bank has returned for any number of reasons; this can lead to fines, penalties, or even jail time which is conveyed to the other faulted through cheque bounce notice.
A cheque is a formal promise made in exchange for a certain amount of money from the payer (the person writing the cheque) to the payee (the person receiving it). Ideally, money is transferred from the payer’s account to the payee’s account by the payer’s bank. Nevertheless, there are instances in which the bank of the payer or the bank of the payee declines to honor this agreement. There could be several causes for this “decline.” When this happens, the cheque bounces and is referred to as a “bounced cheque .”
- What is the check bounce notice?
- Cheque Bounce Notice Vis-a-vis Negotiable Instrumrnt Act
- When do you receive a notice for Cheque Bounce?
- How do you issue a notice for cheque Bounce?
- Points to be remember for drafting cheque Bounce Notice
- what to do when you receive a Cheque Bounce Notice?
- How RegisterKaro helps you in the Cheque Bounce Notice?
- Frequently Asked Questions
Cheque Bounce Notice
What is a Cheque Bounce Notice?
According to Section 138 of the Negotiable Instruments Act, 1881 (“Act”), bouncing a cheque is a crime that carries a maximum two-year jail sentence, a fine up to double the value of the cheque , or both. A cheque is said to have bounced when the payee delivers it to the bank for payment and it is returned unpaid with a memo stating there are not enough funds
A cheque bounce can happen for a number of reasons, but it becomes an offense under the Act if the bounce is caused by insufficient money in the drawer’s account. The cheque that is being presented for payment must be rejected by the bank with a return memo indicating that there are not enough funds. In this situation, the cheque’s payee may send the drawer a notice requesting payment of the cheque amount, known as a “cheque bounce.”
Cheque Bounce Notice Vis-a-vis Negotiable Instrumrnt Act
Section 138 : According to Section 138 of the Negotiable Instruments Act, bouncing a cheque due to insufficient money is considered an offense and is subject to jail. It states that if someone writes a cheque on an account they own to pay someone else and the bank returns the cheque unpaid because there aren’t enough funds to cover the cheque, the person who wrote the cheque has committed an offense
section 144 : In accordance with Section 144 of the Negotiable Instruments Act, any individual in charge of the firm’s operations at the time the offense was committed is liable for any cheque that bounced. This includes cheque that the company issues. According to this provision, it is illegal for a company’s cheque drawer to bounce due to inadequate cash
When do you receive a notice for Cheque Bounce?
There are several reasons why a cheque would bounce. The most frequent explanation is that when the cheque was offered for payment, the payer did not have enough money in their savings account. A “bounce due to insufficient funds” is what is meant by this. cheque bounces can also occur for the following reasons:
Insufficient Balance: When the account balance is insufficient for the cheque to be encashed, then in such scenario it is expected to receive a notice for cheque bounce.
Expired Cheques: The cheque will be returned unpaid if it is presented for payment after the specified date..
Signature mismatch: A cheque will be returned unpaid if the signature on it does not correspond to the one on file with the bank.
Account number mismatch: The cheque will be returned unpaid if the account number on the cheque does not match the account number of the payer.
Damaged Cheques: The bank may refuse to honor a cheque that is defaced or defaced.
When do you receive a notice for Cheque Bounce?
There are several reasons why a cheque would bounce. The most frequent explanation is that when the cheque was offered for payment, the payer did not have enough money in their savings account. A “bounce due to insufficient funds” is what is meant by this. cheque bounces can also occur for the following reasons:
Insufficient Balance: When the account balance is insufficient for the cheque to be encashed, then in such scenario it is expected to receive a notice for cheque bounce.
Expired Cheques: The cheque will be returned unpaid if it is presented for payment after the specified date..
Signature mismatch: A cheque will be returned unpaid if the signature on it does not correspond to the one on file with the bank.
Account number mismatch: The cheque will be returned unpaid if the account number on the cheque does not match the account number of the payer.
Damaged Cheques: The bank may refuse to honor a cheque that is defaced or defaced.
How do you issue a notice for cheque Bounce ?
In order to send out a cheque bounce notice to legal action, the following procedures must be completed
1. Within 30 days of the cheque being dishonored, the payee must send a bounce notice to the defaulter via registered mail (or expedited post) acknowledging the amount owed. The reason for the cheque bounce, the amount, the date the cheque was deposited, the bounced date, the type of the transaction, and the request for payment within 15 days must all be included in the right format of the notice that a cheque has bounced.
2. The payee must file a criminal action in court within 30 days of the notice period expiring if the cheque defaulter does not make payment within 15 days of receiving a notice that the cheque has bounced. The court in the city where the cheque was presented is where complaints about cheque bounces must be lodged.
3. Under Section 138 of the Negotiable Instruments Act, the court will hear the matter after it is filed and issue summonses.
4. The person who failed to pay the cheque would then need to provide a surety and appear in court to settle the dispute
Points to remember for drafting cheque Bounce Notice
In order to send out a cheque bounce notice to legal action, the following procedures must be completed
1. Cheque Drawer details [Name and Address]
2. Cheque Payer details [Name and Address]
3. Details of cheque presented to bank [cheque number, date, and amount]
4. Reason behind cheque bounce.
5. Request for the sum to be paid to be arranged immediately
6. Drawing reference of consequences and obligations under Negotiable Instruments Act, Section 138.
7. Cheque return date
what to do when you recieve a cheque Bounce Notice?
The payee may file a lawsuit against the drawer 15 days after the cheque expires and a bounce notice is sent. The payee is required by Section 138 of Negotiable Instrument Act to file a complaint. Cheque bounce is a criminal offense for which the payee may file a criminal lawsuit in accordance with Section 138 of the Act. After the 15-day period has passed since the cheque bounce notice was sent, the payee has 30 days to submit a complaint with the magistrate over the cheque bounce
This tedious process of responding to the cheque bounce notice becomes easier when RegisterKaro becomes your process partner. RegisterKaro team of experts assists you in drafting the most apt notice with fewer gaps to obtain the best results.
How RegisterKaro helps you in the Cheque Bounce Notice?
RegisterKaro has been one stop solution for cheque bounce related services for the varied ranges of benefits such as:
Pool of Experts: RegisterKaro holds a large pool of Experts from all over the world specializing in Cheque Bounce related services. Our team of experts makes sure that your work is taken care of in the most effective manner possible.
Cost-effective: RegisterKaro Cheque Bounce related services are of premium quality at the most efficient rate, which suits the client’s pocket, making sure that quality service is not the only thing the client gains on our platform.
Client-oriented approach: Our team of experts is well trained and equipped with a client-oriented approach, keeping in mind that the process must be client-centric, focusing on meeting all the requirements of their business and, therefore, satisfying their needs.
Process Alteration: For the fact that we focus on a Client-centric approach, we keep our process structurization open for the client to alter it as per their need, requirements, and vision. For us, obtaining the best results is the focus, along with the Client satisfaction.
Trusted partner of 10000+ Clients: RegisterKaro has earned the trust of more than 10000+ clients who have availed our Cheque Bounce related services. Their trust in us from a term in continuity is proof of our services backed by quality and assurance
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FAQs
What is the legal notice for a bounced cheque?
The cheque bounce notice must be sent within 30 days of the receipt of information of return of cheque by the bank. The drawer fails to pay the amount of cheque to the payee within fifteen days of receipt of the cheque bounce notice.
What is the new rule of cheque bounce?
According to the new rule, it is illegal to bounce a cheque under Section 138 of the Negotiable Instruments Act, 1881. The drawer may be subject to monetary penalties, a two-year prison sentence, or bothpart from its advantageous location, Dubai provides other tax breaks to companies. With no personal income tax and a competitive corporate tax rate of just 9% (effective as of June 2023), from which many enterprises are still exempt, the city boasts a low tax regime.
Can 138 notice be sent after 30 days?
In this case, a complaint may be filed within the following month if the drawer does not pay the amount due within 15 days of the notice being received. This is because Section 138 of the NI Act requires a notice to be sent under this section (for dishonor of cheque) within 30 days of the date the cheque bounces
What is the time period for cheque bounce notice?
According to the Negotiable Instruments Act, if a cheque bounces, a legal notice needs to be sent out within 30 days. Then, a case must be filed in a total of 45 days, which includes the first 30 days for sending the legal notice and the remaining 15 days.
Can I escape from cheque bounce case?
The accused must prove in this defense that the bounced cheque was made as a security deposit rather than to settle a debt or other obligation in order to avoid having the case violate Section 138 of the Negotiable Instruments Act. The security given was a bounced cheque. Thus, the defendants are immune from prosecution.
Can I send legal notice without lawyer?
With the assistance of a lawyer, anyone can serve another party with a legal notice, either in their own right or through an authorized representative who is legally permitted to do so
Can I send cheque bounce notice without a lawyer?
Yes, you can send a notice without the help of an attorney. You have to use caution when it comes to the contents, though. The notice needs to be extremely explicit because it will be crucial for future actions. Obtaining the assistance of a knowledgeable lawyer might be prudent.
Is a bounced cheque a crime?
The Negotiable Instruments Act of 1881 makes it illegal to dishonor a cheque due to insufficient money in the payer’s account. When a cheque is written against an account that has insufficient funds, the payer could face legal action.
What is the time limit for 138 legal notice?
Within 30 days after receiving the bank’s notification of dishonor, the payee or holder in due course is required to start legal action
What if I ignore a legal notice?
In India, a legal notice cannot be disregarded. There could be severe repercussions from disobeying a legal notice, such as legal action taken against you.