Cheque Bounce Case

Basic Procedure for Cheque Bounce

The bouncing of cheque entitles the holder of cheque to take criminal action against the drawer of cheque but only if a strict procedure is followed in this respect, which is as follows:

1. In case a cheque is bounced, a notice has to be issued to the drawer of the cheque (Oppsoite Paty) within 30 days from the date of memo accompanying the bounced cheque is received from the Bank.

2. The notice by the holder of the cheque should demand the amount for which the cheque has been bounced, providing 15 days to settle the matter.

3. The Opposite Party has 15 days from the receipt of the notice to settle the matter and no cause of action arises till the expiry of these 15 days or if paid within this specified period.

4. After the completion of said 15 days, if the opposite party does not settle the matter or ignores the notice, then the holder of the cheque may file a criminal complaint before the appropriate court within 30 days of the expiry of said 15 days.

5. In case, it is beyond the said period of 30 days, the delay can be condoned by the court on sufficient cause being shown.

Sample 15 days Notice

Subject: NOTICE UNDER SECTION 138 OF NEGOTIABLE INSTRUMENT ACT READ WITH SECTION 420 OF INDIAN PENAL CODE

On behalf of and under instructions of my client __________ S/o__________ R/o __________ (hereinafter referred to as “my client”). I do hereby serve you with the following legal notice:

1. That my client, Software Engineer, while looking for job paid Rs 25,000 to you for assured placement in an MNC, last year.

2. That thereafter my client issued a number of reminders to you for placement, but still no opportunity was provided to him, i.e. as you were unable to fulfill the promise as to placement of my client. Therefore, it was decided between you and my client that the amount of Rs 25,000 should be refunded and as a result you issued him a cheque no 822723 dated 22 December 2015.

3. That the said cheque was presented by my client to State Bank of India, Hyderabad for credit in his account in the month of December 2015 itself, but it bounced due to insufficient funds. And my client contacted you and was assured of cash in lieu of bounced cheque, therefore, my client did not take legal action earlier. My client thereafter again requested many a time to you for the payment of the said cheque amount by telephone and/or through personal visit of his representative, but in vain.

4. That in March 2016, my client again tried depositing the cheque with State Bank of India, Hyderabad but it was again returned as unpaid with remarks – Funds Insufficient, vide Syndicate Bank memo dated 24 March 2016.

5. That in the facts and circumstances created by you my above said client left with no alternative except to serve you the present notice and calling upon all of you to make the payment of the above mentioned cheque amount totaling Rs 25,000/- (Rupees Twenty five Thousand only) including bouncing charges in cash with interest @ 24% per annum within 15 days of the receipt of this notice failing which my client shall be constrained to institute against you a criminal complaint under section 138 of the Negotiable Instrument Act read with section 420 of IPC where under you could be sentenced to undergo imprisonment of the two years and also pay the fine equivalent of the double amount of the above mentioned cheque as well as legal charges of this notice of Rs 3500/-

6. That a copy of this notice retained in my office for further reference /record and legal action.

For More Details Contact : 8341776992

Tags: Cheque Bounce rules, cheque bounce case letter format,