Legal notice for cheque bounce

Have you seen a bounced cheque notice before? It is nothing else but a legal document that the bank sends to the clients when a cheque they’ve written bounces. But what does it mean?

Before discussing the legal notice, let’s look into what a cheque bounce is and when it occurs. In simple words, cheque bounce refers to when a cheque returns. There are many reasons for cheque bounce in India, which include insufficient balance and a mismatch of digits and words. It can put a person in a problematic situation. Legal notice for bouncing the cheque can be given to the one who gave the cheque. 

In India, legal notice for cheque bounce is considered a strong and severe intimation to the cheque made for the non-payment of the amount. The legal notice is framed by following a format we will study in depth.

According to Section 138, the cheque bounce notice must be given to the one who gives the cheque within 30 days, counting from the bouncing of the cheque due to its validity. As the cheque bounce is deemed a strict violation in India, that is punishable in section 138 of the NI Act 1881.
 
In this article, we will discuss what a legal notice is and other essential things to include.

Cheque Bounce Notice: An Introduction

If a cheque made by the debtor is sent to the bank for payment in the holder's name, but the cheque is refused and returned, the cheque is said to be bounced. Bank will return the memo along with the notice. Lack of funds is one of the prime grounds why a cheque gets bounced. If a cheque is bounced, the holder should send a lawful notice to the debtor, aiming such a drawer to make the payment.

The RBI holds cheque bounce Grants in India. As per RBI rules, banks must notify the debtor of a bounced check within three days of obtaining the cheque. The notice should have info about why the check was born and the fees (if any) that may be set that the account holder has to pay.

There are numerous causes why the cheque bounced, such as insufficient funds, blurry amounts, false account numbers, and mismatched signatures. 

If a person gets a notice for a bouncing cheque, it is vital to take action quickly to fix the crisis. Counting on the ground why it bounces? one may need to give more documentation or make deals for the payment.

If you have any questions regarding it, kindly contact your bank to get more clarity.

Necessities of a Cheque Bounce Notice in India

Listed below are some necessities of a cheque bounce notice in India.
Grounds for the bouncing of the cheque.

• Details to the payer to make payment of the actual amount, including the amount of cheque, amount number, address of both the parties, and the date of issue.
• Many cheques were given that ought to be paid to the holder within 15 days, counting from the date of receipt.
• The notice of cheque bounce should be made within 30 days, counting from when the cheque was bounced. The holder must have one copy of the notice, and the following copy must be sent to the issuer.

Legal Move for Cheque Bounce in India

When a cheque is bounced, the initial step is to send a legal notice and ask them to pay the required amount. If the drawer is not relented with the legal notice, then lawful action may be taken against them. For starting legal action and filing a suit in court against the drawer, the following needs must be completed-

• The beneficiary must give the cheque within three months from the date of its issue.
• The bank will reject the cheque due to inadequate money.
• The beneficiary requests the cheque amount by giving a cheque bounce notice in writing to the drawer by post.
• The cheque bounce notice should be given within 30 days of receiving the data on the return of the cheque by the bank.
• The debtor fails to pay the cheque amount to the payee within 15 days of receipt of the cheque bounce notice.

If all the conditions are okay, then legal work can begin in the court within 30 days from the end of fifteen days for the cheque amount paid after receipt of the cheque bounce notice by the debtor. The case for cheque bounce can be formed in the city court, where the cheque was given for payment. These cases are filed as per section 138 of the Ni act 1881.

Where to file a Cheque Bounce Notice?

The cheque bounce case will begin per the provisions of the outline trial held in the CrPC 1973. If the reason for action occurs in metropolitan cities, then the case must be tested by the judge, and a Judicial Magistrate can try the issue in other places.
The cheque bounce case can be filed either where the payee’s bank is found or where the bank of the drawer is.

Also, the payee/holder has to pay a legal court fee, counting on the amount of the bounced cheque. The court fees can differ from case to case and lean on the amount of the cheque.

At what time Can a person issue the Legal Notice for a Cheque bounce in India?

A cheque bounces legal notice is sent by an attorney on their client's side in reply for not paying that amount.

• The notice for cheque bounce shows that the cheque heir will move with legal action if the drawer does not pay the amount soon.
• To create the legal notice, these points must be followed:
• The cheque should have been equipped with a penalty.
• The cheque must have been sent by the heir within 6 months, counting from its validity.
• The Financial institution must have given back the bounced cheque, that is, a bank, due to low funds.
• The heir/holder must make a need for the pay by giving a legal notice within 30 days of getting the receipt.

If the debtor cannot pay the required amount within 15 days of getting the legal notice. Legal action will be taken within one month/ 30 days counting from the day when the legal notice was sent.

How can a person Send Cheque Bounce Notice?

Once the legal notice is made, it must be printed on plain paper or the business's letterhead. After that, it is given to the issuer of the cheque. It is important to include certain things in the notice, such as:

• Name of the cheque heir,
• Address and name of the who issued the cheque
• Date of a bounce of the cheque.
• Grounds for a bounce of cheque
• Appeal made to review issuer for quick alternate pay
• It must be issued as per Section 138 of the NI act 1881

The notice for the bounce of cheque is sent by the enlisted post for checking and legally giving the date of the notice. A cheque heir can get one copy of the letter with himself, and one follow copy is sent to the cheque issuer by post.

Format of the Cheque Bounce Notice: (SAMPLE)

To,                                                                                                           Date …….

Mr./Mrs

Address

Contact info.

Subject: Legal notice under section 138 of the Negotiable Instrument Act for the bounce of cheque.

Dear Sir/Madam,

Under instructions and authority from my client M/s. ______ we serve upon you the following legal notice.

1.    That my client is a Private Limited Company engaged in trading computers, laptops, computer parts, and accessories the name of ________ has an office at _________.

2.    That in the year ______ you approached my client through E-mail communication of your employee ________ to purchase _______ for your office. Subsequently, you have issued a purchase order dated _______ amounting to rupees ______ for _______.
3.    That you have promised our client to pay the cost of the product in the form of a Current Dated Cheque as listed in the purchase order.

4.    That our client had relied on your promise and as instructed by you delivered the ________ at your office at ______ vide Invoice No. _______ dated _______.

5.    That you have issued Cheque No. ____dated ________ for Rs. ______/- (Rupees ____________only) drawn ____________________ towards payment against the Invoice.
6.    That cheque No. _____dated ________for Rs. _______/- was presented by our client M/s. _______ on ____ to your bankers that is. ______________.
7.    To our clients' shock and surprise the said cheque had been bounced by your bankers with the reason “Fund Insufficient” which was intimated to our client by their _______ through their cheque return memo dated _________.
8.    That thereafter despite many telephonic reminders by my client, you failed to make the payment due to my client.
9.    That it is now clear that you had the dishonest intention at the time of purchasing ______ from my client and deceived my client to the tune of _________.
10.    My client states the above-said issued the above-stated cheques only to cheat our client which amounts to an offense punishable under section 138 of the Negotiable Instruments Act.
11.    Under the circumstances, well upon you to pay Rs. ____________ /- within 15 (fifteen) days from the date of receipt of this notice, failing which our client will be constrained to take legal action against you in offense of law for an offense punishable under section 138 of the Negotiable Instruments Act for which you will be liable for all costs and consequences.
12.    This is without prejudice to all other legal rights and remedies available to our client for the above-stated purpose.
13.    You are liable to pay a sum of Rs. _______/- as necessary cost and expenses of sending the present legal notice to you.
14.    A copy of this legal notice is also kept at my office for further ready reference if required in the future.

Yours faithfully,

Signature

(Attorney)

Things to keep in mind while issuing a legal notice for cheque bounce:
Listed below are things that one must consider:

• It must be written as per Section 138 of the NI act 1881
• Details about the cheque display.
• Reason for bouncing the cheque.
• Details for the appeal were made to the drawer to complete the payment rapidly.
• A notice must be created and sent within 30 days, counting from the days of the cheque bounce.

How can a person Respond to Legal Notice for Cheque Bounce in India?

It is vital to reply to a legal notice as it is an authorized paper about taking legal action against a person for not paying the amount prescribed.
It is advised to have a legal attorney by one's side while replying to a notice to get legal help. If you obtain a legal notice, you have two options that you can so, such as:

• The drawer must provide the amount that the sender has asked for, known as a payment.
• Or you can reply by stating it by defending yourself.

However, it is not required by law to give a reply to it. It is stated to take legal help and keep the legal civilities involved with a suitable reply. Any legal notice for bouncing the cheque equips a time by which one should send the reply.

One must read the notice carefully to apprehend what must be written before replying to the legal notice sent due to bounced cheque. If you want to reply to the legal notice, then ensure that you are following the listed information, including:

1. Response to the legal notice has to be taken to the attorney of the one who has sent you the notice
2. The name of a person, address, and other detailed things.
3. Note the points of the issue with suitable timing and dates, denying the assertion made for you
4. Do not confess or take any things you feel are incorrect and mentioned in the legal notice.
5. If you have any grudges against the sender, you may say them. It will form part of your offer that can count as a counteroffer.
6. Give a recap of your reason for the case
7. It is essential to have an attorney send a response to a legal notice to evade any errors. They can help you collect the details and will provide you with the legal notice on your side.

You should remember that while replying to a legal notice, you must have an experienced lawyer. That is where the Rest of the Case comes in. We have solved many cases related to framing and replying for legal notice. We have a panel of an attorney who will be there to help you.

CONCLUSION:

A bounced cheque notice is a formal way of declaring they are a cheque has been bounced to someone. Also, the notice will have details on why the cheque was bounced. With that, what are the next steps? It’s also essential to understand the cheque bounce laws and the latest judgment. Yet, Rest the Case knows the best ways and laws to handle the case for you. We have an experienced panel of lawyers who can help you out.

How can Rest the Case help you in it?

• Rest the case helps you with superior benefits in giving and sending a well-laid reply to legal notice for cheque bounce and many other services.
• RTC acts as a legal guard showing you access to the facts and details of attorneys experienced in various fields of Law. 
• We understand your legal cases and offer a solution for all your legal help with just a tap. 

The attorneys at RTC listen to all your legal problems and assist you in handling many legal cases. We make it simple for you that can help you in every way. To contact us, you can email us at [email protected] Or. You can call us at +919284293610

FAQ

When taking Legal Action, one can take against the Drawer for a Bounced cheque.

If the debtor fails to pay the required amount within 15 days as specified in the notice of cheque bounce, the holder can file a protest against them in court within 30 days, counting from the end of the specified 15 days.

How can one fight a cheque bounce case in India?

If the drawer files a cheque and, for any reason, that cheque gets bounced, then one can file a case for cheque bounce in the court, and one can file a response to the case by an attorney. One can also counter-file the cheque to the person for filing a cheque bounce.

Documents Needed for Cheque Bounce Notice Format

No precise documents are needed to make and enact a legal notice. Yet, cheques are returned with the memo. Any other paper involved in the dealing guiding up to the cheque bounce notice should also be inspected to have the right points in the legal notice. 

Can a bounced cheque be reissued?

One can issue the bounced cheque in the bank for the amount, even if it was bounced the first time. Yes, the cheque can be reissued only within the validity time.

How much time is needed to get the court's decision on a Cheque bounce case in India?

If the case goes to court, the decision can take about 2 to 5 years to take effect. The legal recourse for cheque bounce cases is evident in India under the NI act 1881.

Can a person get bail per section 138 of the NI act?

You will not need to get bail in a case as on section 138 as it is mainly a civil case, not a criminal case, and one may be detained if the matter is chosen against you. Yet, even so, the offense is augmented.

Reference for the legal notice format: https://lawrato.com/legal-documents/banking-finance-legal-forms/cheque-bounce-notice-format-53

About The Author:

Adv. Madhav Shankar, is a seasoned lawyer with over seven years of experience in advisory and dispute resolution. His expertise spans commercial law, cheque bounce cases, company matters, IPR, property disputes, banking, and insolvency cases. He also has extensive experience in matrimonial disputes and arbitration. Madhav holds a Master’s degree from Tilburg University in the Netherlands, specializing in law and technology, and has completed a copyright course from Harvard University. He is known for his ability to handle complex legal challenges with precision and integrity.