Sample Legal Notice for Cheque Bounce

Your Name
[Your Address]
[City, State, ZIP Code]
[Email Address]
[Phone Number]

Date: [Insert Date]

To,
[Recipient's Name]
[Recipient's Address]
[City, State, ZIP Code]

Subject: Legal Notice regarding Cheque Bounce under Section 138 of the Negotiable Instruments Act, 1881

Dear [Recipient's Name],

Under the instructions and authority of my client, [Your Name], residing at [Your Address], I hereby serve you this legal notice as per Section 138 of the Negotiable Instruments Act, 1881.

1. That on [Insert Date], you issued a cheque bearing No. [Cheque Number] dated [Cheque Date] for an amount of Rs. [Amount] drawn on [Bank Name] towards the discharge of your liability.

2. That the said cheque was presented for payment to my client’s bank, but it was returned unpaid by your bank with the reason "Insufficient Funds" or "Account Closed" (as applicable) on [Insert Date].

3. That despite the dishonor of the cheque, you have failed to make payment of the said amount to my client.

4. You are hereby called upon to pay the said amount of Rs. [Amount] within 15 days from the receipt of this notice, failing which my client will be constrained to initiate legal proceedings against you under Section 138 of the Negotiable Instruments Act, 1881, at your risk as to cost and consequences.

Please treat this as a final notice. My client reserves the right to pursue all legal remedies available under the law.

Yours sincerely,
[Your Name]
(Advocate)

Key Components of Cheque Bounce in India

In India, cheque bounce cases are governed by Section 138 of the Negotiable Instruments Act, 1881. Below are the key components:

1. Presentation:
   • The cheque must be presented to the bank within its validity period (typically 3 months from the date of issue).
2. Dishonor of Cheque:
   • The bank returns the cheque unpaid, constituting a dishonor.
3. Legal Notice:
   • The Payee (receiver of the cheque) must send a written notice to the Drawer (issuer of the cheque) within 30 days of being informed about the dishonor.
4. Payment Window:
   • The Drawer has 15 days from receiving the notice to make the payment.
5. Legal Action:
   • If the payment is not made within 15 days, the Payee can file a legal complaint within 30 days.
6. Punishment:
   • If found guilty, the drawer can face:
     • Up to 2 years imprisonment,
     • A fine up to twice the cheque amount, or
     • Both imprisonment and fine.

Common Mistakes to Avoid in Cheque Bounce Notices:

1. Ensure cheque number, amount, date, and bank details are accurate.
2. Include the bank’s reason for cheque dishonor (e.g., "Insufficient Funds").
3. Clearly state the 15-day deadline for payment after notice receipt.
4. Cite Section 138 of the Negotiable Instruments Act, 1881.
5. Specify the amount due and any applicable interest or fees.
6. State potential legal actions if payment is not made.
7. Send via Registered Post or verifiable method for proof of delivery.
8. Sign the notice and include advocate’s details, if applicable.
9. Send the notice within 30 days of the bank’s dishonor memo.