Legal process to file a cheque bounce case? What defenses available?
What is the procedure for legal action in a cheque bounce case? I had lent money to a friend and he gave me a cheque in return in his writing wherein the amount was Rs. 2.5 Lacs and the cheque got bounced 3 days ago.
What is the legal way out - please advice with timelines to be adhered to. Also, what all defense can the defaulter use in case we file a 138 case against them?
You have to send a legal notice within 30 days of receiving of the memo of dishonor of the cheque whereby you have to demand the payment of the cheque amount within a period of 15 days.
If the said payment is not made within 15 days, then you can file a Criminal Complaint under Section 138 of the Negotiable Instruments Act within 30 days after the end of the 15 day period.
The defenses available to the defaulter are many. Few of them are:
i. The cheque was not issued for a legally enforceable debt.
ii. The cheque was not signed by him.
iii. The entries made in the cheque are not made by the defaulter. (This is not an absolute defense)
iv. The cheque was obtained by fraud.
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