Cheque returned due to insufficient amount What action can I take
18-Aug-2023 (In Cheque Bounce Law)
I had booked a flat from tgs constructions, tgs Switzerland in 2015, and paid around 550,000 Rs. But the project got stuck in problems and was a non starter till 2016 Feb. I cancelled the booking and got the amount as post dated cheques for 90 days later. To my astonishment these cheques got dishonoured and repeated contact with tgs construction has not been of any use. Kindly advice
If the cheques have been presented within its period of validity, if the cheque is bounced for the reason 'insufficient funds', then you may proceed against the drawer either for criminal action under Section 138 of Negotiable Instruments Act in a magistrate's court and for civil action for recovery amount due in a civil court.
I suggest you to issue a legal notice under Section 138 of Negotiable Instrument Act and thereafter looking to their response, you can file a complaint before the jurisdictional Magistrate court to recover the money and also you can file a police complaint simultaneously.
The Negotiable Instruments Act, 1881 is applicable for the cases of dishonour of cheque. This Act has been amended many times since 1881.
According to Section 138 of the Act, the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both. If payee decides to proceed legally, then the drawer should be given a chance of repaying the cheque amount immediately. Such a chance has to be given only in the form of notice in writing. The payee has to sent the notice to the drawer with 30 days from the date of receiving “Cheque Return Memo” from the bank. The notice should mention that the cheque amount has to be paid to the payee within 15 days from the date of receipt of the notice by the drawer. If the cheque issuer fails to make a fresh payment within 30 days of receiving the notice, the payee has the right to file a criminal complaint under Section 138 of the Negotiable Instruments Act. However, the complaint should be registered in a magistrate’s court within a month of the expiry of the notice period. It is essential in this case to consult an advocate who is well versed and experienced in this area of practice to proceed further in the matter.
According to Section 138 of the Act, the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both. If payee decides to proceed legally, then the drawer should be given a chance of repaying the cheque amount immediately. Such a chance has to be given only in the form of notice in writing. The payee has to sent the notice to the drawer with 30 days from the date of receiving “Cheque Return Memo” from the bank. The notice should mention that the cheque amount has to be paid to the payee within 15 days from the date of receipt of the notice by the drawer. If the cheque issuer fails to make a fresh payment within 30 days of receiving the notice, the payee has the right to file a criminal complaint under Section 138 of the Negotiable Instruments Act. However, the complaint should be registered in a magistrate’s court within a month of the expiry of the notice period. It is essential in this case to consult an advocate who is well versed and experienced in this area of practice to proceed further in the matter.
Hi
If the Cheque is dishonoured then you must issue a Statutory legal notice within 30 days of receipt of the Bankers memo which states that the cheque has been dishonoured for "Insufficient funds" and give him 15 days time to settle the amount, post which if they still fail to pay u then you must only file a PCR before the magistrate court for refund of the amount and punishment under S.138 of the NI act.
Pratap, Advocate
If the Cheque is dishonoured then you must issue a Statutory legal notice within 30 days of receipt of the Bankers memo which states that the cheque has been dishonoured for "Insufficient funds" and give him 15 days time to settle the amount, post which if they still fail to pay u then you must only file a PCR before the magistrate court for refund of the amount and punishment under S.138 of the NI act.
Pratap, Advocate
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