When a cheque made by the drawer is sent to the bank for payment in the name of the payee, but the cheque is rejected and returned by the bank unpaid, the cheque is said to be bounced. Banks would return the cheque along with a return memo Insufficiency of funds is one of the main reasons as to why a cheque gets bounced. When a cheque is bounced, the payee must send a legal notice to the drawer of the cheque, seeking such drawer to make the payment.
A cheque bounce notice must be sent to the drawer of the cheque within 30 days from the date of bouncing of the cheque. Such a notice gives a time period of 15 days (to the drawer) from the date of receipt of a notice, for him/her to make the necessary payment. In case the drawer fails to pay within these 15 days, then a criminal complaint is to be filed in the Court within 30 days from the expiry of such 15 days. Thus, a legal notice is the first step of acquiring your money in case your money is stopped due to bouncing/dishonour of cheques.
A cheque bounce notice must cover all the necessary points (among others) given below:
Name and address of the parties involved.
Cheque number and the amount on the cheque.
Brief summary of the facts generating the claim.
Reason for cheque bounce with receipt of return memo sent by the bank.
Date on which cheque was made by the drawer.
Date on which cheque was presented for payment and that the cheque was presented before its expiry period.
Law applicable to such offense and punishment prescribed under the law.
Direction to the drawer to make payment within 15 days from receipt of such notice.
Provision of a complaint should be mentioned in case the drawer fails to make payment within 15 days.
Signature of the advocate for the payee.
To, Date: __/__/2019
Name of the party/parties
Address
Contact info.
Sub: Legal notice under section 138 of Negotiable Instrument Act for dishonour of cheque.
Dear Sir/Madam,
Under instructions and authority from my client M/s. ______ we serve upon you the following legal notice.
That my client is a Private Limited Company engaged in trading of computers, laptops, computer parts and accessories the name of ________ having office at _________.
That in the year ______ you have approached my client through E-mail communication of your employee ________ to purchase _______ for your office. Subsequently you have issued purchase order dated _______ amounting to rupees ______ for _______.
That you have promised our client to pay the cost of the product in the form of Current Dated Cheque as mentioned in the purchase order.
That our client had relied on your promise and as instructed by you delivered the ________ at your office at ______ vide Invoice No. _______ dated _______.
That you have issued Cheque No. ____dated ________ for Rs. ______/- (Rupees ____________only) drawn ____________________ towards payment against the Invoice.
That the aforesaid cheques No. _____dated ________for Rs. _______/- was presented by our client M/s. _______ on ____ to your bankers i.e. ______________.
That to our clients' shock and surprise the said cheque had been dishonored by your bankers with the reason “Fund Insufficient” which was intimated to our client by their _______ through their cheque return memo dated _________.
That thereafter in spite of many telephonic reminders by my client, you failed to make the payment due to my client.
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 _________.
My client states that you have issued the above said cheques only with an intention to cheat our client which amounts to an offence punishable under section 138 of Negotiable Instruments Act.
Under the circumstances, we call upon you to pay of Rs. ____________ /- within a period of 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 a court of law for an offence punishable under section 138 of Negotiable Instruments Act for which you will be liable for all costs and consequences.
This is without prejudice to all other legal rights and remedies available to our client for the above-stated purpose.
You are liable to pay a sum of Rs. _______/- as necessary cost and expenses of sending the present legal notice to you.
Copy of this legal notice is also kept at my office for further ready reference if required in the future.
Yours faithfully,
Signature
(Advocate)
There are no specific documents required for the drafting and execution of a legal notice. However, cheques and the memo of return as received by the banks are documents that must be tallied while drafting a legal notice. Any other document involved in the transaction leading up to the cheque bounce notice shall also be examined in order to include the correct details in the legal notice.
No set procedure is applicable in the making of a cheque bounce notice. However, a legal notice must be drafted and signed by a lawyer, with all the necessary details/contents as mentioned above. Once the notice is drafted it should be examined by the payee. It should then be sent to the drawer of the cheque. If no action is taken or no repayment is done within the number of days mentioned upon the notice, a criminal case against the drawer of the cheque can be filed under the Negotiable Instruments Act. The complaint shall be registered in a magistrate’s court within a month of the expiry of the notice period.
Matters relating to cheque bounce (including cheque bounce notice), are dealt with under Section 138 of the Negotiable Instruments Act, since a cheque is a negotiable instrument. A cheque bounce notice is essentially a legal notice and must be sent within the limitation period of 30 days from the date of the cheque(s) being bounced/dishonoured. A legal notice should be drafted and signed by a lawyer. Cheque bounce notice is the first step towards litigation.
A legal notice is sent by and in the name of the party's advocate or lawyer. Therefore, it is a prerequisite to hire a cheque bounce lawyer to send a cheque bounce notice. Also since, a cheque bounce notice is the first step towards litigation, it is highly recommended that you hire a cheque bounce lawyer. A lawyer has the requisite expertise and knowledge to draft such legal notices. He/she will be able to accumulate important information for the client and draft the notice accordingly. He/she will ensure that you are on the right path in attaining justice. A lawyer can manage all legal paperwork effectively. Therefore, hiring an expert cheque bounce lawyer is of prime importance in order to ensure that your cheque bounce notice is sent correctly, keeping in mind the possible litigation that may ensue.
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