Issue Of Cheque As Security Towards Personal Loan By An Individual

I have been issued a cheque as security towards the personal loan by an individual .upon deposit of the cheque, it got dishonoured. The individual happens to have never filed an ITR , still he issued the cheque in his personal name as well as company name. The company name was changed 2 years back but cheque was issued of current year. Ultimately both the cheques got dishonoured with memo stating " Funds Insufficient ". The validity of both cheques is till 9th oct 19. Please advise possible actions.

Answers (1)

275 votes

Firstly, you will have to comply with Section 138 of the Negotiable Instruments Act. It is absolutely necessary that you send two statutory notices, one in your name and one in the Company’s name to the address of the person who issued you the cheque. I am assuming the cheques were presented for payment within 3 months. If the person who issued you the cheque does not respond within 15 days from the day you issued the notice(s), you must file a complaint within one month after the period of 15 days elapses. You may contact me for further clarification.

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