To send a legal notice for cheque bounce means taking an action against the one that has issued a cheque which was returned to the cheque beneficiary unpaid. When this happens, it’s considered as an offence under the Negotiable Instruments Act 1881 in India, and once a legal notice is issued for cheque bounce, it’s the responsibility of the cheque issuer to make the payment Legal Action for Cheque Bounce
Legal action for Cheque Bounce:
When the cheque bounces, the primary step is to send the cheque bounce notice to the drawer and request him to pay the due amount. If he does not respond to the notice, then legal action can be taken against him. For initiating legal action and filing a suit in the court against the drawer, the subsequent conditions must be satisfied-
- The payee should present the cheque within three months of the date of its issue.
- The bank should reject the cheque due to insufficient funds.
- The payee makes a demand for the payment of the cheque amount by issuing a cheque bounce notice in writing to the drawer by post.
- The cheque bounce notice must be sent within thirty days of the receipt of information of return of cheque by the bank.
- The drawer fails to pay the amount of cheque to the payee within fifteen days of receipt of the cheque bounce notice.
If the above-mentioned conditions are satisfied, then legal proceedings can be initiated in the court within thirty days from the expiry of fifteen days time period for cheque amount payment after receipt of cheque bounce notice by the drawer. The suit for cheque bounce can be initiated in the court of the city where the cheque was presented for payment. The case will be filed under Section 138 of the Act.
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Present article is for educational purposes alone, please take independent Legal advice from a professionals.
Advocate Prakhar Gupta, Arms Length Legal