Concept of Bounced Cheque
A “bounced cheque” is the one which is dishonoured by the recipient bank due to various reasons listed for the dishonour of the cheque. A Cheque Bounce or dishonor of cheque is a serious offense punishable with fine or imprisonment or both under Section 138 of the Negotiable Instruments Act.
Plan of action which needs to be taken in a cheque bounce case:
In the case of cheque bounce, a legal notice needs to be served to the drawer of the cheque. The person who drew the cheque with a notice intimation will have a period of 15 days to either respond back to the notice or clear the dues. In case the drawer fails to make the payment within a stipulated period of 15 days after receiving the notice, then the case can go into legal litigation.
Who needs to send a cheque bounce notice?
Any person who has received a dishonoured cheque must mandatorily send a legal notice of cheque bounce within 30 days from the date of dishonour to the payer/issuer. This legal notice provides the issuer a period of 15 days from the date of receipt of notice within which he/she can make the payment, failing to which a criminal complaint can be filed in the Court.
To Obtain Relief
- Preparation of documents
Collect and prepare a file of all the required documents for the notice of cheque bounce
- Filing of the notice
Hire a lawyer to draft a notice for cheque bounce which needs to be served to the drawer of the cheque. A well drafted notice is usually enough to get the resolution without having to go into legal proceedings.
- Dispatching the notice
After preparation of the final draft, the lawyer who has prepared the notice needs to send the notice to the drawer of the bounced cheque on his letterhead.
Estimate Time Required
Period of notice
Usually preparation of the notice entirely depends on the time taken by the lawyer to draft a notice. A notice can be drafted within a day as well. It is easier to draft a notice if all documents are properly aligned.
The procedure of issuance of notice will take 7-8 days.
*Any additional work required by the advocate before/after making the notice is charged to the client.
Documents Required for Cheque Bounce
1. The Bounced Cheque in question.
2. The Cheque returning memo issued by the bank.
3. The Invoice or Bill or Agreement towards which cheque was issued.
4. Any other information which needs to be disclosed to an advocate for cheque bounce case