Legal Notice for Cheque Bounce in Patna

Introduction

Navigating the maze of legal proceedings in the context of cheque bounce cases can be difficult, particularly in a city like Patna where local customs and legal nuances collide. Even though they appear simple, cheque bounce situations can become drawn-out legal battles if they are not handled carefully and intelligently.

Being Bihar's financial centre, Patna sees a lot of business dealings every day, a lot of which entail the exchanging of cheques. But the sad truth is that not all of these transactions end well, and cheques are frequently returned unpaid for a variety of reasons, including inadequate amounts, inconsistent signatures, or inconsistencies in the documentation.

The legal action accessible to persons who have been wronged by a bounced cheque entails a sequence of procedural measures, the first of which is typically serving a legal notice to the defaulter. This first action can have a big impact on the case's result and sets the tone for the rest of the legal process.

Comprehending the complexities involved in delivering legal notices for cases of cheque bounce in Patna necessitates a sophisticated understanding of the local dynamics at work in addition to the legal framework. Every step requires careful attention to detail and adherence, from following the guidelines provided by the Patna High Court to complying with the provisions described in the Negotiable Instruments Act, 1881.

What Do You Mean By Cheque Bounce Or Dishonoured Cheque?

A cheque bounce can happen for a number of reasons, including an insufficient balance, a ripped cheque, overwriting on the cheque, and when the cheque's validity has expired. The Negotiable Instruments Act, 1881, addresses the penalties associated with such cheque bounces and provides protection against them.

If the amount exceeds the arrangement with a bank, dishonour of a cheque resulting from inadequate funds in the drawer's bank account gives rise to criminal culpability against the drawer of the defaulted cheque. In the event of a cheque bounce, mens rea is not necessary and the drawer cannot use it as a defence. Liability resulting from Section 138 might potentially lead to a criminal offence of cheating under provisions of IPC and would be punishable.

Parties to the Cheque in Patna

1. Drawer: The individual who writes the cheque, or the "author of the cheque," is referred to as the Drawee. (The debtor may be the drawer.)
2. Payee: The individual in whose favour the cheque is drawn, or the person to whom the amount specified in the cheque is payable, is referred to as the Payee. (The creditor may be the payee.)
3. Drawee: The bank that the Drawer has an account with and from which the amount on the cheque is to be paid; in other words, the bank that receives the payment instruction is the Drawee.
4. Payee's Bank: The bank that the payee deposits the cheque into or has a bank account in where the cheque amount is to be deposited or credited (particularly in the case of a crossed cheque) is referred to as "Payee's Banker."

What is a Cheque Bounce Notice?

A "cheque bounce notice" is just a notification to the issuer that the recipient of the cheque will file a lawsuit if the amount is not paid immediately.

In the contemporary economic world, a cheque is seen as a necessary component of any transaction. A situation known as "cheque bounce" occurs when money is not paid because there is not enough balance in the account. In order to retrieve the sum, swift action is required. First, the drawer receives a notice requesting payment; if they don't, legal action will be taken. On the letter, a quick resolution is occasionally reached.

Contents of Cheque Bounce Notice

1. It must be in reference to Section 138 of the Negotiable Instruments Act;
2. Information regarding the cheque presentation.
3. Information regarding the request made to the cheque issuer to make payment on immediate basis.
4. Reason for non-realization of payment.
5. A notice must be presented within 30 days of return of cheque to the cheque issuer.

Legal Provision for Cheque Bounce Cases in Patna

A legal notice for a bounced cheque is normally sent in accordance with Section 138 of the Negotiable Instruments Act of 1881. According to this clause, if a cheque is dishonoured because there are not enough funds or for any other reason, the holder of the cheque, or payee, must notify the drawer, or issuer, in writing within 30 days of learning about the dishonour from the bank. The notice must state that the payee may file a lawsuit against the drawer if the cheque amount is not paid within 15 days of receipt.

Particulars such as the date of issue and dishonour of the cheque, the amount involved, and the payee's plan to file a lawsuit if the cheque amount is not paid within the allotted time should all be included in the notification. In order to provide proof of delivery, the notice should also be issued via courier or registered mail with acknowledgment. The drawer may be subject to criminal culpability, including jail time or a fine, as specified by the Act, if they disregard the notification.

Penalty

If, within 15 days of receiving the notice that the cheque has bounced, the drawer of the cheque fails to make the payment, they will be subject to legal action under Section 138 of the NI Act. The drawee may then use the verification process to support a case of cheque forging.

The punishment for cheque bounce in Patna is –

1. Imprisonment for up to 1-year
2. Fine which may be twice the amount of the cheque or both.

Procedure for Sending a Cheque Bounce Notice in Patna

Step 1- Legal Advice: It is recommended that you seek legal advice from a lawyer who focuses on matters involving bounced cheques in Patna. They can help you navigate the court system and make sure your notice conforms with all applicable laws in Patna.

Step 2- Legal Notice Drafting: The attorney will draft a legal notice in your place. This notice ought to contain information on the date and amount of the returned cheque, the explanation for the dishonour, and a request for payment within a predetermined window of time in Patna (often 15 to 30 days).

Step 3- Stamp Paper: Legal notices are typically written in India on stamp paper that is suitable in value. The value of the stamp paper needed for your notification will be discussed with you by the attorney in Patna.

Step 4- Sending the Notice: To guarantee that the receiver receives the notice, it should be sent via registered post with acknowledgement in Patna. For your records, be sure to preserve a copy of both the notice and the mail receipt.

Step 5- Waiting Period: Waiting period is time taken by the recipient to reply to the legal notice for the predetermined amount of time, which is often 15 to 30 days, after sending it. You have the option to file a lawsuit in court if they don't comply or if they fight the demand for payment.

Step 6- Making a Complaint: The applicant has the right to register a complaint with the relevant court if the recipient ignores the legal notification or declines to pay. Depending on the amount of the returned cheque, either the Patna District Court or the Patna High Court would handle this in Patna.

Step 7- Court Procedures: Following the filing of the complaint, the defaulter will receive a summons from the court in Patna, and the matter will then continue in accordance with the law.

Frequently Asked Questions (FAQs)

Q1: How can you find out that the cheque is bounced?

A: When the Drawee Bank discovers that the Payee cannot be paid the entire amount on the cheque for any reason, it promptly sends a "Cheque Return Memo" to the Payee's banker, explaining the cause for non-payment. Next, the memo and the dishonoured cheque are delivered to the payee by their banking.

Q2: Who can report a case of a dishonoured cheque?

A: The Drawer is the one who files a case of cheque bounce since the complaint or case of cheque dishonouring is filed at the location where the cheque was submitted for honouring. It is possible to initiate a lawsuit for cheque dishonour not only against the individual but also against any organisation that does so.

Q3: Can someone who dishonours a cheque be granted bail in the event that a complaint is made?

A: It is implied that dishonouring a cheque is an offence for which bail may be granted in the event that a complaint is filed against the defendant. However, the court has the authority to issue a non-bailable warrant against you if, after being granted bail, you neglect to show up for court after receiving a summons—a letter requiring your presence on a designated day. The police have the right to make an arrest under such a warrant.

Q4: Is Payee allowed to send the bank the dishonoured cheque again?

A: Within three (three) months of the cheque's expiration date, the payee or the person in possession of the cheque may resubmit it if they believe it will be honoured a second time.

Q5: How long does it take for a bank to notify about a bounced cheque?

A: Typically, banks notify the payee within a few days of the cheque bouncing, accompanied by a "Cheque Return Memo" explaining the reason for non-payment.

Q6: Can a third party file a complaint for a bounced cheque on behalf of the payee?

A: Yes, a third party, such as a legal representative or agent, can file a complaint for a bounced cheque on behalf of the payee.

Q7: What legal actions can be taken against someone who issues a bounced cheque?

A: Legal actions such as filing a criminal complaint under the Negotiable Instruments Act or initiating civil proceedings for recovery of the amount can be taken against the issuer of a bounced cheque.

Q8: Is there a time limit for filing a complaint for a bounced cheque?

A: Yes, complaints for bounced cheques must be filed within the prescribed period, usually within one month from the date of receiving the memo of dishonour.

Q9: Can a cheque be dishonoured due to insufficient funds?

A: Yes, insufficient funds in the issuer's account is one of the common reasons for a cheque to be dishonoured.

Q10: What happens if the issuer of the bounced cheque cannot be located?

A: If the issuer cannot be located, legal notices may be published in newspapers, and efforts are made to locate the individual before proceeding with legal action.

Q11: Is it possible to recover legal expenses incurred due to a bounced cheque case?

A: Yes, the court may order the issuer of the bounced cheque to reimburse the payee for legal expenses incurred during the legal proceedings.

Q12: Can a bounced cheque case be settled out of court?

A: Yes, parties involved in a bounced cheque case can opt for an out-of-court settlement if both parties agree on mutually acceptable terms.

Q13: Can a bounced cheque case affect the issuer's credit score?

A: Yes, bouncing a cheque can negatively impact the issuer's credit score and financial reputation.

Q14: What happens if a post-dated cheque bounces before the date mentioned on it?

A: Even if a cheque is post-dated, it can still be dishonoured if presented before the date mentioned on it due to insufficient funds or other reasons.

Q15: Is there a difference between a bounced cheque and a dishonoured cheque?

A: No, the terms "bounced cheque" and "dishonoured cheque" are often used interchangeably to refer to a cheque that cannot be honoured due to various reasons such as insufficient funds, mismatched signatures, or a closed account.