Cheque Bounce Legal Notice Format
चेक बाउंस कानूनी नोटिस प्रारूप — धारा 138 परक्राम्य लिखत अधिनियम
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Generate Cheque Bounce NoticeSection 138 — Cheque Bounce Law in India
When a cheque issued for the discharge of a debt or liability is returned unpaid by the bank ("bounced"), the drawer commits an offence under Section 138 of the Negotiable Instruments Act, 1881. The payee (person to whom the cheque was issued) has the right to send a legal demand notice and, if the drawer fails to pay, file a criminal complaint.
Important Timeline: You must send the legal notice within 30 days of receiving the bank memo about dishonour. The drawer then gets 15 days to make payment. If unpaid, file a complaint within 30 days after the 15-day period expires.
Step-by-Step Procedure for Cheque Bounce Case
Cheque Gets Dishonoured
Bank returns the cheque unpaid with a memo stating the reason (insufficient funds, account closed, signature mismatch, etc.).
Send Legal Notice Within 30 Days
Send a written demand notice to the drawer via Registered Post AD within 30 days of receiving the bank's dishonour memo.
Wait 15 Days for Payment
The drawer has 15 days from receipt of notice to make the payment. If payment is made, the matter is resolved.
File Criminal Complaint
If unpaid, file a complaint under Section 138 before a Magistrate within 30 days after the 15-day notice period expires.
Sample Cheque Bounce Legal Notice Format
LEGAL NOTICE
(Under Section 138 of the Negotiable Instruments Act, 1881)
Date: [Date of Notice]
To,
[Name of Drawer]
[Complete Address]
Through: [Advocate Name], Advocate
[Advocate Address]
Subject: Legal demand notice for dishonour of cheque bearing No. [Cheque Number] dated [Cheque Date] for Rs. [Amount]/-
Dear Sir/Madam,
Under instructions from and on behalf of my client, [Payee Name], I hereby serve upon you the following legal notice:
1. That you had issued a cheque bearing No. [Cheque Number] dated [Cheque Date] for a sum of Rs. [Amount]/- (Rupees [Amount in Words] only) drawn on [Bank Name], [Branch] in favour of my client towards the discharge of your legally enforceable debt/liability.
2. That the said cheque was presented by my client at his bank but the same was returned dishonoured on [Bounce Date] with the endorsement "[Bounce Reason — e.g., Insufficient Funds]".
3. That under Section 138 of the Negotiable Instruments Act, 1881, the dishonour of the said cheque constitutes a criminal offence punishable with imprisonment up to two years, or fine up to twice the cheque amount, or both.
4. I hereby call upon you to make the payment of Rs. [Amount]/- within 15 days from the date of receipt of this notice, failing which my client shall be constrained to initiate criminal proceedings against you under Section 138 of the Negotiable Instruments Act, 1881, at your risk, cost and consequences.
Yours faithfully,
[Advocate Name / Sender Name]
Advocate for [Payee Name]
Key Legal Provisions for Cheque Bounce Cases
| Section | Provision | Key Point |
|---|---|---|
| Section 138 | Dishonour of cheque for insufficiency of funds — makes it a criminal offence | Up to 2 years imprisonment + fine up to 2x cheque amount |
| Section 139 | Presumption in favour of holder — the court presumes the cheque was issued for a legally enforceable debt | Burden on drawer to prove otherwise |
| Section 141 | Offences by companies — directors and officers responsible for the company's affairs can be prosecuted | Company + directors both liable |
| Section 142 | Cognizance of offences — complaint must be filed within 30 days after expiry of 15-day notice period | Strict time limit for filing |
| Section 143 | Power of court to try cases summarily — trial to be concluded within 6 months | Summary trial procedure |
| Section 144 | Mode of service of summons — summons can be served electronically | Email/electronic service allowed |
| Section 147 | Offences are compoundable — parties can settle at any stage with court's permission | Settlement possible anytime |
5 Essential Conditions for Section 138 Complaint
- The cheque must have been drawn for the discharge of a legally enforceable debt or liability
- The cheque must have been presented to the bank within its validity period (3 months from date of issue, or revalidation date)
- The cheque was returned unpaid by the bank
- The payee must have sent a written demand notice within 30 days of receiving information of dishonour
- The drawer must have failed to make payment within 15 days of receipt of the demand notice
Common Reasons for Cheque Bounce
- Insufficient funds in account
- Account closed
- Payment stopped by drawer
- Signature mismatch
- Cheque post-dated or stale (expired)
- Overwriting or alteration on cheque
- Exceeds arrangement with bank
- Mismatch in amount (words vs figures)
Note: Section 138 applies primarily when cheque is dishonoured due to insufficient funds or exceeding arrangement. Other reasons like signature mismatch may require a different legal approach.
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Disclaimer: This cheque bounce legal notice format and information is provided for general educational purposes only. It does not constitute legal advice. Laws and procedures may vary based on specific facts and jurisdiction. Always consult a qualified advocate for advice on your specific cheque bounce case. Vakeel360 is not responsible for any consequences arising from the use of this information without proper legal consultation.