04/04/2019
Cheque bounce? Do’s and Don'ts
A cheque is a bill of exchange or a kind of document that orders a bank to pay a stated amount from an individual to the one in whose name the cheque has been issued, payable only on demand.
Cheque can said to be bounced/dishonoured when the amount mentioned is not paid to the drawer on being presented to the bank. Some of the reasons for the same can be insufficient amount in the bank, unmatched signature, overwriting on the cheque, presented after expiry i.e. three months, issued on the name of the company but lacks the seal of the company, insolvency of the customer, death of the customer, insanity of the customer, cross cheque, crossed the limit of the overdraft (OD), presented at the wrong branch and more.
What to do when stuck in the scenario?
Good news! Legal remedies are available to deal with the case. Cheque bounce is a criminal offence in India. Covered under Section 138 of the Negotiable Instruments Act. What are your powers?
Demand Notice: You must file and send a demand letter to the drawer within the notice period of 30 days from the date the cheque was returned by the bank on being bounced.
Drafting Complaint: If you don't receive a reply from the drawer in 15 days even after sending the demand letter you must file a complaint in the court within a stipulated time period of 30 days.
Memo of Advocate is important at the time of filing of the suit along with signatures of the complainant.
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