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Draft a Legal Notice for Cheque Bounce Case

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WeVaad: Your Guide to Effortless Legal Notice for Cheque Bounce Resolution

  1. You start by filing your cheque bounce case on our website.
  2. We’ll send a formal legal notice to the other party.
  3. An experienced WeVaad expert is assigned to help resolve the dispute.
  4. Both sides upload their documents and reasons for their case.
  5. The WeVaad expert reviews everything and schedules a meeting.
  6. The expert issues a decision that both sides must follow.

What is a Cheque Bounce?

A cheque bounce occurs when in case of cheque presented for payment at a bank is returned unpaid due to insufficient funds in the issuer’s account or other reasons like a mismatched signature or a post-dated cheque. It’s essentially a failed financial transaction, where the promised payment cannot be made, causing the cheque to “bounce” back to the payee.

In such cases, this situation often necessitates legal action or the issuance of a legal notice for cheque bounce case to the cheque issuer, seeking the payment of the amount owed. Laws and regulations surrounding cheque bounces vary from one jurisdiction to another, and they outline the legal consequences, penalties, and procedures for addressing this issue and ensuring fair and accountable financial transactions.

A Cheque Bounce Notice is a formal communication sent by the payee (the recipient of a bounced cheque) to the drawer (the person who issued the bounced cheque) following a cheque dishonored due to insufficient funds. It serves as a legal requirement in many jurisdictions and demands the payment of the bounced cheque amount within a specified timeframe, usually 15 to 30 days from the notice’s receipt. If the drawer fails to comply with the notice and make the payment, the payee can initiate legal proceedings under Section 138 of the Negotiable Instruments Act or the relevant legal provision in their jurisdiction for the recovery of the owed amount.

When drafting a Cheque Bounce Notice, it’s essential to follow a specific cheque bounce notice format, include all necessary details, and seek legal counsel to ensure that it complies with local laws and regulations. This notice acts as an initial step in the legal process to recover the funds owed as per the bounced cheque.

What is the Cheque Bounce Notice Format?

Essential Information while sending legal notice for cheque bounce

  • The date when the cheque was issued.
  • When the check was presented for payment.
  • The reason for the non-realization of payment.

For the Cheque Bounce Notice to be considered valid, it must adhere to the following criteria

  • It must be under Section 138 of the Negotiable Instruments Act.
  • It should include information about the cheque presentation and of cheque bounce.
  • It must specify the reason for the non-realization of payment.
  • It should mention any requests made to the cheque issuer for immediate payment.
  • Additionally, it’s essential to serve the notice within 30 days of the cheque being returned to the issuer.

Documents Required For Filing a Cheque Bounce Case

  • Original Cheque: In order to prove that the transaction took place and that the bank dishonored the check, the original bounced check must be presented.
  • Legal Notice: Cheque bounce notices are sent to the drawer of bounced checks demanding payment. An official notice is sent to the drawer regarding the dishonored check and offers them the opportunity to make the payment within a specified timeframe.
  • Postal/Courier Receipt: As proof that the legal notice was sent to the drawer, keep the acknowledgment receipt or courier receipt. As a result of following the legal process, you have received this receipt.
  • Cheque Return Memo: Obtain a copy of the Cheque Return Memo or the memo issued by the bank stating the reason for the dishonored cheque. This document is crucial in establishing the fact that the cheque was returned unpaid.
  • Bank Statements: Provide relevant bank statements that show the transaction details, including the deposit of the bounced cheque, subsequent dishonoring, and any related communication from the bank.
  • Account Holder Details: Gather details of the account holder, such as their name, address, and contact information. This information will help identify the drawer of the bounced cheque.
  • Notice of Dishonor: If you receive a Notice of Dishonor from the bank, make sure to retain a copy. This notice serves as official communication from the bank regarding the dishonored cheque.
  • Copy of Complaint: If you have already lodged a police complaint against the drawer of the bounced cheque, provide a copy of the complaint to support your case.
  • Any Correspondence: Preserve any additional correspondence related to cheque bounce, such as emails, letters, or SMS exchanges, as they may serve as supporting evidence.
  • Identification and Address Proof: Carry your identification documents, such as Aadhaar card, PAN card, passport, or driver’s license, as well as address proof documents, such as utility bills or rental agreement, to establish your identity and address.

How Tiered Dispute Resolution Clause Work?

  • Section 138 of the Negotiable Instruments Act, 1881: The purpose of this section is to provide the legal framework for filing a case regarding the dishonoring of a check. In such cases, the document outlines the conditions and procedures to be followed.
  • Legal Notice: In accordance with Section 138, the payee must notify the drawer (the person who issued the cheque) within 30 days of receiving information about the dishonored check from the bank. Payment of the cheque amount must be demanded within 15 days of receipt of the notice.
  • Opportunity to Rectify: Payment must be made within 15 days of receiving the legal notice for the drawer to rectify the situation. The drawer commits a criminal offense if the payment is not made within this time frame.
  • Criminal Offense and Punishment: The dishonor of a cheque is considered a criminal offense under Section 138. If convicted, the drawer may face imprisonment for a term which may extend up to two years, or a monetary penalty, or both. The court has the discretion to impose appropriate punishment based on the circumstances of the case.

  • Jurisdiction: In the case of a check bounce, you must file the case in the court of the bank branch where the payee holds an account.
  • Limitation Period: It is necessary to file a complaint within one month of the expiration of the 15-day period in the legal notice for a cheque bounce case. It may be barred by limitation if the complaint is not filed within this period.
  • Evidence and Burden of Proof: It is the complainant’s (payee’s) responsibility to prove that the check was dishonored. As evidence, the complainant must provide the original bounced check, the Cheque Return Memo, and other relevant documents.
  • Compounding of Offense: Some parties may choose to settle through compounding, in which the drawer agrees to pay a certain sum of money to the payee. Compounding an offense requires the court’s permission.

Choose WeVaad’s online dispute resolution service for your cheque bounce case to save time and effort. Let’s get started!!

WeVaad's Legal Notice Expertise for Efficient Cheque Bounce Resolution

When faced with the challenge of a bounced cheque, WeVaad steps in to provide comprehensive solutions. Our expertise extends to the issuance of a legal notice for cheque bounce, targeting the issuer of the cheque due to insufficient funds. We carefully navigate the legal intricacies and ensure that the payment of the amount owed is pursued diligently. With WeVaad, you can trust our thorough notice to the drawer, backed by our commitment to resolving cheque bounce cases efficiently and effectively.

Check Bounce Case FAQs

What is a Notice Under Section 138?

A Notice Under Section 138 is a legal notice issued to the drawer of a bounced cheque, notifying them of the dishonor of the cheque and demanding payment of the due amount, as per the provisions of Section 138 of the Negotiable Instruments Act.

In cases of cheque bounce, how does online dispute resolution work?

In case of cheque bounce, online dispute resolution involves using digital platforms and tools to communicate with the parties involved, including the cheque issuer and the payee. Through secure online portals or virtual meetings, parties can present their case, provide evidence, negotiate settlements, and ultimately reach a resolution.

Can an online dispute resolution be legally binding?

Yes, the resolution reached through online dispute resolution can be legally binding if the parties involved agree to the terms and conditions set forth during the process. Once an agreement is reached and documented, it holds the same legal validity as a resolution reached through traditional legal proceedings.

If online dispute resolution does not resolve the dispute, what happens next?

It is possible to pursue the case through traditional legal channels or seek arbitration if a resolution cannot be reached through online dispute resolution. In order to ensure the case is successfully resolved, our service can help you transition from one method of resolution to another.

What is the significance of Section 138 of the Negotiable Instruments Act in a cheque bounce case?

Under Section 138 of the Negotiable Instruments Act – a crucial legal provision that deals with the offense of dishonor of a cheque for insufficiency of funds or other reasons, establishing the legal framework for addressing cheque bounce cases in India.