Tag: chequebouncelaw

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The Negotiable Instruments Act (NIA) is the primary legislation governing negotiable instruments in India. It was enacted in 1881 and has been amended several times since then. The NIA lays down the timelines for various aspects of negotiable instruments, such as:

• Negotiation: A negotiable instrument can be negotiated within six months of its date of issue or within such longer period as may be specified in the instrument itself.
• Presentment: A negotiable instrument must be presented for payment within a reasonable time after its date of issue or within such shorter or longer period as may be specified in the instrument itself.
• Dishonor: A negotiable instrument is dishonored if it is not paid on presentation. The dishonor of a negotiable instrument must be communicated to the drawer and the indorsers within a reasonable time after the date of dishonor.
• Notice of dishonor: The notice of dishonor must be given in writing and must state the date of dishonor and the reason for dishonor. The notice of dishonor must be sent to the drawer and the indorsers by registered post or by any other means that is reasonably likely to bring the notice to their attention.
• Filing of a complaint: A complaint under Section 138 of the NIA must be filed within 30 days of receiving the cheque bounce memo from the bank.

It is important to note that these are just the general timelines prescribed by the NIA. There may be specific timelines for certain types of negotiable instruments or for certain situations. For example, the timeline for presentment of a bill of exchange is different from the timeline for presentment of a cheque.

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You can file a cheque bounce complaint after the expiry of 15 days from the date of receipt of the cheque bounce notice by the drawer. The complaint must be filed within 30 days of receiving the cheque bounce notice from the bank. If the complaint is not filed within 30 days, you will lose your right to file a cheque bounce case against the drawer.

To file a cheque bounce complaint, you need to visit the magistrate’s court in the jurisdiction where the cheque was dishonored or where the drawer resides. You will need to fill out a complaint form and provide the following documents:

• Cheque bounce memo from the bank
• Demand notice sent to the drawer
• Proof of payment of court fees

Once you have filed the complaint, the court will issue a summons to the drawer. The drawer will be required to appear in court on the date of the hearing. If the drawer is found guilty, the court can punish them with imprisonment for up to two years, or a fine that can extend to twice the amount of the cheque, or both.

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According to Section 138 of the Negotiable Instruments Act, 1881, the payee must send a demand notice to the drawer within 30 days of receiving the cheque bounce memo from the bank. The demand notice must be in writing and must clearly state the amount of the cheque, the date on which the cheque was dishonored, and the reason for the dishonor. The demand notice must also give the drawer 15 days to pay the amount of the cheque.

If the drawer fails to pay the amount of the cheque within 15 days of receiving the demand notice, the payee can file a complaint with the magistrate’s court.

It is important to note that the demand notice must be sent within 30 days of receiving the cheque bounce memo from the bank. If the payee fails to send the demand notice within 30 days, they will lose their right to file a cheque bounce case against the drawer.

If you have received a cheque bounce memo from the bank, it is important to consult with a lawyer to understand your legal rights and options.

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• Section 138 of the Negotiable Instruments Act, 1881 – This section makes it a criminal offense to dishonor a cheque for insufficiency of funds.
• Demand notice – Before filing a complaint with the magistrate’s court, the payee must send a demand notice to the drawer asking them to pay the amount of the cheque within 15 days.
• Complaint – If the drawer fails to pay the amount within 15 days of receiving the demand notice, the payee can file a complaint with the magistrate’s court.
• Summons – Once the complaint is filed, the court will issue a summons to the drawer.
• Trial – If the drawer appears in court and pleads not guilty, the court will hold a trial.
• Punishment – If the drawer is found guilty, the court can punish them with imprisonment for up to two years, or a fine that can extend to twice the amount of the cheque, or both.

In addition to the above provisions, there are a few other things that you need to know about cheque bounce cases:

• The complaint must be filed within 30 days of receiving the cheque bounce notice.
• The complaint can be filed with the magistrate’s court in the jurisdiction where the cheque was dishonored or where the drawer resides.
• The drawer can file a petition for compromise with the payee at any stage of the case.
• If the drawer and payee reach a compromise, the court will dismiss the case.
• If the drawer is convicted and sentenced to imprisonment, they can apply for bail.

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A cheque bounce case in India is a legal proceeding against a person who has issued a cheque that has been dishonored by the bank due to insufficient funds in the account. Cheque bounce is a criminal offense under Section 138 of the Negotiable Instruments Act, 1881.

What to do if you receive a cheque bounce notice

If you receive a cheque bounce notice, the first thing you should do is to send a demand notice to the drawer (the person who issued the cheque) asking them to pay the amount of the cheque within 15 days. If the drawer fails to pay the amount within 15 days, you can file a complaint with the magistrate’s court.

What happens in a cheque bounce case

Once you have filed a complaint with the magistrate’s court, the court will issue a summons to the drawer. If the drawer appears in court and pleads guilty, the court can convict them and pass a sentence. If the drawer pleads not guilty, the court will hold a trial. If the drawer is found guilty, the court can punish them with imprisonment for up to two years, or a fine that can extend to twice the amount of the cheque, or both.