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Cheque Bounce Notice Format

  • Writer: leadindia831
    leadindia831
  • Oct 31, 2023
  • 3 min read

The cheque may bounce for several reasons, including a false date, an inconsistency with the payment amount's words and figures, a discrepancy in the signature, or a damaged cheque. These, however, are just minor causes for checks to bounce, and the drawer can issue another check to correct the error and pay the payee the correct amount.


When a cheque is brought to a bank to be paid and it bounces, the bank will return the cheque and a return memo with a note explaining why it bounced. If the bank rejects the cheque because there is not enough money, Court Notice can be given to the drawer and legal action can be brought against him.


Legal Provisions:

  • Cheques that bounce due to inadequate cash are an offense under Section 138 of the Negotiable Instruments Act and are subject to jail as a result. It states that the person who draws the cheque commits an infraction if the bank returns the cheque unpaid because there aren't enough funds to fulfill it. This happens when the cheque is drawn on an account that a person maintains to pay money to another person. Any legally enforceable obligation or responsibility must be paid off by drawing the cheque. The check must be returned by the bank because the quantity of money to the drawer's account is either insufficient or exceeds the amount outlined in the agreement established with the bank to be paid from the drawer's account. For the offense of a bounced cheque, the drawer may be penalized with up to two years in prison, a fine up to double the value of the cheque, or both.

  • According to Section 144 of the Negotiable Instruments Act, anyone in charge or responsible for the company's business operations at the time the act was committed is guilty of an offense if a company-issued cheque bounces. According to this law, it is an offense for a corporation to bounce a cheque due to insufficient money. When a firm is the drawer of a rejected check, then everyone in charge of and responsible for overseeing the business's operations, including the company itself, is guilty of the crime of check bounce and faces the corresponding penalties. If it can be demonstrated that a company committed a cheque bounce offense with the knowledge, complicity, or convenience of its director, secretary, manager, or other officers, those individuals shall be held responsible and punished in a suitable manner.

When to Issue a Cheque Bounce Notice

The following requirements must be met to submit a notice of cheque bounce and pursue legal action:

  • The payment made with the cheque must go towards a debt.

  • Within six months of the check's validity, the beneficiary was required to present it.

  • The bank must have returned the cheque because there wasn't enough money to cover it.

  • Within 30 days after learning from the bank that there are insufficient funds, the payee issues a written demand for payment in the form of a Lawyer Notice.

  • Within 15 days of receiving the notice that the cheque bounced, the cheque drawer fails to pay the specified sum of money.

  • Legal action must be started within a month following the cause of action's emergence.

Filing a lawsuit after a cheque bounces

To send a notice that a cheque has bounced and to file a lawsuit, the next actions are necessary:

  • The payee must send cheque bounce notices to the defaulter via registered mail (or Speed Post) acknowledgment within 30 days of the dishonored cheque.

  • The notification of a bounced cheque must follow the correct format and include the following details: the nature of the transaction, the amount, the date the cheque was deposited, the date it bounced, the cause of the bounced cheque, and a request for payment within 15 days.

  • The payee must launch a criminal action in court after 30 days of the notice period's expiration if the check defaulter does not pay after receiving notice that payment is due within 15 days. In the city where the cheque was presented, a court must be contacted to register a complaint for cheque bounces.

  • Following Section 138 of the Negotiable Instruments Act, the court will hear the matter when it has been filed and issue summonses.

  • The cheque defaulter would then need to provide surety and show up in court to get the issue resolved.

Lead India offers a range of legal services, including online tools and free legal advice. The best course of action is to talk to a lawyer and ask a legal question.


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