Answer By law4u team
The procedure to file a cheque bounce case in India is governed by Section 138 of the Negotiable Instruments Act, 1881, which deals with dishonor of cheques due to insufficient funds or if the cheque is returned for other reasons. Here’s the step-by-step procedure to file a cheque bounce case: 1. Cheque Dishonor (Bounce) Occurs: A cheque is presented for payment, but it is dishonored by the bank due to reasons such as insufficient funds, account closed, or signature mismatch. The bank issues a memo or return memo indicating the reason for dishonor. 2. Sending a Legal Notice: Time Frame: After the dishonor of the cheque, the payee (complainant) must send a legal notice to the drawer (issuer of the cheque) within 30 days from the receipt of the memo from the bank. Contents of the Notice: The notice must demand the payment of the cheque amount within 15 days from the date of receipt of the notice. The notice must be sent through a registered post or speed post to ensure legal validity. Purpose of the Notice: The legal notice serves as a final demand for payment before initiating legal action. It provides the drawer with an opportunity to settle the issue amicably. 3. Wait for the Response: The drawer has 15 days from the receipt of the legal notice to make the payment or to reply with a valid reason. If the drawer does not make the payment or does not respond within this time frame, the payee can proceed with legal action. 4. Filing a Complaint in Court: Time Frame: If the drawer does not pay the cheque amount within the stipulated 15 days, the payee can file a complaint under Section 138 of the Negotiable Instruments Act in a Magistrate Court within 30 days of the expiration of the notice period. Court of Jurisdiction: The complaint is usually filed in the court within whose jurisdiction the cheque was presented for payment or the cheque was dishonored. 5. Required Documents: The following documents must be submitted with the complaint: The original dishonored cheque. The bank memo or return memo issued by the bank stating the reason for dishonor. The legal notice sent to the drawer. Proof of delivery of the notice (e.g., acknowledgment receipt from registered post or speed post). Copy of the complaint and other supporting documents, such as the transaction agreement, if applicable. 6. Court Proceedings: The court will issue a summon to the drawer, asking them to appear in court for trial. In case the drawer admits to the dishonor and the offence, a guilty plea may be entered, and the court may pass a judgment. If the drawer denies the charge, the case will proceed to trial where both parties will present their evidence. 7. Penalties for Cheque Bounce: Under Section 138, the drawer can face imprisonment for up to 2 years or a fine which may extend to twice the cheque amount, or both. The court will determine the appropriate penalty based on the facts of the case. 8. Alternative Remedies: In case of a cheque bounce, the payee may also approach the Civil Court for the recovery of the cheque amount in addition to the criminal proceedings under Section 138. Mediation or Settlement: Sometimes, parties can resolve the matter through settlement or negotiation before it goes to trial. Conclusion: To file a cheque bounce case in India, the payee must send a legal notice within 30 days of receiving the dishonor memo from the bank. If the drawer fails to make payment within 15 days of receiving the notice, the payee can file a complaint in court under Section 138 of the Negotiable Instruments Act within 30 days. The legal action can result in penalties, including imprisonment and fines, for the drawer.
