Cheque Bounce / Dishonor of Cheque

Section 138. of NI Act. deals with Dishonor of cheque for insufficiency, etc., of funds in the accounts

Notice:

When a case of cheque bounce is presented before the advocate and on the request of the client, an advocate has to issue a legal notice to the person who issued the cheque within 30 days from the date of the cheque bounce and call for amicable settlement / demand the amount for which cheque was bounced providing 15days to respond and settle the matter and also attach a copy of memo received from the bank.

The Opposite Party has 15 days from the receipt of the notice to settle the matter and not from the notice sent date. No cause of action arises and client needs to wait for the period of 15 days given to the opposite party response and settles the matter that’s the end. If opposite party did not respond or does not want to settle the matter within the given time of 15 days after completion of the given period, then the holder of the cheque can file a criminal case before appropriate court jurisdiction within 30 days of the of the expiry of given time. In case, it is beyond the said period of 30 days, the delay can be condoned by the court on sufficient cause being shown.

Filing complaint:

The complaint needs to be filed before the jurisdictional magistrate within 30 days from the accrual of the cause of action. The complainant needs to be present before the magistrate at the time of filing. A complaint should be filed in the jurisdiction of the accused bank as most of the courts are not acceptable in the jurisdiction of complainant bank. The Hon’ble judge will pass it over to the Section for check and put up where section employees verify that the jurisdiction, documents.If satisfied the file will be sent to Hon’ble Judge. At the time of check and Put up the original documents need to be shown to the appropriate authority.