A case of cheque bounce is a legal circumstance where a person's or entity's issued cheque is rejected by the bank upon delivery because there isn't enough money in the account or for other reasons. It is a type of non-payment or financial default that is punishable by law in India under Section 138 of the Negotiable Instruments Act.
The beneficiary of a returned cheque may file a lawsuit against the issuer, seeking reimbursement for the amount specified in the cheque as well as any additional fines or fees permitted by law.
Required Documents to File a Case for Cheque Bounce
In order to file a case for a bounced cheque in India, the following documentation is usually required:
Original Cheque: As proof of the transaction, the original copy of the dishonoured cheque is crucial.
Legal Notice: A copy of the written demand for payment within the allotted time that was sent to the person who issued the cheque. Usually, this notice is delivered within 30 days of the dishonor date.
Postal or courier receipts: These serve as evidence that the legal notice was delivered to the issuer and are crucial in proving that the notice was delivered.
Cheque Return Memo: This is the bank-issued document that explains why a cheque was returned unpaid, such as insufficient money, an account closure, a misaligned signing, or any other pertinent cause.
A copy of the bank record or passbook that shows the dishonoured cheque and provides proof of insufficient money or other reasons why it was dishonoured.
Acknowledgment Receipt: If the issuer accepts and acknowledges the legal notice, a copy of the acknowledgment receipt may be required as proof of that fact.
Affidavit and Power of Attorney: An affidavit authenticating the case's facts may be required in some circumstances. A power of attorney can also be required if the complaint designates a representative or attorney to act on behalf of the complainant.
Time Limit for Check Bounce Cases
In India, the time limit for filing a check bounce case is generally within 30 days from the date of receiving the dishonoured check, as specified under Section 138 of the Negotiable Instruments Act, 1881. The 30-day period starts from the date of receipt of the dishonoured check memo from the bank. It is important to initiate legal proceedings within this time frame by sending a legal notice to the defaulter.
However, it is advisable to consult with a legal professional to ensure compliance with specific jurisdictional requirements and any potential amendments to the law.
Procedure for Filing a Case on Cheque Bounce
To file a case on cheque bounce in India, the following procedure is generally followed:
Issuing a legal notice: The first step is to issue a legal notice to the defaulter within 30 days from the date of receiving the dishonoured cheque. The notification must stipulate that the cheque's balance be paid within 15 days after the date of receipt.
Waiting period- If the defaulter fails to make the payment within the time specified in the legal notice, a 15-day waiting period begins from the date of the notice.
Filing a complaint: If the defaulter still fails to make the payment within the waiting period, a complaint can be filed before the appropriate Magistrate's Court or the jurisdictional court where the cause of action arose.
Required documents: The necessary documents for filing a case include the original dishonoured cheque, copy of the legal notice, postal receipts, and any other supporting documents like the bank statement or evidence of the transaction.
Court proceedings- The complaint will be reviewed by the court, and the defaulter may be summoned. There will be a chance for each side to make their case and offer proof to back it up.
Verdict and appeal: After examining the evidence and hearing both parties, the court will deliver its verdict. If dissatisfied with the decision, either party may file an appeal with a higher court.
You will need the help of lawyers to save you from cheque bounce cases by being vigilant about the time limit in a cheque bounce case. You can hire corporate lawyers in Gurgaon if you need legal counsel in a case involving a company in Gurgaon and a bounced cheque, and corporate lawyers in Noida if you need legal counsel in a case involving a company in Noida and a bounced cheque. Similarly, if you require legal counsel for a situation involving a Delhi-based corporation and a cheque bounce, you can hire corporate lwyers in Delhi.
For any type of legal consultation, you can consult and talk to a lawyerat Lead India. You could get online legal advice in India for free. Along with ask a legal question, you can also receive free legal advice in India in return from Lead India.
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