Customer Check Bounce Over 30 Days Ago - Check Valid for another 20 Days?
2 years ago
Dear Advocates,
We run a business in Hyderabad and our customer is also from Hyderabad
Our customer check for Rs 95,000 bounced on June 18th.
The customer has been telling they will send money by RTGS. Hence we did not send any legal notice so far.
Payment has not been received. Now they are not taking our calls.
The check is valid for another 20 days.
In such a scenario should we deposit the check in the bank once again and then if it bounces again send an advocate legal notice or is there any other better option?
Kindly advice.
Thank you
A.Dear Sir,
You may wait for another 15 days then present the cheque within validation period and take cheque bounce endorsement from the Bankers and file a cheque bounce case after issuing legal notice.
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You may wait for another 15 days then present the cheque within validation period and take cheque bounce endorsement from the Bankers and file a cheque bounce case after issuing legal notice.
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Tanmoy Chattopadhyay
Responded 2 years ago
A.Since the cheque is valid for another 18-20 days it is important that without losing any further time you present the cheque before the bank and if it is dishonoured again then within 30 days of such dishonour send a legal notice for payment to the drawer who will have 15 days after receipt to make good the dues. If he fails to do that within that time then you will be having 30 days thereafter to file a case before the court under section 138 of Negotiable Instrument Act 1881. Since the procedure under NI act is summary so this is the most effective and efficient route since you will have the advantage of presumptions in your favor. But the roads beyond NI is not closed as far as recovering the money from the drawer is concerned which can be effected through a money or commercial suit as the case may be which is undoubtedly more protracted and cumbersome exercise best avoided.
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Advocate Sinjari Bandyopadhyaya
Responded 2 years ago
A.It is necessary on your part to deposit that cheque once again within that validity period so that if that cheque has been dishonoured again,then you can be entitled to give Notice of demand within 30 days therefrom directing that payee to make payment within 15 days from the date of receipt of such notice and in default thereof within 30 days,you are entitled to lodge complaint u/s 138 of the Negotiable Instruments Act,1881,as amended up to date.
After the Negotiable Instrument (Amendment) Act, 2018- Section 143A empowers the Court while trying an offence under Section 138 of the NI Act, to direct the drawer of the cheque to pay interim compensation to the complainant on two occasions:
(a) in a summary trial or summon case, where the drawer pleads not guilty to the accusation made in the complaint and
(b) in any other case, upon framing charges.
The payment of interim measures ensures that the interest of the Complainant is protected in the interim period before the charges are proved against the Drawer. The intent behind this provision is to provide aid to the Complainant during the pendency of the proceedings under Section 138 of the NI Act. The quantum of such interim compensation would be upto 20% of the amount of the cheque. If the Drawer is found guilty under Section 138, the amount of interim compensation would be deductible from the final compensation payable to Complainant. Being equitable, the Section also does not prejudice the Drawer in case of his acquittal by the Court. In such a case, the Court shall order the Complainant to return the amount of interim compensation to the Drawer within a period of 60-90 days along with interest thereon.
You are also entitled to file Money Suit before the Civil Court for recovery of that sum along with interest.
After the Negotiable Instrument (Amendment) Act, 2018- Section 143A empowers the Court while trying an offence under Section 138 of the NI Act, to direct the drawer of the cheque to pay interim compensation to the complainant on two occasions:
(a) in a summary trial or summon case, where the drawer pleads not guilty to the accusation made in the complaint and
(b) in any other case, upon framing charges.
The payment of interim measures ensures that the interest of the Complainant is protected in the interim period before the charges are proved against the Drawer. The intent behind this provision is to provide aid to the Complainant during the pendency of the proceedings under Section 138 of the NI Act. The quantum of such interim compensation would be upto 20% of the amount of the cheque. If the Drawer is found guilty under Section 138, the amount of interim compensation would be deductible from the final compensation payable to Complainant. Being equitable, the Section also does not prejudice the Drawer in case of his acquittal by the Court. In such a case, the Court shall order the Complainant to return the amount of interim compensation to the Drawer within a period of 60-90 days along with interest thereon.
You are also entitled to file Money Suit before the Civil Court for recovery of that sum along with interest.
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Vaidehi Samant
Responded 2 years ago
A.Yes you can deposit the cheque and it it bounces you may go ahead with legal notice claiming such amount and giving time of 15 days and if not replied or complied by them in 15 days you may proceed ahead with filing 138 complaint under N.I. Act for dishonour of instrument. Thank you.
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Ayantika Mondal @ Prime Legal
Responded 2 years ago
A.Hi,
Cheque bounce is a criminal offence stipulated under Section- 138 of the Negotiable Instruments Act, 1881. However, in case of a cheque bounce, the aggrieved party can file a criminal as well as a civil suit against the accused. Send a formal demand legal notice/ letter to the drawer within the stipulated time of 30 days from the date the cheque was presented and returned back by the bank to the drawee. The legal notice must insist the amount (as mentioned in the cheque) from the drawer. The notice must also mention that if the amount is still not paid within the stipulated time period of 15 days, then appropriate legal action as prescribed under the Negotiable Instruments Act, 1881 shall be instituted against the drawer.
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Cheque bounce is a criminal offence stipulated under Section- 138 of the Negotiable Instruments Act, 1881. However, in case of a cheque bounce, the aggrieved party can file a criminal as well as a civil suit against the accused. Send a formal demand legal notice/ letter to the drawer within the stipulated time of 30 days from the date the cheque was presented and returned back by the bank to the drawee. The legal notice must insist the amount (as mentioned in the cheque) from the drawer. The notice must also mention that if the amount is still not paid within the stipulated time period of 15 days, then appropriate legal action as prescribed under the Negotiable Instruments Act, 1881 shall be instituted against the drawer.
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A.Hi,
When the cheque bounces, the first step is to send the cheque bounce notice to the drawer and request him to pay the amount. If he does not comply with the notice, then legal action can be taken against him. You can approach the court.
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When the cheque bounces, the first step is to send the cheque bounce notice to the drawer and request him to pay the amount. If he does not comply with the notice, then legal action can be taken against him. You can approach the court.
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