A cheque bounce lawyer helps their clients with dishonored cheque issues. A cheque bounce typically means denial of payment for a cheque that’s written to someone eligible to withdraw it.
Cheque bounce with malicious intent on the issuer’s part is a punishable crime, one that often reaches the court and leads to disputes. A cheque bounce attorney helps their clients reserve their rights amid legal battle, creates their case, and most importantly, helps them navigate through the Section 138 NI Act, which handles cases regarding dishonored cheques.
Through this blog post, we have discussed how a cheque bounce advocate helps their client get justice through a guided legal procedure.
Avoid Future Cheque Issues: Discover practical tips to Prevent Cheque Bounce Situations
Understanding Cheque Bounce Case
When a cheque bounces because of insufficient funds, the drawer is held liable for a criminal offense against them under Section 138 of the NI Act (Negotiable Instruments Act).
In this case, the issuer can be punished up to twice the amount written in the cheque. It can also lead to imprisonment for two years alongside the cheque bounce fine. Additionally, the court can sue an issuer for the cheque amount.
A cheque bounce lawyer helps protect your rights when you have received a cheque that’s dishonored. A dishonored cheque means that the bank has refused to pay the amount on the cheque. A cheque bounce lawyer will assist you through the legal process of reserving your rights and help you against a cheque bounce lawsuit.
Know Your Legal Remedies: Explore the legal consequences of cheque bounce cases under the NI Act.
What are the Reasons for A Cheque Bounce?
The following are the common reasons why cheques get dishonored:
Insufficient Funds: The most common reason for a cheque to bounce is due to insufficient funds in the issuer’s account.
Signature Mismatch: When the signature of the issuer doesn’t match one that’s registered in the bank, it causes their cheques to bounce due to security reasons.
Account Closure: When an issuer draws a cheque on a closed account, it bounces.
Overwriting on the Cheque: Alteration on the cheque without authentication also makes a cheque bounce.
Difference in Amounts: When there’s a difference in the amount written in numerical and in words, it causes the cheque to bounce.
Payment Stopped by Drawer: The issuer can instruct the bank to deny payment, making the cheque bounce.
Know Your Defense: Explore the Legal Remedies Available Under Section 138 for the accused parties.
How Does a Cheque Bounce Lawyer Help You?
When a payee (the individual the cheque is written to) gets a dishonored cheque, they can seek help from a cheque bounce attorney. The lawyer can help them through the legal complexity of getting their due payment.
1. Legal Advice and Strategy
A cheque bounce lawyer works as a legal advisor to individuals who are dealing with a case of cheque bounce.
Understanding Your Legal Rights: First, they help you understand the implications of a bounced cheque. Next, they help you file a complaint under Section 138.
Analyzing Your Case: They go through different steps, like analyzing the case, the specifics of your situation, and the reason for your cheque getting bounced. In many cases, the cheque can bounce due to validity issues. They also help you prepare for potential defenses an issuer might raise against the attempt at withdrawal.
Developing a Strategy: Once your cheque bounce attorney is confident in the reasons for the bounce after a thorough analysis, they start building a strategy. The strategy could involve sending a legal notice, filing a court complaint, or negotiating a settlement with the issuer.
2. Drafting and Sending Cheque Bounce Legal Notice
After a cheque bounces due to a specific reason, the drawer is liable. In this case, the lawyer working with the payee can send a legal action for cheque bounce to the issuer. The lawyer sends the notice under the Section 138 of the Negotiable Instruments Act.
A legal notice serves two objectives at this stage of the case:
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Informing the Issuer |
Establishing a Legal Ground |
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This action informs the issuer about the dishonored cheque. |
The notice serves as a legal document of communication. If the case were to reach the court, the notice serves as evidence on the drawer’s part. |
The cheque bounce lawyer ensures to send the legal notice within thirty days of the payee receiving a return memo from the bank.
When writing the legal notice for the cheque, the issuer and their lawyer must ensure to follow these points:
- Write a notice headline, preferably – "Legal Notice for Dishonour of Cheque.”
- The number of cheques that bounced.
- The date of the issuer writing the cheque.
- Amount written on the cheque.
- Where did the payee try to cash out the cheque?
- The date of the cheque getting dishonored.
- Reason for a cheque bounce.
3. Representing You in Court
A cheque bounce lawyer is also responsible for legally representing a payee in court. The cheque bounce attorney takes the following steps to ensure that your rights are secure:
Filing the Complaint: Once the notice is sent and the issuer fails to give an explanation and the payment, the lawyer can file a criminal complaint on behalf of the payee.
Presenting Evidence: The lawyer will start by gathering all the information, such as the necessary evidence, the bounced cheque, the bank memo, and the legal notice supporting your claim.
Cross-Examination: The lawyer can cross-examine the witnesses of the issuer when they dispute the claim and expose inconsistencies in their claim to solidify your case.
Negotiating Settlements: A lawyer will also negotiate the settlement on your behalf. They typically negotiate a settlement with the issuer, either inside or outside the court. Their services would help you recover the debt without investing more time and money through a complex litigation process.
Protecting Your Interests: Furthermore, the responsibility of a cheque bounce lawyer is to ensure that your rights are safe and you receive your due compensation.
Understand Penalties: Learn about the Punishments and Fines for Cheque Bounce in India.
4. Handling False Accusations
A cheque bounce lawyer also works on behalf of the issuer. There are many instances of drawers filing false cases of cheque bounces with malicious intent. If there are reasonable causes with valid proof, a cheque bounce lawyer can file a counter-case against the malicious prosecution.
Also, when the false acquisition damages the client’s reputation, the lawyer can file a case of defamation against the person to whom the cheque was issued. In this case, the concerned individual must pay compensation for financial losses incurred by the issuer.
In some cases, a lawyer can file a civil suit to protect their clients’ interests and address potential misuse of the cheque.
5. Ensuring Compliance and Enforcement
Another part of the responsibilities a cheque bounce lawyer has is to ensure compliance and enforcement by the court.
Court Judgments: If the court is ruling in your favor, the lawyer will ensure the judgment gets enforced and you get the payment or a penalty as ordered by the court.
Negotiating Settlements: Even after the judgment, the lawyer can negotiate on their client’s behalf for a settlement. Their action in this case is mainly to expedite the recovery process. Once the case is closed, the lawyer also takes care of the document preservation part. This includes taking care of legal notices, court orders, payment information, and return memos.
Know Your Legal Options: Understand the difference between filing a Civil Case vs. Criminal Case in Cheque Bounce Matters.
Filing a Cheque Bounce Case: The Process
Step 1: Sending a Legal Notice
First, the payee has to send a legal notice to the drawer within 30 days of getting a cheque dishonored. The notice should ask for the payment of the cheque amount.
Step 2: Wait Time of 15 Days
The issuer has fifteen days to settle the case and compensate the payee with the amount payable (amount on the cheque).
Step 3: Filing a Complaint
The payee can file a complaint before the Magistrate’s Court within 30 days in case the payee fails to complete the payment.
Step 4: Court Proceedings
The court will summon the drawer and start the proceeding.
Step 5: Evidence Required
The complaint must present the cheque that was dishonored, a copy of the legal notice, the bank return memo, and proof of delivery.
Protect Yourself from Harassment: Learn how courts handle False Cheque Bounce Allegations.
Should You Consult a Cheque Bounce Lawyer?
In essence, a cheque bounce attorney is the legal helper to payees who receive a bounced cheque. Not only does the lawyer help them recover their payment, but they also protect and secure the payee’s rights throughout the process. They work as a legal guide to elaborate on Section 138 of the NI Act, file a complaint against the issuer on the payee’s behalf, and assist them in getting fair compensation.
As a legal guide, they protect your rights and your financial interests. If you’re in a similar situation, it’s a wise decision to consider help from a cheque bounce lawyer and get fair compensation served to you fast.
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