Cheque bounce is a common problem faced by businesses and individuals when they receive a cheque from someone that is dishonored by the bank due to insufficient funds or other reasons. When a cheque bounces, it not only causes financial loss but also damages the credibility of the person who issued the cheque. In such a situation, it is essential to send a legal notice to the issuer of the cheque to demand payment and recover the amount. In this blog post, we will discuss how to send a cheque bounce notice in a legally compliant manner.
What is a Cheque Bounce Notice?
Table of Contents
A Cheque bounce notice is a legal document that serves as a formal notice to the issuer of the cheque, informing them of the dishonor of the cheque and demanding payment of the amount due. This notice is usually sent by the beneficiary of the cheque and serves as a warning to the issuer of legal action if the payment is not made within the stipulated time.
Key Elements of a Cheque Bounce Notice
A cheque bounce notice should contain the following key elements:
- Name and address of the issuer of the cheque
- Date and amount of the bounced cheque
- Bank name and branch where the cheque was issued
- Reason for dishonoring the cheque
- Demand for payment of the amount due
- Mention of the legal action that will be taken if payment is not made
- Time limit for payment of the amount due
How to Send a Cheque Bounce Notice?
Here are the steps to follow while sending a cheque bounce notice:
Consult a Lawyer: Consult a lawyer to understand the legal implications and the format of the notice. A lawyer will help you draft a legally compliant notice and provide guidance on the legal action that can be taken in case of non-payment.
Draft the Notice: Draft the notice with all the key elements mentioned above. Make sure to keep the language formal and professional.
Send the Notice: Send the notice to the issuer of the cheque through registered post or courier with acknowledgment due. This will ensure that you have proof of the delivery of the notice.
Follow-up: Follow up with the issuer of the cheque to ensure that the payment is made within the stipulated time. If the payment is not made, consult a lawyer to take legal action.
Legal Action that can be taken for Non-Payment
If the payment is not made within the stipulated time, the beneficiary of the cheque can take legal action against the issuer of the cheque. The following are the legal options available:
Filing a Criminal Complaint: The beneficiary can file a criminal complaint against the issuer of the cheque under Section 138 of the Negotiable Instruments Act. This can result in imprisonment or a fine or both.
Filing a Civil Suit: The beneficiary can file a civil suit for recovery of the amount due along with interest and legal costs.
Conclusion
In conclusion, cheque bounce is a serious issue that can cause financial loss and damage the reputation of the beneficiary of the cheque. Sending a cheque bounce notice is the first step in recovering the amount due. A cheque bounce notice should contain all the key elements, and it should be sent through registered post or courier with acknowledgment due. Legal action can be taken if the payment is not made within the stipulated time, and the beneficiary can consult a lawyer for guidance on the legal options available.