Cheque Bounce Notice Format - Section 138 Cases

This cheque bounce notification format can be used as a template to inform the check drawer of the bounce problem. Details such as the cheque number, amounts, and the reason for the bounce should be precisely stated.

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How to Escape from Cheque Bounce Case

There are a few ways to reduce the consequences or avoid legal fines if someone is dealing with a cheque bounce case:

Amicably address the issue: The drawer can get in touch with the payee and work out a solution before the cheque bounce notice becomes a formal complaint. Repayment of the cheque amount plus any other fees or penalties may be required as part of an out-of-court settlement.
Bargain for a smaller sum: If the drawer is unable to pay the entire amount at once, they may be able to bargain for a smaller payment amount or longer payment terms.
Give a good explanation for the bounce: The drawer may include a rationale for the bounce in the notice response and pursue legal action to prevent additional fines if the cheque bounced for technical or bank problems.
Get legal counsel: It’s crucial to get professional legal representation if the issue goes to court. By skillfully presenting the case, a lawyer can lessen the effects.

Make a concession and issue a new cheque: To avoid legal action, the drawer may occasionally write a new cheque to cover the unpaid balance.

Cheque Bounce Notice under Section 138 Format

The cheque bounce notice under Section 138 format is the same as the general format mentioned earlier. The only difference is that the legal reference to Section 138 should be explicitly included, which states that the drawer has committed an offense under the provisions of the Negotiable Instruments Act.

In the notice, the sender should clearly state that the drawer has violated Section 138 and that legal action will be pursued unless the amount is paid within the specified time frame.

Cheque Bounce Notice Causes

Payees and drawers can handle the problem more effectively if they are aware of the various reasons why a cheque bounce notification may occur:

1. Account Closed: A bounce may occur if the drawer’s account is closed or if the cheque is post-dated.

2. Technical Errors: Incorrect information on the cheque, such as the date or amount, can occasionally cause a bounce.

3. Old Cheques: A cheque will be returned if it is submitted after the expiration date.

Cheque Bounce Notice – Legal Action, Penalties

If the drawer fails to pay the remaining amount after being notified that the cheque bounced, legal action may be taken.

The following are the consequences for a bounced cheques:

Penalty: The drawer may be subject to a fine of up to twice the amount of the cheque.
Imprisonment: Up to two years in prison may be imposed in specific circumstances.
Both fines and jail time: In certain situations, both sanctions may be used.

Cheque Bounce Notice – Remedies

Negotiation: To resolve the issue before it gets out of hand, the drawer can speak with the payee.
Legal Defence: The drawer may present proof to fight off legal action if the cheque bounced for fraud or bank mistakes.

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Consequences of Cheque Bounce Notice

In situations where cheque are returned unpaid, a cheque bounce notification is an essential tool for guaranteeing the execution of payment rights. Resolving disputes and recovering the money owed can be facilitated by promptly filing a lawsuit and adhering to the structure for cheque bounce notices under Section 138. To avoid penalties, always be mindful of the legal restrictions and make sure that the procedure is thoroughly followed.

FAQs on Cheque Bounce Notice

1. What is the new rule for cheque bounce?

When a drawer is informed that a cheque has bounced, they have 15 days to reply.

2. What is the permissible time frame for a cheque to bounce?

The drawer has fifteen days from the notice date to make the last payment.

3. Is it feasible to issue a 138 notice after 30 days?

No, within 30 days of the cheque bouncing, the Section 138 notice needs to be sent. Only after the fifteen days following receipt of the notice can the legal proceedings start.

4. How long does it take for a cheque to bounce?

The cheque may bounce if the drawer’s account is not sufficiently funded or if the cheque data contains any irregularities. The drawer typically has fifteen days from the date of receipt to make the payment.

Know more about legal framework for cheque bounce cases with KcorpTax leading lawyers and CA services Company online in India, KcorpTax promoters have 23 year experience in legal laws, Business start-up registration and taxation matter.

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