Cheque Bounce Lawyers

In India, when a cheque is presented to the bank but is dishonoured (bounces) due to reasons like insufficient funds, closed account, signature mismatch, etc., it may give rise to a criminal offence under Section 138 of the Negotiable Instruments Act, 1881.

·      Section 138 makes it a punishable offence to issue a cheque that is dishonoured when it was issued for repayment of a legally enforceable debt or liability.

·      Penalties can include up to 2 years’ imprisonment, a fine up to twice the cheque amount, or both.

·      Recent court guidelines aim to discourage undue delays and resolve cases faster, including digital notice delivery and quicker disposal timelines.

👉 Important procedural steps:

·      Bank memo: You receive a Cheque Return Memo from the bank when the cheque bounces.

·      Legal notice: You must send a demand notice to the drawer within 30 days of receiving the memo.

·      Wait period: The drawer gets 15 days from receipt to pay the cheque amount.

·      File complaint: If not paid, you can file a criminal complaint before a Magistrate Court within 30 days after the notice period expires.

Step 1: Receiving the Bank Memo

When a cheque is dishonored, the bank issues a "Cheque Return Memo" stating the reason for non-payment. This memo is crucial evidence in a cheque bounce case.

Step 2: Issuing a Legal Notice

Within 30 days of receiving the cheque return memo, the payee must send a legal notice to the drawer, demanding payment of the cheque amount. The notice should include:

·     Details of the cheque (number, date, amount).

·     Reason for dishonor.

·     A demand for payment within 15 days.

Step 3: Waiting for the Drawer’s Response

The drawer has 15 days from the receipt of the legal notice to make the payment. If no payment is made, the payee can proceed with legal action.

Step 4: Filing the Complaint

If the drawer fails to respond, the payee has up to 30 days to file a complaint in the appropriate magistrate’s court. The complaint must include:

·     The original dishonored cheque.

·     The bank memo.

·     A copy of the legal notice and proof of delivery.

Step 5: Attending Court Proceedings

Once the complaint is filed:

·     The court issues a summons to the drawer.

·     Both parties present evidence and arguments.

·     The court evaluates the case and delivers its judgment.

A good lawyer will help with:

✔️ Pre-Court Work

·         Reviewing reasons for dishonour.

·         Drafting & sending legal notices within statutory deadlines.

·         Advising on whether you have a valid case.

✔️ Court Representation

·         Filing the complaint in the correct court (usually JMFC or Metropolitan Magistrate).

·         Presenting evidence, examining witnesses, cross-examining the opposite party.

·         Negotiating compounding (settlement) — which in some cases, even the Supreme Court says can avoid jail if parties reach an agreement.

✔️ Defence Work

For accused:

·         Draft replies to notices.

·         Argue legal defences (invalid notice, no enforceable debt, etc.).

·         Apply for bail and defend in trial.

If you’ve experienced a cheque bounce, follow these steps to ensure swift action:

1. Retain the Cheque Return Memo: Collect the dishonored cheque and the bank-issued return memo as evidence.

2. Consult a Lawyer: Seek legal advice to understand your options and next steps.

3. Issue a Legal Notice: Your lawyer will draft and send a demand notice to the drawer, demanding payment within 15 days.

4. File a Complaint: If the drawer doesn’t respond or refuses to pay, your lawyer will file a criminal complaint in court.

5. Attend Court Hearings: Work with your lawyer to present your case effectively and ensure compliance with legal requirements.

Our team holds certifications and accolades in various areas of law, including:

Negotiable Instruments Act
Commercial Dispute Resolution
Criminal and Civil Litigation
Mediation and Arbitration
These qualifications, combined with practical experience, make us well-equipped to handle even the most complex cheque bounce cases.