Cheque Bounce Notice

Cheque bounce is the legal action that might be taken at the time of non-payment of a cheque amount on an immediate basis. A cheque bounce is a situation that occurs at the time of non-payment of the amount because of the insufficient balance in the account.

To recover the amount, instant action must be taken. At first, a letter will be sent to the drawer disburse, or else proceeding should be initiated. Sometimes a rapid settlement is done on the letter. It is stated by the negotiable instrument act that cheque bounce is a significant transgression that can be punished by incarceration and penalties or fines. Under the Negotiable Instruments Act, the cheque's drawer must present the cheque within 30 days after the day it was dishonored to safeguard his rights. 

What is a Cheque?

A cheque is a "bill of exchange" that is cashable immediately. The person who writes the cheque is known as the "drawer," while the person to whom it is written is known as the "drawee."

The uses of cheques involve all transactions, including loan repayment, wage payment, payment of bills and fees, etc. Banks handle and pass the vast majority of cheques every day. The purpose of issuing cheques is to obtain documentation of payment. Nevertheless, a lot of individuals continue to rely on checks as a secure form of payment. However, in order to prevent misuse, it is usually desirable to provide crossed "Account Payee Only" cheques.

The following details must be provided:

In order to give notice to the cheque's creator regarding the cheque's bounce:
1) Cheque presentation date
2) Cheque's drawn date
3) Cause for non-fulfillment of payment. 
    • It should be in reference to section 138 of the negotiable instrument act.

    • Cheque presentation information.

    • Reason for non-paying of payment.

    • Information on the demand for prompt payment made to the cheque issuer.

    • A notice must be delivered within 30 days of the cheque being returned to the person who issued it.

      How to send a Cheque Bounce Notice?

A Cheque bounce notice can be generated through our platform. After the drafting is finished, it must be printed on plain paper or on the company letterhead before being handed over to the person who will be cashing the cheque. The following must be included in a cheque bounce notice.

  • Name of cheque beneficiary
  • Name and residence of cheque issuer.
  • The cheque’s return date.
  • Cheque return’s reason.
  • The cheque issuer has been asked for immediate alternative payment, and
  • The cheques have been issued in accordance with Section 138 of the Negotiable Instruments Act.

To properly record the issuance date of the notice, a notice of check bounce is delivered by registered mail. One copy of the letter may be kept by the cheque beneficiary, while the other is sent through registered mail to the cheque issuer.

About the cheque bounce notice issuance:

When and why cheque bounce notice issued?
1) The first prerequisite is that the cheque must go toward the obligation.
2) The beneficiary must produce the cheque within three months of the expiration date.
3) The bank must have returned the cheque since there wasn't enough money.
4) The payee raises demand by providing written notice of a cheque bounce within 30 days of receiving notification from the bank that funds are insufficient.
5) Drawer fails to make payment of the specified amount within 15 days of receiving the written notice of a cheque bounce.
6) Legal action is commenced one month after the cause of action arose.
How can one Start Legal Action If a Cheque Bounces?
1) Within 30 days of a dishonored cheque, the beneficiary sends the defaulter the Cheque Bounce Notice via registered mail. The notice of a bounced cheque must be written properly and include details about the transaction's type, the amount involved, the date the cheque was deposited with the bank, the date the cheque bounced, the cause of the bounce, and the beneficiary's request for payment within 15 days.
2) In the event that the cheque issuer defaults in payment, the payee may bring a criminal complaint in court within 30 days of the expiration of the 15-day notice period.
3) A court in the city where the cheque was presented must be contacted with complaints regarding cheque bounces.
4) A hearing will be held after the case has been admitted in court, and summonses will be issued in accordance with Section 138 of the Negotiable Instruments Act.
5) The cheque defaulter would need to show up in court to get the issue resolved.

The procedure of Cheque Bouncing :

  • The demand notification is delivered within 30 days. The drawer has 15 days after receiving the demand notice to make payment.
  • The notice of a bounced cheque is issued by registered mail in order to establish delivery proof.
  • If payment is due and not received within 15 days, the payee has 30 days to file a complaint with a magistrate.
  • The state where the bank is located must receive a complaint.

Punishment or penalties :

As it is mentioned above that cheque bounce is a significant misdeed, and for that, there are some punishments and penalties or fines decided that are mentioned below:

The court will issue a summons and hold a hearing after receiving the complaint, an affidavit, and any pertinent paper trail. If found guilty, the defaulter faces a financial fine that could be twice the amount of the cheque, a sentence that might be up to two years in jail, or even both. For repeated instances of bounced cheques, the bank also has the right to stop the ability to use a cheque book and close the account.

If the drawer pays the cheque's balance within 15 days of the day they received the notice, they have not broken any laws. If not, from the day the notice's 15-day deadline expired, the payee has one month to file a complaint in the jurisdictional magistrate's court.

Our Role in Obtaining the Cheque Bounce Notice :

  • Our cheque bounce consultants will educate you concerning each and every aspect of the cheque bounce notice, including how to get a cheque bounce notice.
  • We will assist you in filling out the application form for the cheque bounce notice.
  • JR will ensure a smooth procedure by ensuring proper documentation, evaluation, and testing to obtain cheque bounce notices. 
  • Our consultants will provide you proper guidance during the issuing procedure.
  • To ensure proper testing, we will coordinate with the certification agency.
  • Our cheque bounce notice issue consultants will directly coordinate with the officials to ensure proper follow-ups and acknowledgments to obtain a cheque bounce notice.

In case of any queries, we will provide you with the best possible solution for your concerns regarding cheque bounce registration.

Conclusion :

To conclude, JR Compliance can assist you in obtaining the cheque bounce notice by ensuring proper documentation, evaluation, testing, etc because the procedure of acquiring a cheque bounce notice could be monotonous. Moreover, to make our client understand each aspect of it. JR will educate you regarding the same, including how to get a cheque bounce approval.

Also with this, detain in document submission, or filling in false information in the application form could delay the process.

Thus, to avoid such inaccuracy contact our expert and experienced team immediately for professional assistance and support in the cheque bounce notice.