Dishonour of Cheque – Cheque Bouncing – Sample Questions
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- Q1. What can I do when a cheque is dishonoured for the reason of insufficient funds. What legal action I can take to get the amount cleared?
- Q2. I have got my cheque dishonoured few months back. It was issued by a Company. What can I do now?
- Q3. Our is the software distribution co. During course of our business we had supplied software worth Rs.3 lacs. But our client dishonoured the cheque. We have filed court case on him after that he paid us Rs. 1 lac and then he has run away. We do not have any idea about his where about. Court has issued proclaimed offender notice, but we do not now how to trace him. He has closed his account and bankers are not cooperating with information like his other address. Pleas advice?
- Q4. I have a cheque dishonoured. I have informed the person in writing, but no response, what should be done to register a case of cheating, and which place it should be filed? The place of the bank, where the cheque was dishonoured or the place where the cheque was handed?
- Q5. I have blank cheques given to me by a partnership firm. Since they owe me some money which I had given to them as a loan. Besides the cheques and the statement of accounts. I do not have anything else. Suppose one day, I suddenly get to know that they have closed the partnership firm and dissolved it, Can I deposit the cheques now and legally raise a claim on them and how?
Q1. What can I do when a cheque is dishonoured for the reason of insufficient funds. What legal action I can take to get the amount cleared?
A. On the dishonour of a cheque, one can file a suit for recovery of the cheque amount along with the cost & interest under order XXXVII of Code of Civil Procedure 1908 ( which is a summary procedure and) can also file a Criminal Complaint u/s 138 of Negotiable Instrument Act for punishment to the signatory of the cheque for haring committed an offence. However, before filing the said complaint a statutory notice is liable to be given to the other party.
Q2. I have got my cheque dishonoured few months back. It was issued by a Company. What can I do now?
A. On the dishonour of cheque by the company you can file a suit for recovery of the amount under Order XXXVII of CPC. As you have stated that cheques were dishonoured few months back and you have issued no notice to the company bringing to their knowledge the dishonour of cheques and the life of the cheque is still valid which is usually six months from the date of issue. You please present the cheque again and on receipt of the information about the dishonour of the cheque you immediately issue notice within 30 days from the receipt of the information of dishonour of cheque to the company. If the company does not pay the amount within 30 days from the receipt of the notice, you can file complaint under Section 138 of the Negotiable Instrument Act. The said complaint is to be filed within one month on the expiry of 30 days period of notice.
Q3. Our is the software distribution co. During course of our business we had supplied software worth Rs.3 lacs. But our client dishonoured the cheque. We have filed court case on him after that he paid us Rs. 1 lac and then he has run away. We do not have any idea about his where about. Court has issued proclaimed offender notice, but we do not now how to trace him. He has closed his account and bankers are not cooperating with information like his other address. Pleas advice?
A. Let the proceedings of declaration of proclaimed Offender be completed. The accused will be declared Proclaimed Offender and can be arrested at any time. At this stage, you can not do anything else. However, simultaneously you can file Suit for Recovery with the last known address of the accused.
Q4. I have a cheque dishonoured. I have informed the person in writing, but no response, what should be done to register a case of cheating, and which place it should be filed? The place of the bank, where the cheque was dishonoured or the place where the cheque was handed?
A. When you have informed the person about the dishonour of the cheque, in case the information is given within 30 days from the dishonour of the cheque, you can file a Complaint under Section 138 of Negotiable Instrument Act within one month after the expiry of notice period of 30 days. The Complaint for cheating is not maintainable legally. However, in certain cases the police have been registering cases of cheating against the accused.
Q5. I have blank cheques given to me by a partnership firm. Since they owe me some money which I had given to them as a loan. Besides the cheques and the statement of accounts. I do not have anything else. Suppose one day, I suddenly get to know that they have closed the partnership firm and dissolved it, Can I deposit the cheques now and legally raise a claim on them and how?
A. You should fill the cheques and present for encashment. The Partnership Firm as well as partners are personally liable and even after dissolution also the firm and partners are liable. Once the cheques are dishonoured you have to file a suit for recovery of the said amount under the summary procedure provided in Order 37 of Code of Civil Procedure, 1908. You should also file a complaint under Section 138 of the Negotiable Instruments Act. For this you will have to first give a notice, within 30 days of the dishonouring of the cheques. Then if payment is not made within 30 days of receipt of notice a complaint has to be filed within 30 days thereafter.
Also See Article Dishonour of Cheque
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Dear Sir,
My mother had given hand loans to her friend’s son both in cash and through bank transfers to his firm’s account. The loans were given in good faith and on assurance that it will be returned whenever asked for and also with interest. However the assurances turned out to be a big lie and the person started avoiding all our calls. With great difficulty, we coaxed him into solving the problem for him and obtained his personal cheques, his wife’s personal cheques and a couple of his company cheques. Also, we got him sign on promissory notes. These are the only documents we have. Again, due to the good relationship my mother shares with the parents of this person, my mother gave him almost an year to pay back the principal amount without any interest. Without his knowledge, for want of additional evidence, my brother recorded on his computer the self acceptance by this person of having received the money from my mother. This is the documentary evidence we have in addition to the promissory notes and the cheques. Now, even after repeated requests this person is dodging the payments and there is no sign of the money being returned. This is causing huge mental agony for us in our family and has forced us to have a strained relationship with my mother who is aged 65 years and has affected both her mental and physical health. I am worried of losing my mother due to this tension. Also, I came to know that he has threatened to declare himself as a PAUPER if we approach the court. This statement by him has dampened our hopes of recovering the money from him. Please help and advise. We are on the verge of committing suicide if there is no legal help available and if we cannot get our money back from this man.
In case of bounce cheque payee shuold be sent to jail if bank memo speaks insuficint funds It is open raud/cheating bank should also black list a/c holders and seal such a/cs till bounce cheque are cleared.
sir,hum ye janana chahe ge ki mujhe ak chque company dwara mila hai.aur bounse hogaya hai.to mujhe kitne day ke andar sambandhit farm ko notice de dena chahiye?(farm ko payment cheque dwra diye hai)
15 days is to be counted for drawer to make payment after receipt of notice instead of 30 days. 30 dayes is wrong.
I have a cheque dishonoured. I have informed the person in writing, but no response, what should be done to register a case of cheating, and which place it should be filed? The place of the bank, where the cheque was dishonoured or the place where the cheque was handed?
A. When you have informed the person about the dishonour of the cheque, in case the information is given within 30 days from the dishonour of the cheque, you can file a Complaint under Section 138 of Negotiable Instrument Act within one month after the expiry of notice period of 30 days. The Complaint for cheating is not maintainable legally. However, in certain cases the police have been registering cases of cheating against the accused.
offence of cheating depends large on the facts and circumstances of the case as narrated by you in your complaint. Otherwise, u/s 138 intention is not there and it is merely a offence considered for commercial transactions. If you narrate certain facts and the police reaches the conclusion that in-fact some kind of cheating had taken place, then the police can register a FIR alsol
sir my father has taken a plot from a builder but after registry of that land we find that the land is not legally clear we hav given 1 lakh for that land.recently builder has given a cheque of Rs 1lakh instead of paper ,and that cheque has bounced .now can i file a suit on him.pls help..
you can file a criminal complaint u/s 138 of Negotiable Instruments Act and also under the Consumer Protection Act.
i received a cheque from my friend and cheque was dishonoured. i have given notice which he does not reply and now, he abscond from the present address and searched everywhere unable to find him. i have the his PP size photo and voter ID xerox of his previous address. kindly advice who to reover amount
you must file a criminal complaint u/s 138 Negotiable Instruments Act at his last known address.
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I RECEIVED A CHEQUE FROM A BUYER MY PROPERTY FOR 12.65 LAC WHICH WAS WRITTEN BY MY FATHER & SIGNED BY ACCUSED DURING THE TIME OF REGISTRATION OF SALES DEED.SAME CHEQUE BOUNCED DUE TO “STOP PAYMENT” CAN WE FILE A SUIT U/S138 AGAINST HIM.CAN HE RAISE OBJECTION IN THAT CASE ON THE GROUND “CHEQUE WAS WRITTEN BY MY FATHER”
so far as the first part is concerned, yes you can file a complaint u/s 138 NI Act. So far as the second part is concerned, it entails a lot of research work and might take some time.
I have a cheque which was bounced one year back. can I take any legal action against the issuer. I have not served any legal notice nor initiated any legal process. Please suggest if I can legal action
As of now you cannot take any action u/s 138 NI Act. But you can file a civil suit.
Is a contract document necessary for deciding a cheque bounce case? I have a contract with a sub-contractor whose cheques have bounced repeatedly. He is trying to mislead the court that there are 2 contracts and this should first be investigated. I understand according to layman terms, that a cheque is a promissory note given in lieu of services rendered. When this instrument is dishonored, it becomes an offense under section 138 of the Negotiable Instruments Act if no steps are taken by the issuer of the cheque to honor the payment due within the stipulated time-frame according to the Act. So, does this mean that regardless of any contract, once a cheque is issued for services rendered, it is the responsibility of the payee to ensure that enough funds are maintained to complete payment of cheque issued?
Please advise me on this point and I would be ever grateful.
As per section 139 NIA, where a cheque is issued, it is presumed that the same has been issued to the holder for discharge of a liability. A contract is to be proved or not, depends on the facts and circumstances of the case.
I hold ICICI Bank credit card and wanted to go for settlement. The collection agent called me and said I need to pay Rs.4550/- immediately to negotiate my settlement amount. I refused to make the payment and said I will do it only after I know my settlement amount. The agent told me as per the bank policy I need to make the said amount immediately as my next statement will be generated in an other 2 days,but,I still refused.The agent repeatedly called me and said that he already told the bank that I am going for settlement and there is no other go if I do not pay he has to pay on my behalf and collect it once he gets me the settlement amount.I told him not to do it and I will never accept it.Few days later I received an email from the bank stating that the cheque issued by me is returned by the banker and arrange for the fresh payment. I called the customercare and informed that I have asked for a settlement and I have not deposited the cheque and it was deposited by their collection agent.They said the complaint has been registered and I will be communicated.When I called the agent he said I need not worry since I am going for the settlement and asked me to wait for 15 days to know the settlement amount.15 days passed and I have not got any response from the agent.I am very much worried and in a state of mental agony. Kindly help me with an answer.
You should not have waited for 15 days. It could be trick by the agent. You must file a consumer complaint immediately and should also move a complaint to the police (if you feel that you have been cheated).