procedure in case of a cheque bounce by harshita jain @lexcliq


This Notice is a Notice which shall be given by the unpaid Creditor (Payee) to the defaulting Debtor (Drawer) through an Advocate in case of dishonour of Cheque under section 138 of Negotiable Instrument Act.

The Notice here is a sample Legal Notice issued by the Advocate of the Payee specifying a 15 days time given to the Drawer in fault to pay the unpaid Cheque amount. It further specifies that if the amount is not paid within 15 days from the receipt of the Notice, the unpaid Payee has right to file legal complaint and initiate Legal Proceeding against the defaulting Drawer.

Parties to the Cheque:

  1. Drawer :The person who issues the cheque i.e ‘author of the cheque’ is called as Drawee. (Drawer could be the Debtor)
    2. Payee :The person to whom the amount mentioned in cheque is payable i.e the person in whose favour the cheque is drawn is called as Payee. (Payee could be the Creditor)
    3. Drawee : The Bank where the Drawer has an account from which the cheque amount shall be paid i.e the bank who is directed to pay the amount is called as Drawee.
    4. Payee’s Bank : The Bank where the Payee has a bank account in which the cheque amount shall be deposited/credited (especially in case of crossed cheque) or the bank in which payee deposits the cheque is called as ‘Payee’s Banker’


Cheque Bounce Reasons:

The reason for cheque bounce could be many but the one covered under section 138 of Negotiable Instrument Act, against which you can send the Notice given on our website to the defaulting debtor (Drawer) is for ‘Insufficient Balance’ in the Drawer’s account at the time of honor of cheque

Step by Step procedure for prosecution in case of Cheque Bounce:

Following is the procedure for prosecution in case of dishonour of cheque:

  1. Firstly, after dishonour of cheque, a chance shall be given to the drawer in a form of written noticeto immediately repay the cheque amount. You can find this Notice on our website –
    2. Such Notice shall be sent within 30 daysof receipt of ‘Cheque Return Memo’ from the banker of the Payee.
    3. Notice period of 15 days shall be specified in such notice sent to the Drawer.
    4. No offence is presumed to be committed by the Drawer if the Drawer pays off the complete amount within the said notice period of 15 days.
    5. If not, the Payee may choose to file a complaint in the competent court against such defaulting Drawee.
    6. Such complaint shall be made within one month from the expiry of 15 days prescribed in the notice.

Where can a Cheque Bounce case be filed?

As per the latest change made as per 2015 Ordinance and laws for time being in force, the complaint of the dishonour of cheque is made at the place as specified below:
1. In case where the Cheque is deposited by the Payee/Holder for collection of the amount through his bank account – the place where the branch of the bank is situated in which the Payee/Holder holds and maintains the account.
2. In case where the Cheque is deposited by Payee/Holder for collection of the amount otherwise through his bank account – the place where the branch of the Drawee bank is situated where Drawer holds and maintains the account.

Conditions necessary to prosecute the defaulting Drawer:

The Drawer can be sued only in the following conditions:

  1. If the cheque drawn by the Drawer is on the account maintained by or in the name of the Drawer himself.
  2. If the cheque was dishonoured and returned due to ‘Insufficient funds’ in the Drawer’s account.
  3. If the amount mentioned in the cheque is for the discharge of some debt or liability of the Drawer towards the Payee.
  4. If the Drawer fails to make payment of the dishonoured cheque within 15 days from the date of receiving the written notice in this regard.

Only if all the abovementioned conditions exist, the Drawer can be sued or prosecuted for dishonouring of the Cheque.

Dishonour of Cheque is a bailable offence, implies, one can get bail if complaint is made against him for dishonouring the Cheque. But, in case where after getting bail a person fails to appear before the court after receiving summons (a letter requiring a person to be present in the court on the specified date), the court can issue non-bailable warrant against you. In effect of such warrant, the police can arrest you.


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