What is main objective of section 138 of Negotiable Instruments?
i) An offence under Section 138 of the Negotiable Instruments Act, 1881 is committed no sooner a cheque drawn by accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for insufficiency of funds or for the reason that the amount exceeds the arrangement made with the …
What is the process of 138?
Legal action
According to Section 138 of the Act, the dishonour of cheque is a criminal offence and is punishable by imprisonment up to two years or with monetary penalty or with both. If payee decides to proceed legally, then the drawer should be given a chance of repaying the cheque amount immediately.
How do I draft legal notice for 138 of the NI Act?
Notice Format under Section 138
The cheque no. [___] dated [___] for an amount of [___] drawn on the [___] branch, was issued by you in lieu of discharge of your financial liabilities to us. The said cheque was presented for payment, but the same has been returned by your bank with the endorsement [___].
How do I write a notice of Dishonour of a cheque?
_______ on ____ to your bankers i.e. ______________. That to our clients’ shock and surprise the said cheque had been dishonored by your bankers with the reason “Fund Insufficient” which was intimated to our client by their _______ through their cheque return memo dated _________.
What is the time limit to file a cheque bounce case?
Under Section 138 of the Act, the offence of cheque bounce is a criminal offence for which the payee can initiate a criminal suit. The payee must file the complaint against the cheque bounce before the Magistrate within 30 days of the expiry of 15 days of issuing the cheque bounce notice.
How do you defend a 138 case?
Strategies to Defend the Cheque Bounce Case:
In this defence, the accused has to prove that the cheque was given as a security deposit and not for any discharge of debt or liability; hence, the case would not stand out under Section 138 of the Negotiable Instruments Act.
Can 138 notice be sent after 30 days?
After giving notice you need to file a complaint case against drawer under Section 138 N.I. Act within 30 days from the expiry of notice period i.e. 15 days. In other words you need to file complaint case against drawer within 45 days (15+30) from the date of issue of notice.
How serious is cheque bounce case?
In India, a person issuing a cheque will be committing a criminal offence if the cheque is dishonoured (cheque bounce) for insufficiency of funds. Cheque bounce offence is punishable with imprisonment for a term up to two years or with a fine twice the amount of the cheque or both.
What is the notice period in 138 NI Act?
A 15-day notice period shall be stated in any notice sent to the Drawer. No crime is believed to be committed by Drawer if the Drawer pays the full amount within the 15-day notice span. If not, the Payee can choose to claim against such defaulting Drawee in the competent court.
How do I file a case against a bounced cheque?
Once the cheque has been returned by the bank, then before filing a legal complaint against the drawer, you must, with the help of acheque bounce lawyer,first, send a demand letter/ legal notice to the such drawer within a period of 30 days from the date the cheque has been returned to you by the bank.
What is the limitation period for 138 complaint?
While computing the limitation period of 30 days prescribed under Section 138(b) N.I. Act for issuance of a valid legal notice, the day on which intimation is received by the complainant from the bank that the cheque in question has been returned unpaid has to be excluded.
What is the new rule of cheque bounce?
A cheque bounce is an offence under Section 138 of the Negotiable Instruments Act, 1881 (“Act”) punishable with a fine which can extend to twice the amount of the cheque or imprisonment for a term not more than two years or both.
What is the time limit for cheque bounce case?
What is the limit for cheque bounce case? As per Negotiable Instruments Act, legal notice must be sent within 30 days from the date of cheque bounce. Thereafter within 15+30=45 days from the date of sending the legal notice, case must be filed.
Can FIR be lodged for cheque bounce?
Can I file an FIR for a cheque bounce? Yes, you can file an FIR against the person who has issued a cheque. A person can then file a case against the issuer of the cheque under Section 420 or 406 of the Indian Penal Code (IPC) in a criminal court.
What is punishment for cheque bounce?
Penalty by the bank
In case a cheque is bounced, both the defaulter and the payee are charged by their respective banks. If the bounced cheque is against the repayment of a loan, you would have to additionally incur late payment charges along with the penalty fee charges by the bank.
What is the minimum amount for cheque bounce case?
Although the Reserve Bank of India states that such action can be taken only if cheques, valued Rs 1 crore or above, have bounced more than four times.