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Introduction
The act of serving legal notices is one area of the complex legal proceedings that frequently requires careful attention, especially when it comes to cases involving cheque bounce. Financial transactions are common in Ahmedabad, a thriving city that is teeming with trade and commerce. But in the fast-paced world of business, dishonoured checks are not unusual, so it's important to know what legal options are open to those who have been wronged.
A dishonoured check can start a domino effect with financial ramifications that can seriously upset businesses and individuals alike. Given the seriousness of these circumstances, the legal system offers channels for obtaining redress by means of legal notifications being served. This important first step not only expresses purpose but also starts the formal process of seeking resolution through legal channels.
Being a major economic centre, Ahmedabad follows the laws of India, particularly the Negotiable Instruments Act, 1881, which regulates cheque-related matters. But figuring out the complexities of legal processes can be difficult, particularly for people who are not familiar with the legal system.
This essay attempts to provide a clear picture of the entire procedure of serving legal notice for cheque bounce instances in Ahmedabad, acting as a beacon of guidance amidst the complexity. Every stage in the process of seeking redress is carefully explained, from comprehending the legal requirements governing such matters to the practical considerations of drafting and serving a legal notice.
What Do You Mean By Cheque Bounce Or Dishonoured Cheque?
A cheque bounce can happen for a number of reasons, including an insufficient balance, a ripped cheque, overwriting on the cheque, and when the cheque's validity has expired. The Negotiable Instruments Act, 1881, addresses the penalties associated with such cheque bounces and provides protection against them.
If the amount exceeds the arrangement with a bank, dishonour of a cheque resulting from inadequate funds in the drawer's bank account gives rise to criminal culpability against the drawer of the defaulted cheque. In the event of a cheque bounce, mens rea is not necessary and the drawer cannot use it as a defence. Liability resulting from Section 138 might potentially lead to a criminal offence of cheating under provisions of IPC and would be punishable.
Parties to the Cheque in Ahmedabad
- Drawer: The individual who writes the cheque, or the "author of the cheque," is referred to as the Drawee. (The debtor may be the drawer.)
- Payee: The individual in whose favour the cheque is drawn, or the person to whom the amount specified in the cheque is payable, is referred to as the Payee. (The creditor may be the payee.)
- Drawee: The bank that the Drawer has an account with and from which the amount on the cheque is to be paid; in other words, the bank that receives the payment instruction is the Drawee.
- Payee's Bank: The bank that the payee deposits the cheque into or has a bank account in where the cheque amount is to be deposited or credited (particularly in the case of a crossed cheque) is referred to as "Payee's Banker."
What is a Cheque Bounce Notice?
A "cheque bounce notice" is just a notification to the issuer that the recipient of the cheque will file a lawsuit if the amount is not paid immediately.
In the contemporary economic world, a cheque is seen as a necessary component of any transaction. A situation known as "cheque bounce" occurs when money is not paid because there is not enough balance in the account. In order to retrieve the sum, swift action is required. First, the drawer receives a notice requesting payment; if they don't, legal action will be taken. On the letter, a quick resolution is occasionally reached.
Contents of Cheque Bounce Notice
- It must be in reference to Section 138 of the Negotiable Instruments Act;
- Information regarding the cheque presentation.
- Information regarding the request made to the cheque issuer to make payment on immediate basis.
- Reason for non-realization of payment.
- A notice must be presented within 30 days of return of cheque to the cheque issuer.
Legal Provision for Cheque Bounce Cases in Ahmedabad
A legal notice for a bounced cheque is normally sent in accordance with Section 138 of the Negotiable Instruments Act of 1881. According to this clause, if a cheque is dishonoured because there are not enough funds or for any other reason, the holder of the cheque, or payee, must notify the drawer, or issuer, in writing within 30 days of learning about the dishonour from the bank. The notice must state that the payee may file a lawsuit against the drawer if the cheque amount is not paid within 15 days of receipt.
Particulars such as the date of issue and dishonour of the cheque, the amount involved, and the payee's plan to file a lawsuit if the cheque amount is not paid within the allotted time should all be included in the notification. In order to provide proof of delivery, the notice should also be issued via courier or registered mail with acknowledgment. The drawer may be subject to criminal culpability, including jail time or a fine, as specified by the Act, if they disregard the notification.
Penalty
In case, within 15 days from the date of the notice, the drawer of the cheque / Non-Banking Financial Company (NBFC) fails to clear the outstanding amount, such NBFC will be punishable under the terms of the NI Act, Section 138. From the verification, the drawee may get support in commenting on a wrongful person resorting in cheque forgery.
The procedures for the punishment of the bounced cheque in Ahmedabad are-
(i) Prison terms of less than a year (1 year) will be considered.
(ii) This fine, which may be double the value of the cheque as well, is the joint responsibility of the issuer and cashier.
Procedure for Sending a Cheque Bounce Notice in Ahmedabad
Step 1- Legal Advice: You are advised to have an outlook with a lawyer who has been dealing with such cases in Ahmedabad. They can guide you through the process, ensuring you follow the layout of laws in Ahmedabad. Your notice must be compliant with it.
Step 2- Legal Notice Drafting: The attorney can draft the notice on instruction to you. The information notice should be included in this notice that contains a date and an amount of the returned check, the reason for the return dishonour, and that payment must be made within a designated time period for the city of Ahmedabad (usually 15 to 30 days).
Step 3- Stamp Paper: India's legal documents which are written on the appropriate stamp paper are formal notices of the required value. This is the sort of cost where the advocate of Ahmedabad will be discussing with you the value of the stamp the notification paper will be depending on.
Step 4- Sending the Notice: To achieve a positive result, it is suggested that the mail should be delivered with registered post and acknowledgement to allow proper verification that the receiver has received the notice. In the event that you need to prove your effort in following up the investigation please make sure that you have a copy of the notice and the mail receipt.
Step 5- Waiting Period: Waiting period is time taken by the recipient to reply to the legal notice for the predetermined amount of time, which is often 15 to 30 days, after sending it. You have the option to file a lawsuit in court if they don't comply or if they fight the demand for payment.
Step 6- Making a Complaint: The applicant has the right to register a complaint with the relevant court if the recipient ignores the legal notification or declines to pay. Depending on the amount of the returned cheque, either the Ahmedabad District Court or the Ahmedabad High Court would handle this in Ahmedabad.
Step 7- Court Procedures: Following the filing of the complaint, the defaulter will receive a summons from the court in Ahmedabad, and the matter will then continue in accordance with the law.
