Cheque bounce: recovery of payment
Hello I have a trading company in new delhi Janakpuri.I have sale some led tube light to (Shiva Enterprise, Ashok Vihar) another company. The owner of the Shiva Enterprise issue a/c payee cheque on 28.06.16 Amount 26009.00. But cheque dis-honurer(bounce) 3 times. Now after immense followup i dont get my payment.please advise what should i do.
Under provisions of negotiable instruments act.sec.138 a legal notice on behalf of complainant is issued to the defaulter whose cheque is dishonored. It should be issued within 15 days of dishonor of cheque by RPAD. All facts including the nature of transaction, amount of loan and or any other legally enforceable debt against which the said cheque was issued and the date of deposit in bank and date of dishonor of cheque should be mentioned in the notice.
b) The person who has issued cheque is directed to make the payment of amount of dishonored cheque within 15 days. In case the said payment is made within 15 days of service of notice then the matter ends.
c) But in case the said payment is not made within 15 days then the complainant has to file a criminal case in the court within 30 days from the expiry of notice period of 15 days.
d) The court will hear arguments of complainant/ advocate for complainant and issue process under section 138 of N.I. Act.
Thanks & Regards,
Advocate Sandip Bhosale (LL.M)
Dear Sir/Madam, as per your query, you have cheque and it bounced 3 times, you don't worry, usually cheque presentation validity is 3 months from the date of cheque. Your cheque dated:28-06-2016, this cheuqe validity up to 28-09-2016, you already bounced the cheques in 3 times, you should issued a legal notice after last bounced cheque within 15 days from the date of last cheque bounced. If more than 15 days, you once again submit before the bank and get bounced cheque endorsement from the Bank and issued a legal notice with in 15 days, after completion 15 days, and next with in 30 days you have to fie private complaint u/s 138 & 142 of Negotial Instrument Act, readwith section 200 Crpc. and the Hon'ble court will take your affidavit and take cognizance and issued a court notice/summons to the said Shiva Enterprises and etc.,... if you want more advice in this regard, I will advice under paid service... my email id : firstname.lastname@example.org ... by Chandrashekhar Vithal Jadhav, Advocate & Legal Consultant, Bangalore.
There are two remedies which you can seek for your distress. One under criminal law, one under civil law or both.
A. Under Criminal Law
Your situation is covered by the Negotiable Instruments Act, 1881. Sec 138 of the said Act, deals with such situations where cheques are defaulted or bounced. There are essentially 3 criteria which need to be fulfilled in order to file a suit.
1. The cheque needs to be presented in the bank within six months from the date when it is drawn or within the period of it’s validity, which ever is earlier.
2. When a cheque bounces, the payee’s bank (your bank) gives a memo and the dishonoured cheque back to you. You need to send a formal written notice with all the relevant details to the drawer (the author of the cheque, I.e. the owner of the other company in here) in writing within thirty days of receiving the memo.
3. And the drawer needs to pay you back the sum in fifteen days. If not, then you can file a case against him/her.
According to the law, if once a cheque is dishonoured, the payee can submit the cheque for a second time within three months. Since you have submitted the cheque three times, your thirty days w.r.t to the 2nd point will start from the day when you received the memo from the bank and the dishonoured cheque for the third time and not before that. So I assume that the limitation period is not over.
Now, you need to send him/her a written complaint with all the relevant details within thirty days from the dishonouring of the cheque for the third time. If he/she does not pay you the sum within fifteen days of receiving this notice, you have the right to file a suit in the court of the Judicial Magistrate or Metropolitan Magistrate under whose jurisdiction your bank falls. He may be punished with maximum two years of imprisonment or fine with twice the amount of the cheque or with both.
You can also take the help of S.417 and S.420 of the Indian Penal Code, 1860 to substantiate your case. These sections deal with cheating and their punishments.
B. Under Civil Law:
The objective of the Civil Law is mainly compensatory in nature. Under order 37 of the Code of Civil Procedure (1908), you can file a summary suit. The advantage of this over any ordinary suit is that, here defendant is not allowed to defend himself without the permission of the judge. And you will get the compensation for your loss.
 S. 138(1), Negotiable Instruments Act, 1881.
 S. 138(2), Negotiable Instruments Act, 1881.
 S. 138(3), Negotiable Instruments Act, 1881.
 S. 142, Negotiable Instruments Act, 1881.
In this case as a cheque is issued and now the validitiy of cheque is 3 months from the date on cheque so you can present the cheque any number of times within this 3 times, hence now in cheque bounce case when the cheque is dishonored the bank issues a memo stating the reasons for dishonour so from the date you receive the memo from bank you have to issue a notice within 1 month demanding the payment of cheque amount within 15 days from the date of receipt by him, and even after giving him 15 days he fails to make payment you have to file complaint under section 138 of negotiabe instruments act within 1 month thereafter, further in cheque bounce case you have to file the complaint where you have presented the cheque for collection or you can say payye bank, further in this case the court can order double the amount of cheque as compensation along with imprisonment. if one month has expired from last dioshonor of cheque then present the cheque once more and issue notice and follow the above procedure you will recover the amount.
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