Anonymous
Asked August 17, 2016

Cheque bounced

  • 1 Answer
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Dear Sir/Madam, X is a Pvt. Ltd. company and manufacture the medicines and supply to the Dealer cum Stockist Y, Y is supplying through their agents and stockists to the customers. Y is not giving money in full, is pending a sum of Rs. 25 lakhs, X asks his due from Y, But Y issue a two cheques for sum of Rs.5 lakhs not mentioned the date and after two days he send email to the X, this two cheques given on your pressure and not mentioned the date, after confirmation of date will be intimation. Not replied the said email by X, and submit the bank and bounced the same and X filed the cheque bounce case, and also he has filed the suit for recovery of money remaining out standing balanced amount of Rs.20 lakhs from X, is stand in court? ... Rs. 5 lakhs for cheque bounce case, Rs.20 lakhs for recovery of money)... kindly describe.

Answer 1

Dear Sir/Ma’am,

 

Bouncing of cheque is a criminal offence in India. However, there are certain procedure which needs to be followed before bringing legal actions against the defaulter. The main statute guiding this purpose is S. 138 of the Negotiable Instruments Act, 1881. There are essentially 3 criteria which needs to be fulfilled in order to file a suit.

 

  • 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.
  •  

  • 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.
  •  

  • And the drawer needs to pay you back the sum in fifteen days. If not, then you can file a case against him/her.
  •  

    If X had sent a written notice to Y and still Y did not take cognizance of the intimation, then X’s cheque bounce suit will stand. 

     

    With respect to the next transaction, that is, recovery of the remaining 20 lakhs, it is contingent on the nature of the contract. If there is a date prescribed before which the payment has to be made, failing the date, they are liable to be sued. However if there is no date prescribed as to the payment of money, then a reasonable time limit may be allowed and that is to be decided by the Court on the concept of equity. Therefore, the terms of the contract needs to be considered in this aspect.

     

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