Procedure for dishonoured cheque
In case of a cheque being dishonoured for want of sufficient funds, what is the procedure for further action and within what period a case is to be filed and if so, in which court?
As per section 142 of the Negotiable Instruments Act, 1881 in case of a cheque being dishonoured a
complaint can be filed either by the payee or the holder of the cheques as the case maybe to the
Metropolitan Magistrate or Judicial Magistrate of first class. A complaint can only be filed in the
following cases when-
- the cheque has been presented to the bank within a period of six months from the date on
which it is drawn or within the period of its validity, whichever is earlier;
- the payee or the holder in due course of the cheque, as the case may be, makes a demand
for the payment of the said amount of money by giving a notice in writing, to the drawer of
the cheque within thirty days of the receipt of information by him from the bank regarding
the return of the cheque as unpaid; and
- the drawer of such cheque fails to make the payment of the said amount of money to the
payee or, as the case may be, to the holder in due course of the cheque, within fifteen days
of the receipt of the said notice.
Such complaint shall be filed within one month from the date when the cause of action arises that is
after the passing of 15 days of giving notice as mentioned above.
Need to send legal demand notice within 15 days from date of retun memo
on failure of payment within stipulated period of 15 days of legal demand notice file a complainant before JMFC within 30 days
As per new amendment complaint to be filed as per jurisdiction of complaiants bank
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