Notice after a cheque has bounced

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Sending a notice after a cheque has bounced.

Punishing the Issuer of the Cheque

Send a demand notice

If a cheque that you’ve received as payment has bounced, you must first send a notice to the issuer of the cheque to pay the amount that was due, along with the cheque return memo, i.e., the document given by the bank stating the reason why the cheque was returned unpaid, that you have received from the bank. This is known as demand notice. This demand notice must be sent within 30 days of the cheque bouncing.

Drawer has to pay

The drawer will have 15 days from the date of receiving the notice to pay you the money.

Filing a Case

Drawer replies and pays the money

In such a situation, then there is no need to file a case, as you have received the money.

Drawer replies but does not pay the money

Where the drawer replies but does not pay the money, then upon the completion 15 day period, you have 30 days to file a criminal complaint in court.

Drawer does not reply, does not pay the money

Where the drawer does not reply and does not pay the money, then upon the completion 15 day period, you have 30 days to file a criminal complaint in court.

Recovering the Money

Once your cheque has bounced, you have 3 years to file a civil case to recover the money that is due to you. Please contact a legal professional to know more about the civil procedure.

Timelines for a cheque bounce case:

Stage	Requirement	Timeline
Presenting the Cheque	The cheque must be deposited within its validity period	Generally 3 months from cheque date
Return of Cheque	The bank returns the dishonoured cheque	Immediate (starting point for legal notice)
Legal Notice by Payee	The person receiving the cheque must send a legal notice	Within 30 days from receiving the return memo
Drawer Gets A Chance to Pay	The person who issued the cheque gets time to make the payment	Within 15 days from receiving the legal notice
Filing a complaint in Court	If payment is not made within 15 days from receiving the legal notice, checque bounce complaint can be filed in court	Within 30 days after the 15-day period ends
Punishment	The court may impose imprisonment or fine	Up to 2 years imprisonment and/or fine up to twice the cheque amount
Settling the case	The parties can mutually settle the case	Can be done at any stage under Section 147 of the NI Act

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