FORMAT
[Date: //2024]
To,
[Name of the Party/Parties]
[Address]
[Contact Info]
Subject: Legal Notice under Section 138 of the Negotiable Instruments Act for Dishonour of Cheque
Dear Sir/Madam,
Under instructions from my client, M/s. [Client’s Company Name], we hereby serve you the following legal notice:
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Client’s Details: My client is a Private Limited Company engaged in trading computers, laptops, computer parts, and accessories, known as [Client’s Company Name], with its office located at [Client’s Address].
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Purchase Order: In the year [Year], you approached my client through an email from your employee, [Employee’s Name], to purchase [Product/Service] for your office. Subsequently, you issued a purchase order dated [Date] amounting to Rs. [Amount] for [Product/Service].
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Payment Terms: You promised to pay the cost of the product by a current-dated cheque as specified in the purchase order.
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Delivery of Goods: My client, relying on your promise, delivered [Product/Service] to your office at [Delivery Address] as per Invoice No. [Invoice Number] dated [Invoice Date].
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Cheque Details: You issued Cheque No. [Cheque Number] dated [Cheque Date] for Rs. [Cheque Amount] (Rupees [Amount in Words] only), drawn on [Bank Name] towards payment against the invoice.
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Cheque Dishonour: The aforementioned cheque was presented by my client on [Presentation Date] to your bankers, [Bank Name]. To our client’s shock, the cheque was dishonoured with the reason “Funds Insufficient,” as communicated by the bank through a cheque return memo dated [Memo Date].
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Failure to Pay: Despite several telephonic reminders from my client, you have failed to make the payment.
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Intention to Deceive: It appears that you had dishonest intentions when purchasing [Product/Service] from my client, resulting in a deception amounting to Rs. [Amount].
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Legal Implications: The issuance of the aforementioned cheque with the intention to defraud constitutes an offence under Section 138 of the Negotiable Instruments Act.
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Demand for Payment: We demand that you pay Rs. [Total Amount] within 15 (fifteen) days from the receipt of this notice. Failure to do so will compel our client to initiate legal proceedings against you, for which you will be liable for all associated costs and consequences.
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Reservation of Rights: This notice is issued without prejudice to any other legal rights and remedies available to our client.
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Legal Notice Expenses: You are liable to reimburse Rs. [Cost Amount] for the expenses incurred in sending this legal notice.
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Copy of Notice: A copy of this legal notice will be retained in our office for future reference if needed.
Yours faithfully,
[Signature]
[Advocate’s Name]
Contents of Cheque Bounce Notice
The contents of the Cheque Bounce Notice are-
The name and address of the drawer of the cheque.
The name and address of the payee.
Information of the cheque presented to the bank for payment.
Details of the cheque number, date and amount.
Date of return of cheque.
Reason for cheque bounce.
Request for the immediate arrangement of the payment of the amount.
Reference of Section 138 of the Negotiable Instruments Act.
Legal Action for Cheque Bounce
If a cheque bounces due to insufficient funds, the following steps can be taken:
- Send a Notice: The payee should send a written notice to the drawer requesting payment within a specified time.
- Legal Action: If the drawer doesn’t pay, the payee can file a case in court.
Conditions for Legal Action:
- The cheque was presented within three months of issue.
- The bank rejected the cheque due to insufficient funds.
- A written notice was sent to the drawer within 30 days of the bank’s rejection.
- The drawer didn’t pay within 15 days of receiving the notice.
Filing a Suit:
- The suit can be filed within 30 days after the 15-day payment period ends.
- The case can be filed in the city court where the cheque was presented.
- The case will be filed under Section 138 of the Negotiable Instruments Act.
Section 138 Of The Negotiable Instruments Act
Section 138 of the Negotiable Instruments Act makes it an offence for a person to draw a cheque on an account with insufficient funds. This offence can result in imprisonment or a fine.
Key conditions:
- The cheque must be drawn for a legally enforceable debt or liability.
- The cheque must be returned by the bank due to insufficient funds.
Punishment:
The drawer can be punished with:
- Imprisonment: Up to two years
- Fine: Up to twice the amount of the cheque
- Or both
Cheque Bounce by Companies under Section 144
Section 144 of the Negotiable Instruments Act deals with cheque bounce by companies.
Key points:
- If a company issues a bounced cheque, all those responsible for the company’s business at the time are guilty of an offence.
- The company itself is also guilty of the offence.
- If the company’s directors, secretaries, managers, or other officers were involved in or negligent about the offence, they are also liable.
“Disclaimer: This legal form is intended for informational purposes only and does not constitute legal advice. It is essential to consult with an attorney to ensure that it is suitable for your specific circumstances. The use of this form does not establish an attorney-client relationship. Neither [Your Name/Organization] nor the government shall be liable for any damages or losses arising from the use or reliance on this form.”
