Banking Law

In: Business and Management

Submitted By sachidanand
Words 436
Pages 2
Sample Notice in case of Cheque Bouncing

Important points

1. Cheque Bouncing is a quasi criminal matter covered under Sec. 138 of Negotiable Instruments Act. 2. Conviction under this section may incurr prison sentence. 3. However, before a law suit can be filed, the receiver of the cheque must send a notice to the cheque issuer demanding money. The demand should clearly mention the details of the transaction that obligated the issuer to issue the cheque and the request that the money should be paid within 15 days. 4. The notice must be sent within 30 days of receiving information from the bank that the cheque has been dishonoured. 5. If the payment is not received within 15 days after sending the notice, a law suit can be filed within the next 30 days. 6. For example: * Cheque given on 1/1/2010 * Cheque put up in the bank on 5/1/2010 (cheque must be put up within six months of the date on the cheque). * Bank dishonours the check on 10/1/2010. * Notice demanding money sent on 15/1/2010.(Notice must be sent within 30 days i.e. before 9/2/2010). * Need to wait for payment for 15 days i.e. 30/1/2010 * Law suit may be filed between next 30 days i.e. 1/2/2010 and 2/3/2010.

Notice

DATE: 25/10/2010
To,
Mr. A. B, General Manager,
FGH Pvt. Ltd.,
Indore, MP 452001
Dear Mr. A. B.,
As per the agreement that we entered with your firm on 10/10/2010, we were to deliver 1000 Kg wheat on or before 20/10/2010 at your warehouse located at 123 MG Road, Indore and you were to pay us Rs 20,000/- at the time of delivery. A copy of the agreement is attached.
Persuant to the said agreement, we delivered the goods at your warehouse on 20/10/2010, which were accepted by you (copy of delivery challan is attached) and you gave us a Cheque for Rs 20000/- (Cheque No. 123456, drawn on ICICI Bank, Indore Branch).…...

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