How to write Cheque Bounce a Legal Notice?
Cheque bounce cases are now a common problem for many individuals and companies. When the bank dishonors a cheque because of insufficient funds, a closed account or other reasons, this is known as a "cheque bounce." In such cases and as an offended party (payee), you have the right to issue a written legal notice, starting off by sending cheques contents back up north to whoever bounced them.
This article walks you through the process of writing a legal notice for cheque bounce, and indicates steps in going about a cheque bounce case with assistance from cheque bounce lawyers.
What is a Legal Notice for Cheque Bounce?
A cheque bounce legal notice is a formal statement sent by the person to whom the cheque was issued which bounced. This notice warns that the amount on the dishonored cheque has to be paid within 15 days or else legal proceedings will commence, usually in case of this kind situation in a court.
The legal provision for bounced cheque cases are regulated under Section 138 of the Negotiable Instruments Act, 1881. The purpose of this law is to ensure that the person who issued the cheque is responsible for its failure to be honored and the costs suffered by those who present it.
Why is a Legal Notice Important in Cheque Bounce Cases?
A legal notice is the most important first step in the case of a cheque bounce. It fulfills two purposes:
- To Inform the Issuer: It informs the issuer of the dishonored cheque in no uncertain terms.
- To Establish Legal Ground: Sending a legal notice keeps on record the communication between parties. When the case is eventually brought to court this is very important, because it can be used as evidence.
Steps to Write a Legal Notice for Cheque Bounce
If you're having trouble with a bounce for your cheque, here is a step-by-step guide on legal notice about it:
Address and Date
At the top of the legal notice, start by listing the date. Underneath the date, write contact details for person who is receiving (the cheque issuer) as well as his address. Be very careful to make sure that these details are accurate as it will be an official document of record.
Topic of the Notice
This topic must be clear and to the point. Use something like "Legal Notice for Dishonour of Cheque" or "Notice for Cheque Bounce" as a heading.
Introduction and Details of the Cheque Bounce
The first paragraph should say that you are sending this legal notice in connection with the cheque bounce. Information about the specific cheque in question should be given including such things as:
- The number of the cheques
- The date when the cheque was drawn
- The amounts of the cheques
- At which bank were the cheques cashed
- The date when the cheques were presented for payment and dishonored
- The reason why the cheques bounced (such as insufficient funds on account, account closed etc.)
Demand for Payment
In this section, you should demand payment of the cheque amount and any interest and penalties which may apply. Make it clear that you are giving a deadline for payment--ordinarily 15 days from receipt of the notice. Say that if payment is not made within that period, you will have no alternative but to take legal proceedings under section 138 of the Negotiable Instruments Act.
Warnings About Possible Legal Actions
Make sure to tell the payee in no uncertain terms that if payment is not arranged, a false statement in a check bounce notice shall result.
Can also be mentioned that on top of the amount contained in the check you will be responsible for any additional legal expenses incurred during this period.
Closure
Consequently, a tidy, but firm, closing statement such as: "This notice is your last chance to settle matters amicably, peaceably or courteously." is appropriate.
Signature
Finally, the notice needs to be signed by you -remember to state your name and contact address.
Example of Legal Notice for Dishonor of Cheque
Dated: [Insert Date] To, [Name of the Drawer] [Address of the Drawer] Subject: Notice of Dishonor of Cheque Dear [Name], This is a formal notice that the cheque number [Cheque Number] dated [Date], which you drew in my favor for the amount of [Cheque Amount], has been dishonored by [Bank Name] for [reason for dishonor]. According to s. 138 of the Negotiable Instruments Act, you are liable to pay back the dishonored sum within 15 days of this notice being received. Should you not comply, the Law gives me no alternative except to take legal action against you. This is a formal notice, so importantly please deal with the matter as soon as possible. It is useful to seek legal guidance from a cheque-bounce lawyer so that you can understand how best to follow the correct legal procedures. I trust you will deal with the situation by the time specified to avoid any further complications. Yours truly, [Your Name] [Your Address] [Your Contact Details]
Conclusion
Writing a legal notice for cheque bounce is the first step toward resolving a dispute related to a dishonored cheque. If they do not reply within prescribed time or in order to seek payment, you may need the help of cheque bounce lawyers to file a cheque bounce case, in order that your rights may be protected.
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