Cheque Stop Payment Letter

To, The Branch Manager [bank_name], [branch_name] Date: [request_date] Subject: Stop payment instruction — Cheque No. [cheque_number] Sir/Madam, 1. I, [account_holder], hold account number [account_number] with your branch. 2. I request you to STOP PAYMENT on the following cheque: Cheque number : [cheque_number] Cheque date : [cheque_date] Amount : Rs. [cheque_amount] Payee : [payee_name] 3. REASON FOR THIS INSTRUCTION [reason_for_stop] 4. Kindly confirm in writing that the stop payment instruction has been recorded, and inform me of any charge applicable. 5. I undertake to indemnify the Bank against any claim arising from acting on this instruction, and I confirm that the Bank shall not be liable for having acted upon it in good faith. 6. I request that this instruction remain in force until withdrawn by me in writing. Yours faithfully, [account_holder] Account No.: [account_number] Contact: [contact_number] ACKNOWLEDGMENT Received on ______________ Reference: ______________ Signature and seal: ______________________ ──────────────────────────────────────────────────────────────── READ THIS BEFORE YOU STOP A CHEQUE Stopping payment does NOT make the underlying liability go away, and it does NOT protect you from prosecution. This is the single commonest and most expensive misunderstanding about cheques in India. People assume that a cheque returned "payment stopped by drawer" is a civil matter between the parties. It is not. Where the cheque was issued in discharge of a LEGALLY ENFORCEABLE DEBT or liability, an instruction to stop payment can still attract liability under SECTION 138 of the Negotiable Instruments Act, 1881, exactly as if the cheque had bounced for insufficient funds. The Supreme Court has held that a drawer cannot escape Section 138 simply by countermanding payment. Section 139 additionally raises a presumption that the cheque was issued for a debt or liability, and it is for the drawer to rebut it. Section 138 carries imprisonment of up to two years, or a fine of up to twice the cheque amount, or both. WHEN STOPPING PAYMENT IS PROPER: - the cheque, or the cheque book, has been lost or stolen - the cheque was obtained from you by fraud, coercion or misrepresentation - the goods or services it paid for were never delivered, or the contract has been lawfully cancelled - the amount or payee has been altered without your authority - it was a security cheque and the underlying obligation has been discharged In each of those the point is that there is NO legally enforceable debt behind the cheque — which is the actual defence, not the stop instruction itself. WHAT TO DO ALONGSIDE: 1. Write to the PAYEE in the same breath, stating why payment has been stopped. Silence looks like evasion and will be used that way. 2. Keep every document supporting your reason. If a Section 138 complaint follows, that evidence is the defence. 3. Where the cheque was lost or stolen, lodge a police complaint and give the bank the complaint number. 4. Take advice before stopping a cheque given for a debt you do genuinely owe. Renegotiating is almost always cheaper than defending a criminal complaint.