Cheque Bounce Legal Notice (Section 138)

LEGAL NOTICE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 BY REGISTERED POST WITH ACKNOWLEDGMENT DUE / SPEED POST Date: [notice_date] To, [recipient_name] [recipient_address] Sir/Madam, Under instructions from and on behalf of my client [sender_name], residing at [sender_address] (hereinafter "my Client"), I serve upon you the following notice: 1. THE LIABILITY 1.1 You are legally liable to my Client in respect of the following: [underlying_liability] 1.2 The said liability is a legally enforceable debt within the meaning of Section 138 of the Negotiable Instruments Act, 1881. 2. THE CHEQUE 2.1 In discharge of the said liability, you issued to my Client Cheque No. [cheque_number] dated [cheque_date] for Rs. [cheque_amount] (Rupees [amount_in_words] only), drawn on [bank_name]. 2.2 You issued the said cheque with full knowledge of your liability and with the representation that it would be honoured on presentation. 3. DISHONOUR 3.1 My Client presented the said cheque for encashment on [deposit_date] within the period of its validity. 3.2 The said cheque was returned unpaid by the bank vide its return memo dated [dishonour_date], with the reason recorded as "[dishonour_reason]". 3.3 The dishonour of the cheque establishes that you have committed an offence punishable under Section 138 of the Negotiable Instruments Act, 1881. 4. DEMAND 4.1 You are hereby called upon to pay to my Client the sum of Rs. [cheque_amount] (Rupees [amount_in_words] only), being the amount of the dishonoured cheque, WITHIN FIFTEEN (15) DAYS of receipt of this notice. 4.2 Payment shall be made by demand draft or direct bank transfer in favour of my Client, and not by cheque. 5. CONSEQUENCES OF NON-PAYMENT 5.1 TAKE NOTICE that if you fail to make payment of the said amount within fifteen days of receipt of this notice, my Client shall be constrained to initiate criminal proceedings against you under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881 before the competent Magistrate. 5.2 The offence under Section 138 is punishable with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both. 5.3 My Client further reserves the right to initiate civil proceedings for recovery of the said amount together with interest, costs and damages, and such other proceedings as may be available in law. 5.4 All costs of and incidental to such proceedings shall be to your account. 6. WITHOUT PREJUDICE This notice is issued without prejudice to any other rights and remedies available to my Client in law or in equity, all of which are expressly reserved. A copy of this notice is retained in my office for record and further necessary action. Yours faithfully, [advocate_name] Advocate For and on behalf of [sender_name] IMPORTANT — STATUTORY TIME LIMITS UNDER SECTION 138 The timelines below are strict, and a case is commonly lost by missing one of them rather than on the merits. 1. The cheque must be presented to the bank within its period of validity (ordinarily three months from the date of the cheque). 2. This demand notice must be issued WITHIN THIRTY (30) DAYS of receiving the bank's return memo. A notice issued after that window does not found a complaint under Section 138. 3. The drawer then has FIFTEEN (15) DAYS from receipt of the notice to pay. No complaint can be filed before that period expires. 4. If payment is not made, the complaint must be filed WITHIN ONE MONTH of the expiry of that fifteen-day period, before a Magistrate having jurisdiction under Section 142(2). 5. Retain the original cheque, the bank's return memo, the postal receipt, and the acknowledgment due card. Proof of dispatch and service of this notice is essential to the complaint.