Cheque bounce
I am a trader. One of my customer's gave me cheque but the cheque got bounced twice & he is not paying the dues. Can I sue him for payment of dues? how can i recover my money?
Hello Sir,
. When a cheque is rejected by the bank, it is returned with a memo stating reasons for such rejection. It can be submitted again if the payee thinks there is a probability for acceptance, but in case it is rejected for the second time also, then the payee can proceed legally for recovery of the amount.
2. As mentioned above the Cheque is a negotiable instrument and is governed by Negotiable Instruments Act, 1881, the action and procedure for cheque bounce are also envisaged under the Act. The Act makes it a criminal offense and lays out following procedure to redress it:
3. Once the cheque is bounced/dishonored the payee would receive a ‘cheque return memo’. Within 30 days of receiving the memo the payee has to send a written notice to the payor stating that his cheque has been dishonored and the amount mentioned on the cheque has to be returned to him within 15 days of receipt of the notice, failing which he would proceed with criminal complaint under Section 138 of the Negotiable Instruments Act, 1881.
4. In case the payor fails to make the payment within 15 days of receipt of notice, the payee can proceed legally within 30 days from that date.
5. A formal complaint has to be filed by the payee in the Magistrate’s Court. For Section 138 of the Negotiable Instruments Act, 1881.
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