How to Draft cheque bounce under Section 138 of NIA?

Cheque Bounce under NIA is explained in a simple manner in this video.

Procedure to Draft Cheque Bounce under Section 138 of Negotiable Instruments Act, 1881

Cheque bounce cases have become increasingly common in recent years, leading to significant legal implications for both individuals and businesses. To effectively handle such situations, it is crucial to understand the procedure involved in drafting a cheque bounce case under Section 138 of the Negotiable Instruments Act, 1881. This article aims to provide a comprehensive guide on the steps involved in initiating and pursuing legal action for cheque bounce. This article will also provide a sample draft for the same.

Introduction to Cheque Bounce Cases

Cheque bounce refers to a situation where a cheque presented for payment is dishonored by the bank due to insufficient funds, account closure, or any other reason mentioned under Section 138 of the Negotiable Instruments Act, 1881. It is a criminal offense that can lead to legal consequences for the issuer of the cheque.

Understanding Section 138 of the Negotiable Instruments Act, 1881

Section 138 of the Negotiable Instruments Act, 1881, lays down the legal framework for dealing with cheque bounce cases. According to this section, if a cheque is dishonored, the payee has the right to initiate legal action by sending a legal notice to the issuer of the cheque, demanding payment within 30 days.

Preparing the Legal Notice

The first step in drafting a cheque bounce case is to prepare a legal notice. The legal notice should include details such as the name and address of the payee, the date and amount of the dishonored cheque, the reasons for dishonor, and a demand for payment within 30 days. The notice should be sent through registered post with acknowledgment due or through a reliable courier service.

Filing the Complaint

If the issuer fails to make the payment within 30 days of receiving the legal notice, the next step is to file a complaint before the appropriate court. The complaint should contain essential information such as the details of the dishonored cheque, the reasons for dishonor, the date of receipt of the legal notice, and the relief sought. The complaint should be filed within one month from the expiry of the notice period.

Judicial Proceedings

Once the complaint is filed, the court will issue summons to the accused. The accused will then have to appear before the court and present their defense. The complainant and the accused will have an opportunity to produce evidence, documents, and witnesses to support their respective claims.

Evidence and Documentation

To strengthen your case, it is crucial to gather and present relevant evidence and documentation. This may include the original dishonored cheque, the legal notice, the postal or courier receipts, bank statements, and any other supporting documents that prove the debt owed.

Cross-Examination and Trial

During the trial, both the complainant and the accused will have the chance to cross-examine each other’s witnesses. The court will evaluate the evidence presented and decide the matter based on its merits. It is important to ensure that the legal provisions are strictly followed throughout the trial process.

Judgment and Its Implications

After examining the evidence and hearing the arguments, the court will pronounce its judgment. If the court finds the accused guilty, it may impose penalties, including imprisonment and a fine, as specified under Section 138 of the Negotiable Instruments Act, 1881. The court may also order the accused to pay compensation to the complainant.

Appeal Process

If any of the parties involved in the case are dissatisfied with the judgment, they have the right to appeal in a higher court within the stipulated time frame. The appeal should be based on valid grounds and supported by appropriate legal arguments.

Execution of the Order

Once the judgment becomes final and no further appeals are filed, the complainant can initiate the execution process. This involves recovering the amount awarded by the court through appropriate legal means, such as attachment of the accused’s property or bank accounts.

Sample Draft

IN THE COURT OF SESSIONS JUDGE, RANCHI

COMPLAINT NO ___________ OF____

IN THE MATTER OF:

MR. SUMIT KUMAR                                                      COMPLAINANT

VERSUS

MR. VIMAL ATTRI                                                       ACCUSED

POLICE STATION: RANCHI SADAR THANA

COMPLAINT UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 (AS AMENDED UPTO DATE) FOR THE SUM OF RS. 80,000 (RUPEES EIGHTY THOUSAD ONLY)

MOST RESPECTFULLY SHOWETH:

1. That the Complainant is studying and is residing at Ranchi
2. That the present complaint is being field by the complainant Mr. Vimal Attri to cause appearance in this Hon’ble Court and to depose and conduct the proceedings.
3. That on the accused namely Mr. Vimal Attri had deposited my money as hostel security fees of Rs. 80,000.
4. That on 12.01.2020 complainant paid Rs. 80,000 (Rupees Eighty Thousand only) as security repayable on demand.
5. That towards payment of amount of loan the accused issued Cheque No. BBIN10304XXXX Dated 11.03.2020 for Rs. Eighty Thousand only to the complainant. That in order to discharge their above said liability and in accordance with the agreed terms and conditions, the accused had issued Cheque No. BBIN10304XXXX Dated 11.03.2020 for Rs. 80,000/- drawn on 11.03.2020. The said cheque was issued from Account No. 586118919XXXX which is held in the name of the accused. That the present complaint is based on the dishonor of the above said cheque which was issued in discharge of a lawful debt.
6. That at the time of handing over the above said cheque the accused had assured the complainant that the said cheque will be honored on presentation. Taking the above assurance/representation as true, the complainant had accepted the above said cheque.
   That on the basis of the assurances given by the accused, the complainant presented the above said cheque with its bankers namely Mr. Dinesh Patil and was dishonored vide cheque return advice dated 11.03.2020 issued by the complainants bank. The aforesaid cheque was returned unpaid vide returning memo dated 11.03.2020 with the remarks “FUNDS INSUFFICIENT”.
7. That the dishonor of the cheque clearly shows and establishes that the accused did not intend to honor the amount under the said cheque.
8. That on account of the dishonor of the said cheque, the complainant had served a legal notice dated 15.03.2020 upon the Accused by way of Registered Post vide Receipt No. 4255946XX dated 15.03.2020 However, despite service of notice, the accused has not taken any steps to liquidate his liability and has failed to make balance payments to the complainant towards the amount covered under the said cheque, within the statutory period of 15 days or thereafter. Thus, the Accused has, therefore committed an offence within the meaning of Section 138 and other sections of the amended provisions of the Negotiable Instruments Act, 1881, for which he is liable to be prosecuted and punished.
   
   That the accused have failed to make payment against the said cheque which has been done by them malafidely, intentionally and deliberately and knowingly. That at the time of issuing the said cheques the accused were fully aware that the said cheques will not be honored on presentation. Therefore, the accused has dishonestly induced the complainant to advance a sum of 80,000 /- (Rupees Eighty Thousand Only) fully knowing that he cannot repay the said amount to the complainant.
9. That the accused is guilty offence under Section 138, Negotiable Instruments Act and is also liable to be prosecuted under Section 420 of the Indian Penal Code.
10. That in view of the facts and circumstances, the complainant has a cause of action and right to file the present complaint. The cause of actions has arisen in favour of the complainant when, on the expiry of the notice period, the Accused has not come forward to pay the amount relating to the dishonored cheques. The cause of action is still subsisting and continuing in nature.
11. That the cause of action has arisen at Ranchi Sessions court as the cheques was issued at Ranchi, and the same was payable at Ranchi and was also dishonored at Ranchi. Therefore, this Hon’ble Court has jurisdiction to try and adjudicate upon the present complaint.
12. That the complaint is well within limitation period prescribed under the Act:
    i. Date of Dishonor 11.03.2020
    ii. Date of Notice 15.03.2020
    iii. Date of filing Complaint 30.03.2020
13. That a list of documents and list of witnesses are annexed with this complaint.

PRAYER

It is, therefore, most respectfully prayed that this Hon’ble Court may be pleased to:

1. Summon, prosecute and punish the Accused and also direct the accused to pay the amount as double to the amount covered under the said dishonored cheques, under the provisions of Section 138 read with Section 142 of the Negotiable Instruments Act,1881 as amended by the Negotiable Instrument laws (Amended and Miscellaneous Provisions) Act, 2002. In accordance with Section 357 of Code of Criminal Procedure 1974, out of the penalty imposed, the Accused be ordered to compensate the Complainant to the extent of Rs. 95,000 /- (Rupees Ninety five thousand rupees  Only) and
2. Such other and further orders may be passed as may be deemed fit and proper by this Hon’ble Court.

It is prayed accordingly.
 

PLACE: Ranchi
 

DATED:   30.03.2020                                                       

COMPLAINANT

JEET SINHA

THROUGH :

ADVOCATES

RK JHA & SIDHARTH SHETTY

Conclusion

Dealing with cheque bounce cases requires a thorough understanding of the legal procedures and the necessary documentation. By following the steps outlined in this article, you can effectively navigate through the process of drafting and pursuing a cheque bounce case under Section 138 of the Negotiable Instruments Act, 1881.

FAQs

• Is cheque bounce a criminal offense?

Yes, cheque bounce is considered a criminal offense under Section 138 of the Negotiable Instruments Act, 1881.

• What should be included in the legal notice for a cheque bounce case?

The legal notice should include details such as the name and address of the payee, the date and amount of the dishonored cheque, the reasons for dishonor, and a demand for payment within 30 days.

• Can a complainant file a cheque bounce case without sending a legal notice?

No, as per the legal requirements, a complainant must first send a legal notice to the issuer of the dishonored cheque before filing a complaint.

• What are the penalties for a cheque bounce offense?

The penalties for a cheque bounce offense may include imprisonment and a fine, as specified under Section 138 of the Negotiable Instruments Act, 1881.

• Can the judgment in a cheque bounce case be appealed?

Yes, both the complainant and the accused have the right to appeal the judgment in a higher court within the stipulated time frame if they are dissatisfied with the decision.