Cheque Bounce Notice u/s 138 (Drafting)
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Cheque Bounce Notice u/s 138 (Drafting) Form
What is a Cheque Bounce Notice?
A cheque bounce notice is a notice issued under Section 138 of the Negotiable Instruments Act when a cheque bounces due to insufficient funds in the drawers’ account for making the payment of the cheque amount. If the cheque bounces for any other reason other than insufficient funds, the cheque bounce notice cannot be issued, and the payee can demand resubmission of the cheque.
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Frequently Asked Questions (FAQs)
• Provide the cheque to the bank within three months of its issue or within the period of its validity. (The validity of cheques were considered to be six months previously; however, Reserve Bank of India vide Notification No. RBI/2011-12/251DBOD.AML BC.No.47/14.01.001/2011-12 directed that the validity period of cheques to be reduced from six months to three months with effect from 1st April, 2012.).
• The payee [Person who receive the money] should have made a demand to the Payor [Person who is liable to pay the money] for payment by registered notice after the cheque is returned unpaid.
• The Payor should have failed to pay the amount within 30 days of the receipt of the notice.
• Only on satisfying all the above three conditions, the prosecution can be launched for the offence under Section 138.