Cheque Bounce u/s 138Sine Qua Non For Offence & Legal Notice Under Section 138

April 5, 20160
The sine qua non for preparing & serving a legal notice under Section 138 of N.I.Act, 1881 needs to be understood and implemented carefully .
 The ingredients to attract  Section 138 of the Negotiable Instruments Act, 1881 in a legal notice can be analysed as below :
  a. The cheque drawn towards the discharge of existing debt or liability.
The legal notice should explain as to how a transaction perspired with specific requirement to pay accordingly .
It is pertinent to note that any cheque issued against any settlement will not fall under the purview of Section 138 of the act – Lalit Kumar Sharma & Anr vs State of Uttar Pradesh & Anr dated 06.05.08 -MANU/SC/2079/2008
b. Cheque must be presented within 3 months or within validity period whichever is earlier.
 The cheque should have been presented in the respective bank within 3 months or within validity period whichever is earlier .
c.  Dishonouring of Cheque  or returned unpaid due to insufficient funds
 The advise from the bank for dishonour of the instrument is significant and its detail  should be incorporated in the legal notice .
d. Serving of Legal Notice to the within 30 days.
 A legal notice should be effectively communicated or served to the drawer of the cheque within 30days from the date of receipt of cheque with advise of dishonour from the bank .
It can be communicated through Registered post, under Postal Certificate (U.P.C ) or Speed Post .Further, a  legal notice can also be sent through post, courier, fax, e-mails etc.
e. Failure of drawer of cheque to pay within 15 days of the receipt of a notice.
 In Haryana State Small Industries Vs Laxmi Agro  Industries-  2007(1) Civil Court Cases 274 (P&H) (DB),  the Punjab and Haryana High Court held that  the offence of dishonour of cheque is committed when the Drawer fails to make payment to the payee within 15 days of receipt of the notice for demand of payment due.
It further held that the cause of action arises at the time of receipt of notice by Drawer and it completes when Drawer fails to make payment within 15 days of receipt of a legal notice. The court also observed that the offence is deemed to have been committed only from the date of the expiry of notice period.
f.Complaint is made within one month of the date on which the cause of action arises.

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