Sample Notice in case of Cheque Bouncing

Important points

1. Cheque Bouncing is a quasi criminal matter covered under Sec. 138 of

Negotiable Instruments Act.
2. Conviction under this section may incurr prison sentence.
3. However, before a law suit can be filed, the receiver of the cheque must send a
notice to the cheque issuer demanding money. The demand should clearly
mention the details of the transaction that obligated the issuer to issue the
cheque and the request that the money should be paid within 15 days.
4. The notice must be sent within 30 days of receiving information from the bank
that the cheque has been dishonoured.
5. If the payment is not received within 15 days after sending the notice, a law suit
can be filed within the next 30 days.
6. For example:
o Cheque given on 1/1/2010
o Cheque put up in the bank on 5/1/2010 (cheque must be put up within
six months of the date on the cheque).
o Bank dishonours the check on 10/1/2010.
o Notice demanding money sent on 15/1/2010.(Notice must be sent within
30 days i.e. before 9/2/2010).
o Need to wait for payment for 15 days i.e. 30/1/2010
o Law suit may be filed between next 30 days i.e. 1/2/2010 and 2/3/2010.

Notice

DATE: 25/10/2010

To,

Mr. A. B, General Manager,

FGH Pvt. Ltd.,

Indore, MP 452001
Dear Mr. A. B.,

As per the agreement that we entered with your firm on 10/10/2010, we were to
deliver 1000 Kg wheat on or before 20/10/2010 at your warehouse located at 123 MG
Road, Indore and you were to pay us Rs 20,000/- at the time of delivery. A copy of
the agreement is attached.

Persuant to the said agreement, we delivered the goods at your warehouse on

20/10/2010, which were accepted by you (copy of delivery challan is attached) and
you gave us a Cheque for Rs 20000/- (Cheque No. 123456, drawn on ICICI Bank,
Indore Branch).

Unfortunately, your cheque has been dishonoured by the bank with the reason of
insufficient funds. A copy of the receipt provided by the bank is attached.

We thereby request you to pay us the said amount of Rs 20,000/- within 15 days,
failing which we would be forced to take legal action for the recovery of the dues.

thank you,

X. Y. for

M/s MNO Pvt. Ltd.

456 ABC Nagar,

Indore.

Note: Attaching a copy of all the referred documents is not necessary.