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Cheque returned from bank without payment. Which cases to file? How to recover money?

If the check is returned because the money is not in the bank, we can take the following steps to get the money back.

 1. File a case under Section 138 Negotiable Instruments Act

2. File Summary Suit under Order 37 CPC

Both these cases can be filed together or separately. The time limit and other procedures for the same are described below.

 

1. Procedure for filing Section 138 Negotiable Instruments Act case.

Time Limit

- Notice to be sent within 30 days of receipt of returned cheque with cheque return memo

- Time to be given for payment money - 15 days

- Filing of case - 30 days after expiry of 15 days period for payment given in the notice

If the cheque is returned due to non-cash from the bank, the returned cheque and cheque return memo should be collected from the bank immediately. A notice must be given to the signatory of the check within 30 days of the return of the cheque and within 15 days of the receipt of the notice the amount of the cheque must be demanded. If 30 days have passed after the return of the cheque, the cheque can be resubmitted to the bank within the specified period. Remember that the validity of the cheque is three months only.

If the drawee sends a legal notice for payment of the amount of the bounced check and the drawer does not pay the amount of the check within 15 days of receiving the notice, a complaint can be filed in court under Section 138 of the Negotiable Instruments Act, 1881 within 30 days. It is preferable to send the notice through a lawyer.

What are the documents required to file a complaint under Section 138 of Negotiable Instruments Act 1881

- Name of Parties Information
- 138 Negotiable Instruments Act, 1881 Complaint
- Evidence/affidavit before summons (in some courts)
- List of Witnesses
- List of documents
- Vakalatnama in favor of advocate

 

What are the other documents which help in filing a case under Section 138 of Negotiable Instruments Act 1881

Other documents required to file a criminal complaint under Section 138 of the Negotiable Instruments Act are as follows.

- Copy of the resolution authorizing Complainant's Attorney (in case of Company, firm etc).
- Original dishonored cheque
- Cheque Returning memo dated _____
- Copy of legal notice dated _______
- Postal Receipt No. ______ dated ______
- UPC Dated _____
- Limitation Document

If the above documents are available then a case can be filed in a court under Section 138 Negotiable Instruments Act through a lawyer. The case is filed to punish the accused, but he can be punished with a jail term of up to two years or a fine of up to twice the amount of the check.

 

 

 

2. File Summary Suit under XXXVII of CPC

Time limit to file Summary Suit under order 37 CPC - 3 years

Filing of case under Order 37 CPC is only for recovery of money. As this case is a summary suit, it is disposed of quickly. It can be filed only after paying the court fee which is payable in normal civil cases. A case which cannot be filed under Section 138 can also be filed under this as it has a time limit of three years. Apart from the amount of the cheque, interest for late repayment can also be claimed in this case.

Even if there is a case under Section 138 of Negotiable Instruments Act against non-cashing of check, there is no bar to file a case under Order XXXVII Civil Procedure Code.

 

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