Negotiable Instruments Act
Negotiable Instruments Act
The Negotiable Instruments Act governs transactions involving negotiable instruments such as cheques, promissory notes, and bills of exchange. At Bhuwan Jayant & Associates, we provide legal guidance and representation in disputes arising under this Act.
Cheque Bounce Cases
Representation in cases filed under Section 138 for dishonoured cheques and recovery of amounts owed.
Promissory Notes
Handling disputes arising from promissory notes, including enforcement and repayment matters.
Bills of Exchange
Assistance in issues related to acceptance, payment, or dishonour of bills of exchange under the Act.
Legal Notices
Drafting and sending notices for dishonoured cheques and other negotiable instrument disputes to initiate legal proceedings.
Recovery & Civil Suits
Filing civil suits for the recovery of amounts due and enforcing rights under the Negotiable Instruments Act.
Out-of-Court Settlements
Negotiating settlements to resolve disputes amicably and avoid lengthy litigation whenever possible.
Key Aspects of Cheque Bounce Cases:
Issuance of Statutory Notice: Once a cheque is dishonoured, a legal notice must be sent to the drawer within 30 days of receiving the bank memo.
Time-bound Legal Process: If the drawer fails to make payment within 15 days of receiving the notice, a criminal complaint under Section 138 of the Negotiable Instruments Act can be filed within the stipulated time frame.
Dual Remedies: The complainant may pursue both criminal prosecution (to ensure penalty and punishment) and civil recovery proceedings (to recover the cheque amount with interest).
Penalty & Punishment: The offence may result in imprisonment of up to 2 years, fine up to twice the cheque amount, or both.
Our Expertise Includes:
- Drafting and sending statutory legal notices.
- Filing and defending Section 138 complaints.
- Representation before Magistrate Courts and Appellate Courts.
- Initiating civil suits for recovery of money.
- Strategic guidance to ensure speedy settlement or trial.
What are the Documents You Need for Negotiable Instruments Act?
To effectively pursue or defend cases under the Negotiable Instruments Act, the following documents are usually required:
- Original Cheque (dishonoured).
- Bank Return Memo indicating reason for dishonour.
- Copy of Legal Demand Notice sent to the drawer.
- Proof of Dispatch of Notice (postal receipt, courier slip, email copy, etc.).
- Reply to Notice (if any).
- Transaction Documents (invoices, agreements, promissory notes, loan papers, etc.).
- Identity Proofs of complainant and accused.
- Bank Statements showing the transaction or cheque issuance.
- Authority Documents (if complainant is a company – board resolution, power of attorney, etc.).
- Previous Court Orders (if part of ongoing proceedings).
Procedure of the Negotiable Instruments Act
The Negotiable Instruments Act, particularly under Section 138, lays down a clear legal procedure for dealing with cheque dishonour cases. At Bhuwan Jayant & Associates, we guide clients through each stage efficiently to ensure timely justice and compliance.
1. Dishonour of Cheque
When a cheque is presented to the bank and returned unpaid due to insufficient funds or other reasons, it constitutes a dishonour under Section 138 of the Act.
2. Demand Notice
The payee must send a written legal notice to the drawer within 30 days of receiving the return memo from the bank, demanding payment of the cheque amount.
3. Waiting Period
The drawer has 15 days from the date of receiving the notice to make the payment. Failure to do so allows the payee to initiate legal proceedings.
4. Filing of Complaint
If payment is not made, a complaint under Section 138 can be filed in the Magistrate’s court within 30 days from the expiry of the 15-day notice period.
5. Court Proceedings
The Magistrate examines the complaint, issues summons to the accused, and the trial proceeds. Both parties present evidence to support their case.
6. Judgment & Punishment
If found guilty, the drawer may face imprisonment up to two years, a fine up to twice the cheque amount, or both, as per Section 138 of the Act.
7. Appeal & Settlement
The convicted party can appeal the judgment. The Act also encourages settlements at any stage to resolve disputes amicably.
Frequently Asked Questions
A. Section 138 deals with the dishonour of cheques due to insufficient funds or similar reasons, giving the payee a legal right to take action against the drawer.
A. The payee must issue a legal notice within 30 days from the date of receiving the bank’s return memo for the dishonoured cheque.
A. Yes, the case can be settled amicably between the parties at any stage of the proceedings. Courts often encourage such settlements.
A. The offender can face imprisonment up to 2 years, or a fine up to twice the cheque amount, or both, depending on the case.
A. The complaint can be filed in the court where the payee’s bank (where the cheque was presented for collection) is located.
