One should follow the following procedure in the event of filing a cheque bounce case: I. Notice of Dishonour When a cheque cannot be paid by a bank, the bank has to inform the payee that the cheque has been dishonoured and that the drawer bank issues you a “Cheque Return Memo” (which states reasons for non-payment) along with the bounced cheque. The payee then as per Section 138 of the Negotiable Instrument Act, 1881 send a Notice of Dishonour or a Demand Notice to the drawer within 30 days from the time the bank returns the cheque to the payee along with the “Cheque Return Memo”, giving him an opportunity, to pay within 15 days of receiving such Demand Notice. This notice needs to be given before any legal action through the judicial system can be taken so that the drawer of the cheque can be informed that he/she shall be liable in case they cannot pay the cheque amount. II. Complaint Once the demand notice has been sent to the drawer but he/she does not provide with a reply within 15 days starting from the date of delivery of the demand notice/ notice of dishonour and does not pay back the due amount, the payee is entitled to file a formal complaint with the competent court. The payee has 30 days after the end of the said 15 day period to file such a complaint. A competent court is a court which has the power to take up the payee's case. A court is competent if, within its jurisdiction, any of the given events have occurred: • The cheque was drawn in a place under its jurisdiction • The place where the bank returned the cheque is under the court's jurisdiction • The place where the cheque was presented falls within the court's jurisdiction • The place where the payee served the demand notice. The complaint should contain the important details of the event otherwise the court may dismiss the complaint. These important details include the date of cheque bounce/ dishonour of cheque, date of presentation of a cheque and the date when the demand notice was issued. In addition to the complaint, the oath letter and photocopies of all related documents like the cheque itself, a copy of the “Cheque Return Memo”, a copy of the demand notice, proof of delivery of demand notice i.e. the cop of registered postal receipt etc. should also be kept at hand. The payee can also initiate a civil action by filing a recovery suit for debt recovery in a civil court under Order XXXVII of the Civil Procedure Code, 1908 in the relevant jurisdiction, apart from prosecuting the drawer for a criminal offence. III. The judicial procedure The court will analyse the case and the court will summon the accused drawer of the cheque which means that the court will ask him/her to appear before it on a particular date. A bailable warrant can be issued by the court, upon the request of the complainant, against the accused if they do not comply with the summons order and fail to appear before the court. But if the accused still absconds and does fail to appear before the court, then the court has the power to issue a non-bailable warrant against them.
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