A cheque issued to me in Bhavnagar bounced for insufficient funds; how do I recover it?
KA Asked by Karthik Subramaniam from India
Quick Answer
You must issue a statutory demand notice within 30 days of the bank's return memo, calling upon the drawer to pay within 15 days, failing which you can file a complaint under Section 138 of the Negotiable Instruments Act before the Magistrate in Bhavnagar within 30 days of the notice period.
Detailed Legal Analysis
You must issue a statutory demand notice within 30 days of the bank's return memo, calling upon the drawer to pay within 15 days, failing which you can file a complaint under Section 138 of the Negotiable Instruments Act before the Magistrate in Bhavnagar within 30 days of the notice period. The complaint must annex the cheque, return memo, demand notice, and postal proof.
The offence is punishable up to two years and double the cheque amount as fine, and Gujarat High Court has held that the drawer's liability is strict. Gujarat Rent Control Act 1999 does not apply, as the NI Act is central, but the local Magistrate's procedure governs filing.
The drawer's presence is secured through summons and warrants. Compromise and Lok Adalat settlement are encouraged.
Limitation is strict and cannot be condoned in 138 matters.
Disclaimer: AI-generated for educational purposes only. Does not constitute legal advice. Consult a qualified practitioner.